Trinity Mirror has issued a profit warning to the City after posting a 12 per cent year-on-year decline in advertising revenue in the past three months.
In a trading update this morning, the newspaper publisher warned that its full-year profits were likely to be 10 per cent lower than previously expected and that deteriorating advertising conditions looked set to continue for the rest for the year.
Warning of a “very uncertain economic outlook”, Trinity Mirror said management were continuing to closely monitor costs and would “seek opportunities for further efficiencies”.
Advertising revenues in the first half of 2008 were down six per cent year on year at the group’s regional titles, which include the Liverpool Echo and Newcastle Chronicle.
The nationals division, home of the Mirror titles, The People and the Daily Record, saw ad revenues in the same period fall 6.5 per cent.
The decline has been more sharp since the beginning of April, with overall group-wide advertising revenues down 12 per cent year on year. Property and motors advertising were the worst-hit sectors.
“Advertising market conditions have deteriorated, reflecting the uncertain outlook for the UK economy with the ongoing adverse implications of inflationary cost pressures and the wider implications of the credit crunch,” the company said today.
“We have seen a marked decline in advertising revenues across our businesses during May and June and this is expected to continue for the remainder of the year.”
Trinity Mirror said today it would cancel its share buyback programme in a bid to save money. The company was due to buy £175m of its shares back from the stock exchange, and has so far bought £108m.
The group did, however, point to growing digital revenues – up 40.1 per cent year on year. The biggest growth was in the nationals division, with digital revenue almost doubling since last year, up 98.7 per cent. The rate of growth in the regionals division was 34.4 per cent.
Although Trinity Mirror is looking to make more efficiencies, the publisher said this would not be at the expense of its digital business.
“We will continue to invest in digital and the ongoing capital investment to implement our new operating model across the group,” it said.
The company is due to announce its half-year results on 31 July.