Sales and profits drop at Trinity Mirror

NEWSPAPER group Trinity Mirror saw its pre-tax profit drop by 66% in the six months to July 3 to £23.8m.

The company’s profit figure was worse largely due to a comparative gain of over £23m recorded during the first half of last year following its acquisition of GMG Regional Media. However, operating profits were also down by 24% to £47.1m and sales were 3% lower at £371m.

The company, which owns the national Mirror newspaper title as well as regionals such as the Liverpool Daily Post, Manchester Evening News and the Birmingham Post, said that it had sought to improve its cost base by increasing targets for its structural annual cost savings by £10m to £25m.

It said that trading conditions had been difficult, blaming the ongoing public sector spending cuts, tax increases and weak retail sales on its lower sales, while costs – particularly newsprint prices – had risen “substantially”.

The acquired GMG Regional Media business – largely the Manchester Evening News and its weekly subsidiaries – added a total of £64m to its sales. Some £700,000 of this came from GMG’s digital sales, which helped to increase the group’s total digital sales by £800,000 to £18.3m.

Its newspaper division had a somewhat mixed performance, with circulation of its national titles increasing by 5% . This was partly due to a “significant improvement” in the performance of its national Sunday titles following a marketing campaign in the wake of the News of the World’s closure last month.

However, circulation of its regional titles dropped by 3%, while advertising revenues fell by 9% at its regional titles and 15% at the nationals.

Chief executive Sly Bailey said: “While the economic environment remains difficult we have undertaken a series of actions to limit the impact on operating profit.

“The rollout of our technology led operating model continues to deliver efficiencies and today we have announced an increase in our 2011 cost savings target to £25 million.

“Our focus on maximising profits in the short term through tight management of costs while investing for growth creates a good backdrop for shareholder value creation over time.”