Regional press cost cuts help boost profits at Trinity Mirror

Bailey said the fake Iraq pictures affair was partly responsible for the Daily Mirror’s slide in circulation

Regional titles have helped boost profits at the UK’s biggest newspaper publisher, Trinity Mirror.

A cost-cutting regime announced a year ago appears to be paying off for the company and the profit margin in its regionals division has increased from 23.5 per cent to 27.7 per cent.

In the six months to the end of June, regional newspapers made £75m for the company, compared with £60.3m for the same period last year.

The regionals were Trinity Mirror’s biggest source of profits, followed by the national titles, which include the Daily Mirror, Sunday Mirror and The People, on £41.1m (up 7.6 per cent) and the Racing Post sports division on £8.6m (up 21.1 per cent).

Editorial cost-cutting at Trinity Mirror regionals over the past year has included the loss of 16 jobs at the Birmingham Post & Mail and 21 at the Western Mail & Echo in Cardiff.

Circulation was down across all the company’s local paper sectors, with daily mornings down 3.7 per cent, evenings down 5.6 per cent and weeklies down 1.8 per cent. But price rises have boosted circulation revenue for Trinity’s 240 regional titles.

After the sudden departure of regionals division managing director Stephen Parker, chief executive Sly Bailey said she would be in direct control of that part of the company for “the foreseeable future”.

Bailey partly blamed the Daily Mirror fake Iraq pictures affair for the paper’s poor circulation performance.

Over the six months to June, the Mirror’s circulation dropped 5.3 per cent year-on-year. But Bailey said the tabloid’s market share only went down from 20.3 per cent to 20.1 per cent after the torture pictures crisis.

“We lost readers as a direct result of the Iraqi prisoner pictures being exposed as fakes,” she said. “Management action was decisive and immediate.

In the last six weeks, Richard Wallace [the new Daily Mirror editor] has already made a difference. The Daily Mirror is a broader, more consistent and balanced newspaper that reflects its readers’ values.

“The Daily Mirror receives disproportionate media attention, which is often ill-informed and ill-intentioned.

The management team was clear about the action that needed to be taken over the Iraq photos. The only person who was offered the editorship of the Daily Mirror was our first choice candidate, Richard Wallace.”

The Racing Post’s move to seven-day publication was given as the main reason for its big increase in profits.

More cost-cutting is expected across the company in 2005 as the savings target for that year has been raised from £30m to £35m. The company is said to be on target to shave £20m from budgets by the end of this year.

Overall, Trinity Mirror’s turnover was up 4.1 per cent to £572.7m for the six months to June and operating profit was up 18.5 per cent to £120.2m.

By Dominic Ponsford

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