Trinity Mirror's adjusted operating profit fell by £2.4m in the first half of 2015, despite the group delivering cost savings of £7m.
The company's adjusted underlying revenue fell by £27.6m – 8.7 per cent – in the half year to £288.5m and its adjusted operating profit was £47.9m, down from £50.3m.
Trinity Mirror, like other publishers, described the print revenue environment as "challenging" in the first half of 2015. It said that in the print national advertising market there has been a “slowdown in retail spend, in particular supermarket, but also reduced spend in telecoms, motors and entertainment categories”.
The publishing division's operating profit was £49.5m – down 7.8 per cent from £53.7m. This was on revenue of £254.6m, down 8.8 per cent on an underlying basis.
Digital revenue growth, from £14.9m to £18.9m, failed to offset print decline, from £266.7m to £235.7m, in the publishing division.
In print, advertising revenue fell by 19 per cent to £87.7m.
Trinity Mirror said that costs in the publishing division fell by £22.8m, or 10 per cent, to £205.1m. This fall in costs, the company said, came after a £3m investment in "digital resources and product development".
Since November last year, Trinity Mirror has closed 18 newspapers, and opened one. It also merged two newspaper local websites in the North East last month. Asked by Press Gazette in May whether more closures could follow, chief executive Simon Fox said: "There are no immediate plans to close any further titles. But that doesn’t mean we never will.”
In addition, the publisher has axed a number of jobs across the regional and national press this year. In June, Trinity Mirror targeted 25 regional newspaper jobs in the Midlands and 20 in Scotland. And in May, 27 jobs were cut across the national stable, with three websites closed.
Across the group, Trinity Mirror said it had made cost savings of £7m. It announced in June that it would be targeting structural cost savings of £20m this year, up from the £10m target announced in March.
Included in its "key areas of strategic focus" – announced in the report – was: "Continuing our relentless focus on efficiency and cost management." In addition, Trinity Mirror said it would continue "protecting and revitalising our core brands in print", "growing our existing brands onto digital delivery channels" and "launching, developing, investing in or acquiring new businesses built around distinctive content or audience".
The half-year results showed that the company received £12m from its 20 per cent per cent share of regional publisher Local World, and £4.3m from its 21.5 per cent per cent share in national news agency Press Association.
The group’s statutory operating profit fell by £40.4m to £19.6m. Trinity Mirror said this reflected PA’s sale of MeteoGroup and the net increase of £12m – from £4m to £16m – in the cost of dealing with phone-hacking claims. The publisher said that excluding these items, profit before tax increased by £1.1m.
Commenting on the results, chief executive Simon Fox said: "The print advertising environment has been more challenging than anticipated in the first half. As a result, whilst continuing to invest in people and technology to drive the ongoing growth in digital audience and revenue, we have taken further action to address our print cost base. The strong cash generative nature of the business has enabled us to continue to strengthen our balance sheet, to the extent that the Group had a net cash position for the first time in its history at the end of the half year. At the same time we continue to make the agreed pension contributions whilst paying an interim dividend of 2 pence per share.
“I remain confident that our strategy will deliver sustainable growth in revenue and profit over the medium term despite the difficult print advertising market conditions. The actions we are taking in support of both our print and digital products provide the Board with confidence that profits for 2015 will be in line with expectations."