Trinity Mirror has confirmed it will make £7m in cost savings by the end of the year, and has said it remains “cautious” as advertising revenues slide.
The publisher said declines in motors and property advertising had led to revenue in the first four months of 2008 falling by 2.7 per cent compared with the same period last year. This excludes the impact of any acquisitions and disposals.
The news comes a day after Trinity Mirror shares hit an all-time low of 260.75p – down more than 50 per cent in the past 12 months.
In a trading update this morning, the group posted a 4.3 per cent year-on-year drop in advertising income across its 150 papers, which include the Mirror titles, The People, the Daily Record, and a stable of regional newspapers.
Advertising revenues in the regionals division fell 4.9 per cent, while the decline in the nationals division was 2.9 per cent. In Scotland, ad revenues dropped by 5.2 per cent.
Key areas of regional newspaper advertising such as motors and property were among the worst-hit areas. Spending on car advertising fell 16.3 per cent in the first four months of the year, compared with the same period in 2007. Property advertising in the same period fell 6.8 per cent, and recruitment was down 1.7 per cent.
“The outlook for the UK economy remains uncertain with the wider implications of the credit crunch,” the company said today.
“This has resulted in the advertising environment remaining difficult and volatile. Given this uncertain economic outlook for the UK we remain cautious about trading prospects.”
Circulation revenue in the first 17 weeks of 2008 fell 1.2 per cent year on year, and the publisher said it expected “month on month volatility” to continue for the remainder of the year.
Overall digital revenue was up 44.1 per cent year on year, with a 38.6 per cent rise in the regionals and a 95.3 per cent increase at the nationals.
“We continue to make steady progress throughout the period with the development of our strategy to build a growing multi-platform media business,” the company said.
Trinity Mirror said it would continue looking to make efficiencies that would “create a more robust business”. Last month, the publisher announced it was to close eight of its newspapers in the Midlands, in a move which it is understood will lead to 23 redundancies, including six journalists’ jobs.
Trinity Mirror‘s share price hit an all-time low of 260.75p at the close of trading yesterday afternoon. But despite the uncertain outlook, shares rallied this morning and were up 2.5 per cent to 267.25p by midday.
This price gives the publisher a stock market valuation of £701m – less than half its £1.5bn value 12 months ago.