- Trinity Mirror plc to focus on National newspaper titles and key Regional titles in Scotland, the North of England and Wales and UK digital assets
- Sports division, including Racing Post, and regional titles in the Midlands and London and the South East to be sold
- Adoption of new technology led operating model across Group to accelerate growth and reduce costs
- Programme will deliver additional annualised cost savings of £20 million by 2008
- The Board intends to at least maintain the current level of annual dividend per share
The Board intends to return to shareholders surplus capital arising from the disposals, net of related tax charges and such pension payments as are necessary
Commenting on the results of the comprehensive Business Review Sly Bailey, Group Chief Executive, said: "It has taken a great deal of hard work by everyone involved but I am very pleased we can now present a strategic plan for Trinity Mirror that, once delivered, will make us one of the most efficient and modern media groups in Europe.
"The proposed disposals will enable us to concentrate on the heart of the group and adopt a new, technology-led operating model that will ensure we serve our advertisers and readers better from a significantly lower cost base. The new integrated model will allow Trinity Mirror plc to develop as a multi-platform media business and capitalise on the enormous strengths we have in our core markets. Now this review has been completed we can move forward swiftly and turn our vision into a reality."
The Board of Trinity Mirror plc (the "Board") today announces the outcome of the review of the Group's businesses which was announced on 3 August 2006.
Background to the Business Review
Since 2003 the Trinity Mirror plc has significantly improved the underlying performance of its portfolio of businesses. The Group has been strengthened through a combination of investment, new launches and selected acquisitions and divestments. These include continuing investment in IT systems and printing presses, the acquisition of five digital businesses and the launch of more than 300 products and services. Non-core assets, including the Irish regional newspapers and the Magazines and Exhibitions division, have been divested. In addition, performance has been improved by a reduction in operating costs of over £60 million per annum and new digital revenues (including revenues from acquisitions) of around £30 million across the Group.
As the next logical step to maximise value the Board, in August, initiated an in-depth review of the Group's businesses, operating models and structure. The Review had two key objectives. Firstly, to determine the best way of maximising value from the Group's existing asset base. Secondly, to ensure the Group is properly positioned to capture the opportunities available to it in a rapidly changing media environment.
The Review has taken into account the current advertising market conditions impacting its Nationals and Regionals businesses, the synergies existing between different parts of the Group as well as the considerable opportunities available to the Group through the development of its digital activities.
In the course of this comprehensive Review several third parties have expressed an interest in acquiring a number of the Group's assets. These unsolicited approaches have naturally been fully considered as part of the Review. The approaches included a conditional indicative offer for the Nationals businesses which the Board concluded substantially undervalued these assets.
In addition, the Review, led by the Chief Executive, examined a full range of alternative structures for the Group including the separation of the Regionals and Nationals businesses by way of full demerger. Having thoroughly considered the implications the Board has concluded that a separation through de-merger would adversely impact shareholder value.
The Review demonstrated that there is considerable additional value that can be delivered to shareholders through a new, technology-enabled operating model that will generate benefits for advertisers and readers alike. These changes will enable the Group to make a number of cost savings and also offer opportunities to generate additional revenue as well as provide a stronger platform for investment and long-term growth.
Conclusions of Business Review
The Board sees the future of the Group as a multi-platform publishing and advertising business based on a combination of market leading newspaper titles and digital assets offering best-in-class margin potential and significant growth potential once advertising market conditions improve.
The Review led the Board to conclude that in order to maximise shareholder value for the medium to long term it should rationalise its portfolio of titles. The Review identified that the Group's Regional businesses in Scotland, the North of England, and Wales, complemented by its strong UK wide digital assets and supported by the strong cash flows of the Nationals, represent the best opportunities for growth.
Our newspaper titles in these regions enjoy leading positions in each of their well-defined and concentrated geographic markets. The complementary local digital businesses and the acquired digital assets provide the platform for strong growth opportunities and increasing shareholder value.
The Board believes that, whilst valuable assets, the Group's Regional businesses in the Midlands and London and the South East, do not offer the same opportunities for the Group and are likely to be more attractive to other owners. The Board has, therefore, concluded that it should seek to dispose of the Regional businesses in the Midlands and London and the South East.
Our National titles, with industry leading margins, generate strong, sustainable and robust cash flows which underpin the financial strength of the Group to enable it invest in and grow the business.
The Review also concluded that the Sports division, principally the Racing Post, has minimal overlap in terms of readership, advertising base or editorial content with the Group's other titles and operates as a standalone business within the Group. The Board therefore believes that the growth opportunities available to this specialist publishing business would be better served under different ownership. It is the intention of the Board that, as part of any divestment, the Racing Post brand is protected and strengthened.
These disposals will result in a Group with increased focus on a streamlined portfolio of high quality media assets, offering growth in revenues, margins and earnings. Strong cash flow generation will support this growth through continued investment and selected acquisitions and will provide continuing rewards to shareholders. The disposals do not affect any of the Group's Manufacturing network.
The Board has appointed Rothschild to advise it on the various disposal processes which are expected to be completed during the second and third quarters of 2007, subject to it receiving full and attractive offers for each of the businesses to be sold.
The Review looked at all elements of our portfolio across print and on-line, our organisational structure and the efficiency and effectiveness of our resources to drive revenues, manage cost and build profit.
We have identified a number of areas to improve the performance of our businesses significantly by further investment in technology. This investment will modernise and streamline our processes, drive revenues across print and on-line and allow us to serve our readers better and advertisers more effectively.
By integrating our print and on-line operations more closely we will be able to remove many of the existing barriers to cross selling opportunities and serve our markets at lower cost whilst sustaining attractive margins. The investment in IT systems will transform the way we do business by significantly reducing low value-added administrative tasks thereby freeing up resource to concentrate on revenue generation.
We intend to carry out a fundamental upgrade of editorial systems; to restructure our circulation sales support functions and outsource a number of them where practicable; and to streamline our advertising and pre-press functions using state-of-the-art technology so they will utilise online and call-centre sales channels with significant benefits for all.
- Specifically, the investment in new technologies will enable our regional businesses to:-
- Drive revenues by increasing our advertisers' reach through access to our powerful multi-media platforms.
- Automate the creation of many types of advertising in ways that significantly reduces paper processing and cost
- Create call-centres with better capacity utilisation and better conversion rates
- Modernise newspaper sales by creating a unified transport and logistics operation and outsource low value-added administration
- Streamline our editorial processes to allow more extensive and efficient multimedia publishing
Developing these capabilities will support our overall strategy of deepening our penetration of our geographies and markets.
In our Nationals business, system enhancements in advertising and editorial will result in efficiencies and streamlined processes. Work is already underway to de-layer management and outsource circulation sales supporting activities in Scotland. We aim to build on the total reach and relevance of our Nationals titles with on-line development being an integral part of our strategy. Our UK Nationals on-line digital presence will see new look sites designed to fully play to the strengths of the web, focusing on the key content strands of News, Sport and Showbiz. The sites will be easier to navigate featuring a substantial increase in audio visual and user generated content. Our objective is to increase substantially unique users and online revenues during 2007.
Business Review - financial impact
The businesses to be sold, namely Sports and the regional titles in the Midlands, London and the South East, in aggregate reported sales and EBIT of £132 million and £27 million respectively in the 26 weeks to 2nd July 2006. It is the Board's intention to return to shareholders surplus capital arising from the disposals, net of related tax charges and such pension payments as are necessary. Further guidance will be provided once the disposals have been completed.
The Board is confident that in the medium-term, the streamlined Regionals division will have the capacity to generate margins amongst those of the best-in-class operators in the UK regional newspaper publishing sector. Post 2007, having completed the investment in colour presses, the Nationals division will require minimal capital expenditure requirements over the medium to long term, thereby providing ongoing strong cash flow generation for investment and growth across the Group.
The investment programme required to support the introduction of the new operating model across the Group will be delivered over the next three years. The associated capital costs will be absorbed within the current £180 million capital expenditure programme announced in July 2005. Total Group capital expenditure projections beyond 2007 at around £25-30 million per annum are therefore also unchanged. In addition to capital expenditure it is expected that further non-recurring costs of £10m per annum will be incurred during 2007 and 2008.
This programme will deliver a further £20 million of annualised cost savings by 2008 with incremental revenue benefits expected from 2009.
Upon completion of the proposed divestments the Board is committed to ensuring an efficient capital structure and an appropriate dividend policy. In view of its confidence in the future performance of the Group, the Board intends to at least maintain the current level of annual dividend per share
26-week period ending 2nd July 2006
Trinity Mirror plc is today issuing a trading update ahead of its close period. The company will announce its interim results on 3rd August 2006.
On a like-for-like basis, excluding acquisitions completed in 2005 and 2006, Group advertising revenues for the 26-week period are expected to fall by 10.6% year-on-year. Including acquisitions Group advertising revenues for the period are expected to fall by 8.4%.
Like-for-like advertising revenues for the Regionals division are expected to fall by 9.7% for the period. With the exception of property advertising, which is expected to increase by 1.9% for the period, all advertising categories are expected to decline with falls of 6.7% for display, 21.0% for recruitment, 12.9% for motors and 3.0% for other classified categories.
Advertising revenues for the Nationals division are expected to fall by 12.1% for the period reflecting a 12.7% decline in the UK National titles and a 10.5% decline for the Scottish National titles.
Advertising revenues for the Sports division are expected to fall by 16.0% year-on-year and the Magazines and Exhibitions advertising revenues are expected to fall by 12.3%.
Group circulation revenues for the 26-week period are expected to fall by 1.0% year-on-year reflecting the impact of reduced volumes and vouchering activity on the Scottish Nationals partially offset by cover price increases. Expected circulation revenue declines of 1.4% for the Nationals, 3.1% for Sports and 1.1% for Magazines and Exhibitions have been partially offset by an expected increase of 1.4% for the Regionals division.
As highlighted at the AGM, the advertising environment remains weak and management continue to run the business on the assumption that this will continue for the remainder of the year.
Trinity Mirror plc is today issuing its regular trading update, ahead of its close period. The Company will announce its preliminary results for the 52 weeks ending 1 January 2006 on 2 March 2006.
In a difficult advertising environment, Group advertising revenues for the 5 months to November 2005 excluding acquisitions fell by 7.9% year-on-year. Group advertising revenues for the 11 months to November 2005 fell by 3.8%.
Advertising revenues for the Regionals division fell by 4.9% year-on-year for the five months to November 2005. Recruitment advertising was particularly weak given the slowing economy and increasing unemployment, with revenues falling by 20.5% year-on-year. However, we saw continued growth in property advertising which was up by 6.4% year-on-year. The period also benefited from strong advertising revenues resulting from the changes in the alcohol licensing laws.
Advertising revenues for the Nationals division fell by 14.4% for the five months to November 2005, with a 15.9% decline in the UK National titles and a 10.1% decline in the Scottish National titles.
Advertising revenues for the Sports division and the Magazines and Exhibitions division fell by 11.2% and 9.1% respectively for the 5 months to November 2005, reflecting slowing consumer spending.
Group circulation revenue increased by 1.4% during the period under review. Group circulation revenues for the 11 months to November 2005 increased by 2.4%. Circulation revenue growth for the five months to November 2005 of 3.1% for the Regional newspaper titles, 4.1% for Scottish Nationals and 4.9% for the Sports titles has been partially offset by declines of 0.3% for the UK Nationals and 4.8% for Magazines. The circulation revenue performance reflects the benefit of increased cover prices.
The acquisitions completed during 2005 are performing in line with our expectations.
Although the Group has experienced a difficult advertising trading environment over the second half, the benefit of management initiatives to mitigate the impact on profits gives the Board confidence in an outturn for the year in line with expectations.
The downward trend in the advertising market continues and there will be inflationary and other cost pressures in 2006, including higher newsprint prices. Management is running the business on the assumption that the advertising environment will continue to be challenging and is therefore taking action now on the cost base which will deliver further cost savings of up to £15 million in 2006. These savings are expected to partially mitigate the uncertain revenue outlook and cost increases anticipated in 2006. Exceptional costs of approximately £12 million associated with these savings will be reported in 2005.
26 week period ending 3rd July 2005
Trinity Mirror plc is today issuing a trading update for the 26 weeks ending 3rd July 2005 - ahead of entering its close period. The company will announce its interim results on 28th July.
Since our AGM statement on 5th May, the advertising market has remained challenging. Group advertising revenues for the 26 week period are expected to fall by 0.4% year on year.
The Regionals division is expected to achieve advertising revenue growth of 1.4% year on year for the period. Growth in display, other classified categories and particularly in property has been partially offset by declines in recruitment and motors.
Advertising revenues for the Nationals division are expected to fall by 5.3% year on year reflecting a 7.0% decline in the UK National titles and a 0.3% decline in the Scottish National titles. The National newspapers continue to hold volume market share of advertising.
The Sports division is expected to achieve advertising revenue growth of 14.5% year on year and the Magazines and Exhibitions advertising revenues are expected to increase marginally by 0.5%.
Group circulation revenues for the 26 week period are expected to increase by 3.1% year on year. All newspaper divisions are expected to achieve growth in circulation revenues with expected increases of 5.2% for Regional newspapers, 1.9% for National newspapers and 9.6% for Sports newspapers. Magazines and Exhibitions circulation revenues are expected to be 1.1% lower.
In an uncertain economic climate the Board's strategy "Stabilise Revitalise Grow" continues to drive improvements in performance. Whilst we anticipate the advertising market will remain extremely challenging the Board expects a satisfactory outcome for the year.
53 week period ending 2nd January 2005
Trinity Mirror plc is today issuing a trading update, ahead of the close period, which is in line with expectations.
The Company will announce its preliminary results for the 53 weeks ending 2nd January 2005 on 3rd March 2005.
Group advertising revenues for the 5 months to November 2004, on a like for like basis excluding the regional titles in Ireland disposed in January 2004, have increased by 4.2% year on year.
The Regionals division achieved advertising revenue growth of 4.5% year on year for the period. With the exception of motors, all categories achieved year on year growth with particularly strong growth in property.
The Nationals division achieved advertising revenue growth of 2.8% year on year reflecting a 1.6% increase in the UK National titles and a 6.1% increase for the Scottish National titles.
The Sports division and the Magazines and Exhibitions division achieved advertising revenue growth of 14.5% and 2.8% respectively.
Group circulation revenues for the 5 months to November 2004 on a like for like basis excluding the regional titles in Ireland disposed in January 2004, have increased by 3.3% year on year.
All newspaper divisions continued to achieve strong circulation revenue performance with increases of 4.4% for Regional titles, 3.3% for UK National titles, 0.8% for Scottish National titles and 5.8% for Sports newspapers. Magazines and Exhibitions revenue was down 1.0%.
The strong circulation revenue performance reflects the benefit of increased cover prices partially offset by circulation declines.
26 week period ending 27th June 2004
Trinity Mirror plc is today issuing a trading update ahead of meetings with analysts. The company will announce its interim results on 29th July.
Group advertising revenues for the 26 week period, on a like for like basis excluding the regional titles in Ireland disposed in January 2004, are expected to increase by 5.1% year on year.
The Regionals division is expected to achieve advertising revenue growth of 6.0% year on year for the period. Advertising revenues for the Regional newspaper titles (excluding Digital Media) are expected to increase by 5.5%. All categories have shown good growth with particularly strong performance from recruitment.
The Nationals division is expected to achieve advertising revenue growth of 2.7% year on year reflecting a 2.6% increase in the UK National titles and a 3.0% increase for the Scottish National titles.
The Sports division and the Magazines and Exhibitions division are expected to achieve advertising revenue growth of 19.0% and 3.1% respectively.
Group circulation revenues for the 26 week period, on a like for like basis excluding the regional titles in Ireland disposed in January 2004, are expected to increase by 6.2% year on year. All divisions are expected to achieve growth in circulation revenues with expected increases of 3.9% for Regional newspapers, 6.6% for the National newspapers, 9.2% for Sports newspapers and 7.8% for Magazines and exhibitions. Whilst circulation revenues have increased, circulation volumes during May for the Daily Mirror have been disappointing.
The expected increases reflect the benefit of increased cover prices partially offset by circulation declines.
The Board remains confident of the outcome for the year.
52 week period ending 28 December 2003
Trinity Mirror plc is today issuing a trading update in respect of the second half of the 52 week financial period ending 28th December 2003. This statement is being issued ahead of the Company's preliminary results on 26th February 2004.
Overall the Group continues to trade in line with the Board's expectations for the year with improved advertising revenues for our Regionals division offsetting a weaker advertising performance from our Nationals division in the second half.
Whilst advertising conditions for our Regional newspaper titles have shown signs of stabilisation during the past five months, conditions for our National titles continue to be difficult and volatile. Group advertising revenues for the 5 months to November 2003 increased by 1.0% year on year.
The Regionals division (incorporating Digital Media and Metros) achieved advertising revenue growth of 3.9% year on year for the period. Excluding Digital Media and Metros, advertising revenues for the Regional newspaper titles increased by 3.0% year on year. This was despite advertising revenue falling by 0.7 % year on year in the same period for our Regional newspaper titles in London and the South East. Our Regional Newspaper titles excluding Metro's and our titles in London and South East increased advertising revenues by 4.3%.
For our Regional newspaper titles all categories achieved year on year growth with the exception of Motors which declined by 2.2% for the period. Recruitment revenues increased by 1.4% year on year for the period representing an increase of 5.5% for our regional newspaper titles outside London and the South East which was offset by an 11.3% fall in London and the South East. Whilst the South continues to experience year on year declines in recruitment advertising, an improving trend has emerged in the last three months with year on year declines of 15.6% for September, 8.7% for October and 6.7% for November.
Advertising revenues for the Group's Nationals division fell by 5.7% year on year for the period, with declines of 5.7% and 5.5% for our UK national titles and Scottish national titles respectively.
Group circulation revenues for the period July to November 2003 increased by 4.7% year on year for the 5 months to November 2003.
Circulation revenues for the Regional newspaper titles increased by 2.1% year on year for the period, with cover price increases offsetting volume declines.
Circulation revenues for the Nationals division increased by 5.2% year on year for the period. This reflects the benefits of restoring the cover price of the Daily Mirror to 32p outside Scotland partially offset by reduced circulation volumes. Circulation revenues for the UK national titles increased by 6.6% and for the Scottish national titles by 0.1% during the period.
Our strategy "Stabilise Revitalise Grow" is on course and the Board is confident that, despite the adverse effects of continued volatility in the advertising market for our National titles, performance for the year will be at least in line with expectations.
- all advertising and circulation results of the regional newspaper titles are shown on a like for like basis excluding the results of Post Publications Limited and Ethnic Media Group Limited which were disposed of in June 2002, Channel One which was closed down in November 2002 and Wheatley Dyson which was sold in February 2003.
26 week period ending 29th June 2003
Trinity Mirror plc is today issuing a trading update ahead of the company's interim results announcement on 31st July.
Advertising conditions have remained volatile during the last six months. Group advertising revenues for the 26 week period are expected to be flat year on year, with a 0.6% increase in the first quarter offset by a 0.4% decline in the second quarter. The weaker performance in the second quarter reflects the impact of the war in Iraq and incremental World Cup revenues in June 2002.
The Regionals division (incorporating Digital Media and Metros) is expected to achieve advertising revenue growth of 0.6% year on year for the 26 week period. Excluding Digital Media and Metros, advertising revenues for the Regional newspaper titles are expected to fall by 0.3%. This reflects a 0.8% decline in the first quarter partially offset by an expected 0.3% increase in the second quarter.
The Regional newspaper titles (excluding Metros and our titles in London and the South East) are expected to achieve advertising revenue growth of 1.2% year on year. London and the South East advertising revenues are expected to fall by 4.4% year on year. Recruitment revenues in the Regional newspaper titles are expected to fall by 1.0% year on year, a 12.9% fall in London and the South East substantially offset by an increase of 3.0% in the rest of the Regional newspaper titles.
Advertising revenues for the 26 week period for the Nationals division are expected to fall by 0.8% year on year, with an expected 0.1% increase in the UK National titles offset by an expected 3.4% decline for the Scottish National titles. A strong first quarter saw advertising revenue grow by 1.4%. The second quarter was weaker with advertising revenue expected to fall by 3.1%.
Group circulation revenues for the 26 week period are expected to fall by 2.8% year on year with a 7.5% decline in Q1 offset by an expected 2.1% increase in Q2.
Circulation revenues for the Regional newspaper titles are expected to fall by 1.0% for the period, with cover price increases partially offsetting revenue declines from volume decreases.
Circulation revenues for the Nationals division are expected to fall by 4.4%, representing falls of 5.0% and 2.1% for the UK and Scottish National titles respectively. Restoring the normal cover price of the Daily Mirror has impacted circulation, which fell year on year by 5.2% (excluding sampling) for the first 5 months. However, circulation of the Daily Mirror rose 1.9% month on month in May following a 3.4% month on month fall in April.
As noted at the AGM the directors believe the uncertain external trading environment will continue for the remainder of the year. Nevertheless, subject to there being no further adverse changes to the trading environment the Board anticipates a satisfactory outcome for the year.
* all results are shown on a like for like basis, excluding the results of Post Publications Limited and Ethnic Media Group Limited which were disposed of in June 2002, Channel One which ceased trading in November 2002 and Wheatley Dyson & Son Limited which was disposed of in February 2003.
26 week period 31st December 2001 to 30th June 2002
Trinity Mirror, the UK's largest newspaper publisher, is today issuing a trading update ahead of the Company's interim results announcement on 31st July.
Progress on strategy
During the first six months of the year, the Group has continued to make significant progress in the implementation of the strategies for its key businesses and in the realisation of its targeted cost savings.
During the last six months' implementation of the regional newspaper division's "from Biggest to Best" strategic programme, it has become clear that the potential improvement opportunities are greater than first identified and can be realised at a faster pace.
As announced in February, the Group will invest an incremental £20 million this year (plus a reallocation of annual marketing spend, including the withdrawal from bulk sales) in the integrated marketing strategy developed for the two Mirror titles. This strategy has been designed to increase, over time, frequency of purchase by existing readers and to improve the titles' appeal to young readers entering the tabloid market. Over the past three months the foundations of the strategy have been successfully laid, including editorial repositioning; a new branding campaign; and the use of price discounting, in a controlled and planned manner, as a stimulus for occasional and infrequent readers to purchase the newspaper more often. Early research on the product changes and branding campaign are extremely positive and the improved circulation performance resulting from the Daily Mirror cover price discounting has met the Group's expectations.
In Scotland, the Daily Record and Sunday Mail's advertising improvement strategy is delivering positive results, as indicated by its improving advertising revenue performance over the past five months.
On 19th June, the Sunday Business Post (a small non-core regional business based in Dublin) was sold for approximately Euro 10 million. This business made an operating loss of £0.2 million in 2001.
There has been a clear difference in advertising market conditions for regional newspapers in the South East and London (which has seen significant decline throughout the period) and the rest of the United Kingdom (where market conditions have been tough but considerably stronger than the South East). Advertising revenue decline, year-on-year, across the regional newspapers (excluding the three Metro titles and the Sunday Business Post) for the 26 week period is expected to be 2.3%, with a decline of 11.6% in the South East/London offset by growth of 1.7% across the rest of the division. Recruitment advertising revenue is estimated to have declined 5.1%, although the South East/London fell 21.7% and the remaining regional businesses (excluding the Metro titles and the Sunday Business Post) are estimated to grow by 2.8%.
The advertising revenue of the three Metro titles for the 26 weeks is expected to increase by 7.9%, year-on-year.
Advertising conditions for the Group's three UK national titles have remained extremely difficult with very limited visibility, resulting in an estimated year-on-year revenue decline of 10.3% for the 26 week period. However, May and June have seen a significant improvement in advertising revenues (with an estimated year-on-year increase of 0.4%) compared to the first four months of the year. The Scottish national newspaper operations are expecting an advertising revenue decline of only 2.0% for the 6 month period, primarily reflecting the successful implementation of the business's advertising strategy and a robust local advertising market.
Circulation revenue of the Group's regional newspapers increased 0.7%, compared to the same five month period in 2001, as a result of cover price increases applied to certain titles.
During the first four months of the year the ABC sale (excluding sampling) of the Daily Mirror declined 2.4% year-on-year. In May, following the brand relaunch and introduction of cover price discounting, the Daily Mirror's ABC sale (excluding sampling) was only 0.5% down year-on-year.
During the first five months, the ABC sale (excluding sampling) of the Sunday Mirror declined, year-on-year, by 2.5% and the Sunday People by 5.1% (with May's year on year decline of 1.8% being its lowest rate of decline since 1999).
A long term plan based on intensive micro-marketing activity has been put in place to improve the circulation performance of the two Scottish national titles. During April and May there has been a limited impact from cover price discounting by the UK tabloid newspapers in Scotland. Consequently, during the first five months, the Daily Record's circulation volumes in Scotland declined by 4.2% and the Sunday Mail declined 3.2%. This trend has continued into June.
As stated in the Chairman's AGM trading statement issued in May, the directors believe it is prudent to plan on the current advertising conditions remaining throughout most of the year. However, our trading performance to date, the continued successful implementation of the Group's strategic objectives and the realisation of cost savings ahead of expectations provide considerable support to the Group's financial prospects in 2002. The group also continues to benefit from the £13 million reduction in the level of investment in digital media (compared to 2001) and the impact of the £17.5 million newsprint price decrease. Consequently, the directors are confident of delivering a satisfactory financial outcome for the year.
Trinity Mirror, the UK's largest newspaper publisher, is today issuing a trading update in respect of the second half of the financial year ending 29th December 2002. This statement is being issued ahead of the Company's preliminary results on 27th February 2003.
Significant progress has been made during the past five months in the implementation of our strategies for the key businesses and in delivering the targeted cost savings and revenue enhancements for the financial year ending 29th December 2002.
Advertising revenues across the group were down 2.5% year-on-year in the third quarter but are 0.3% up in the first two months of the fourth quarter. We continue to experience something of a north/south divide in advertising performance.
The clear strategic approach to our main businesses - together with vigorous cost control, further reduction in digital media investment, lower interest rates and our strong cash flows - has limited the impact that the difficult advertising and economic conditions might otherwise have had on our underlying performance, which remains in line with our expectations.
The "from Biggest to Best" strategy for our regional newspaper division continues at considerable pace and is delivering revenue and cost based performance improvements.
There have been encouraging signs of advertising growth for our regional newspapers over the past two months. Furthermore, a small improvement over October and November is expected in December.
October saw overall advertising growth year on year of 1.2%* with recruitment up by 2.6%. Revenues also grew marginally by 0.6% in November with recruitment up by 1.4%. This compares to a year on year fall of 2.4% in the third quarter and 2.5% in the first half. Our businesses in the North, South Wales, Ireland and Scotland continue to do well and act as a balance to the tougher West Midlands and Southern markets. Although trading conditions in London and the South East remain difficult, there are signs of improvement in this area.
Circulation revenues are down 1.5% in the period July to November with volume decreases partially offset by cover price increases.
Our integrated marketing strategy for the two Mirror titles to sharpen the brand and over time to increase frequency of purchase continues to make progress.
The latest ABC circulation figures for the Daily Mirror show a headline growth in November of 1.9% year on year and 2.5% compared to October. Excluding sampling, the November year on year growth is 3.4%, primarily as a result of the Paul Burrell exclusive series of interviews, illustrating the importance of the strong Mirror brand. The Daily Mirror circulation (excluding sampling) declined 2.3% year on year in the period July to November compared to a decline of 1.9% in the first six months. However the second half comparison is adversely impacted by the strong performance in 2001 following the events of September 11.
Our three national newspaper titles saw advertising grow in the third quarter year-on-year by 0.5%, despite a challenging Sunday market. October advertising revenues declined by 1.7% but this has been followed by growth of 5.7% in November. The performance continues to be driven by strong retail advertising with third quarter growth in this sector of 38.3% and in excess of 20% growth during October and November. December is expected to deliver overall advertising performance ahead of November.
The Scottish Nationals advertising performance reflects the benefits of the advertising improvement strategy with revenues falling year on year by only 0.1% in the third quarter and October and November delivering growth of 4.6% and 4.1% respectively. This improving trend is expected to continue into December. During the period July to November the Daily Record's and the Sunday Mail's circulation in Scotland declined year on year by 7.4% and 3.9% respectively compared to declines of 4.5% and 3.5% respectively for the first half.
* all advertising and circulation results for the Regional newspaper titles are shown on a like for like basis excluding the results of Post Publications Limited and Ethnic Media Group Limited which were disposed of in June 2002 and advertising revenues further exclude the results of the Metro titles