Profits up for Post & Mail publisher but revenues continue decline
NEWSPAPER group Trinity Mirror – published of the Birmingham Post and Mail – has announced an increase on adjusted full year profits despite a fall in revenues as it continues to try and strike a balance between its printed and digital operations.
The group is pinning much of its hopes for the future on its digital arm, which again showed growth last year, although its traditional newspapers continued to show declines – with the print market described as ‘more challenging than expected’.
Trinity said circulation of its flagship publication, the Daily Mirror, had fallen below industry averages and its commercial department was finding its increasing more difficult to attract national advertising to its regional titles.
Much of the group’s profit was bolstered by continued cost-savings, while for the year ahead the group has high hopes for the Local World operation, which it acquired in its entirety last October in a deal worth almost £155m.
The Local World portfolio, acquired from Daily Mail and General Trust, includes a string of well known daily and weekly titles.
“Strong cost control including structural cost savings of £20m and the acquisition of Local World resulted in adjusted operating profit up 3.9% (£109.6m), adjusted profit before tax up 5.1% (£107.5m) and adjusted earnings per share up 3.4% (33.9p),” it said in its results for the full year to December 27, 2015.
Group revenue fell by 6.9% to £592.7m (2014: £636.3m). Underlying revenue declined by 7.8% with publishing digital revenue growing by 21.9% and publishing print revenue declining by 9.5%.
“Increased volatility and challenges in print advertising markets were driven by a slowdown in retail spend, in particular from supermarkets, but we also saw reduced spend in the telecoms, motors and entertainment categories. Strong digital audience growth drove increased publishing digital revenues,” it added.
Highlights within its regional operation included the launch of Britain’s biggest free weekly newspaper, the Manchester Weekly News, in April with a distribution of 265,000 across Greater Manchester and The Visiter, a new free newspaper covering the entire Sefton region.
The Liverpool Echo was re-launched in June and the Birmingham Mail was re-launched in October with other regional brands to follow. The new design is intended to reflect the “changing media consumption habits of our readers” with news downplayed in favour of an improved focus on areas such as football.
Local World revenue and adjusted operating profit for the full year 2015 were £208.2m and £41.4m respectively, with the revenue and adjusted operating profit post acquisition being £21.2m and £2.7m respectively.
“Our strategy remains on track and the Group is making good progress with the integration of Local World. The group continues to focus on digital investment and growth whilst protecting print revenue and supporting profits through the tight management of the cost base. We have targeted structural cost savings of £15m, including synergy savings, in 2016,” it added.
To support digital growth, the group said readership on Mobile continued to be an increasingly important component of digital revenue growth and it was enhancing its products and advertising formats to take advantage of the ongoing opportunity in this area. The Mirror’s new app, launched earlier in the year, has been rolled out to other core sites.
It is also publishing onto Apple News, Facebook Instant Articles and will be ready for Google’s new Accelerated Mobile Pages format.
The importance of the Local World operation is indicated by the fact revenue in the first two months of ownership increased by 24%. However, on a like for like basis, assuming Local World was owned from the beginning of 2015, revenue fell by 9%.
Nevertheless, the group added: “Whilst print markets, in particular advertising revenue trends, are expected to remain challenging, the delivery of our strategy provides the board with confidence in the group’s performance for 2016.”
