Cost cuts fuel Trinity Mirror profits increase

Trinity’s national division saw operating profit rise 12 per cent to £41.6m in the first six months of 2012 – despite revenue falling 1 per cent to £216.9m.

Trinity said the profit increase was the result of the ‘continued focus on driving efficiencies and reducing the underlying cost base of the business”, while the fall in revenue was blamed on the economic climate and the launch of The Sun Sunday in February.

Figures released in the company’s half-year report this morning showed advertising revenues on its nationals divisions (which now also includes its regional titles in Scotland) fell 8 per cent to £63.4m, but circulation was up 0.3 per cent to £121.9m.

Digital revenue rose 12.5 per cent following the relaunch of, with audience reach across its websites in June standing at 16m unique users and 74m page views.

Elsewehere, operating profit on Trinity Mirror‘s regional titles, which include the Manchester Evening News and Liverpool Echo, rose 13 per cent in the first six months of 2012 – again despite an 8 per cent slump in revenue.

Regional operating profit had risen from £15m in the first half of 2011 to £16.9m in 2012. Over the same period revenues fell from £151.2m to £139.1m, with advertising down 12 per cent and circulation revenue dropping by 4 per cent.

‘Our Regionals division has seen challenging trading conditions in our key large northern metropolitan markets which are feeling the brunt of the tough economic conditions and in addition the public sector spending cuts and continuing media fragmentation,’said Trinity.

Overall group revenue was down 4 per cent to £356m but operating profit was up 12 per cent to £45.2m. Profit before tax rose 21.5 per cent to £35.1m.

The integration of its Scottish operations into a new subsidiary called Media Scotland, and the creation of s seven-day publishing operation at the Daily and Sunday Mirror – which saw the departure of former editors Richard Wallace and Tina Weaver – has seen the company increase the target for structural cost savings for the year from £15m to £20m.

‘Our ongoing focus on driving efficiencies and reducing the structural cost base of the business ensured that operating costs fell by £20m,’said Trinity in this morning’s report.

‘The fall in costs is after investment in digital and is not distorted by any material change in input prices in the period.”

On an adjusted basis group operating profit stood at £52.5 million, an increase of 11.5 per cent despite revenues falling by 4 per cent to £356m.

Net debt was reduced by £40.3 million to £180.9m.

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