Trinity Mirror has announced plans to cut a further £20m in costs after a “serious downturn in advertising” led to a 16 per cent profit slump.
The Daily Mirror and Daily Record publisher said today that like-for-like operating profits in the first six months of 2008 fell to £80.5m – down from £95.6m in the same period last year.
The company issued a profit warning to investors last month, saying full-year profits looked set to be 10 per cent lower than previously expected as deteriorating advertising conditions continued into the second half of the year.
Group revenues at the regional and national newspaper group – excluding any acquisitions or disposals – fell 1.5 per cent from £467.7m to £460.8m.
Trinity Mirror said it was on track to save £20m in costs by the end of the year – and has set a target to save the same amount in 2009.
The Trinity Mirror chief executive, Sly Bailey, said: “The numerous actions we took during the period to reduce our costs and improve our efficiency, product portfolio and balance sheet have served to partially offset the impact of the serious downturn in advertising expenditure being experienced by consumer-facing media businesses.
“We have implemented a further efficiency programme which will deliver at least an additional £20m of savings in 2009 by accelerating technological improvements to processes across editorial, advertising and pre-press.
“We believe that these initiatives alongside good portfolio management and our continued investment to build our digital revenues will see the group through this economic downturn and best position the business for growth when market conditions improve.”
Digital revenues grew by 40.2 per cent to £22.3m. The publisher said it was looking to double its digital audience to 24 million unique users by 2010 and achieve annual digital revenues of £100m by 2011.
Trinity Mirror‘s regional division, which publishes titles including the Liverpool Post, Birmingham Mail and Teesside Gazette, saw print revenues decline by 7.3 per cent to £196.9m. Regional digital revenues increased by a third to £19.5m
The profit margin in the regionals fell from 25.6 per cent to 21 per cent, with total regional operating profit down 21.7 per cent to £45.5m.
Revenues rose at the English national titles – the Mirror and the People – but fell at the Record titles in Scotland. Overall, national revenues were up 1.5 per cent to £244.4m, but profits fell 6.2 per cent to £42.7m.
National digital revenues doubled, up 100.6 per cent to £2.8m.