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 30th December 2001. This statement is being issued ahead of the Company's preliminary results announcement on 28th February 2002.
During the past five months, the Group has made good progress in implementing its strategic plans and cost reduction measures outlined on 28th July. In addition, the annual investment in digital media activities has been further reduced to approximately £10 million per annum from the beginning of 2002. The Group also anticipates a fall in newsprint prices in 2002 and negotiations with suppliers are currently ongoing. These actions will help to mitigate the effects of the uncertain economic outlook and unpredictable advertising conditions, which are expected to continue into 2002.
Throughout the year there has been significant volatility in the advertising market. Since 11th September, advertising conditions have deteriorated, particularly within the Companyundefineds national titles and those regional titles in the South East of England.
Regional newspapers - advertising revenues within the Group's regional titles grew by 2.0%* in the third quarter, with recruitment advertising growth of 8.5%. During this period, recruitment advertising in all areas other than the South East remained very strong. The South East saw a decline in recruitment advertising as employment conditions in the Thames Valley area reacted to the downturn in the high tech and IT industries. Since September, all regional businesses have seen a slowdown in the growth rate of national and local display and recruitment advertising revenues, with the areas around Heathrow and Gatwick and central London experiencing significant declines. Total regional advertising revenues in October and November declined by 2.3% and 2.9% respectively. The early outlook for December (which, in normal trading circumstances, is a difficult month to predict) indicates a continuation of the deterioration.
National newspapers - within the three UK national titles advertising revenues in August grew by 6.2% and for the first 11 days of September by over 2.0%. For the five to seven days immediately after 11th September most advertising within the national titles was removed, primarily at the request of advertisers. This resulted in a decline for the third quarter of 1.3%.
This has continued into the fourth quarter, with declines of 10.1% and 20.7% in October and November respectively. The current outlook for December is similar to November. Whilst display advertising has been badly affected, classified advertising within the national titles continues to achieve year-on-year growth.
The Scottish national titles, following a reasonable performance in the third quarter with a decline in advertising revenues of only 1.9% (compared to 5.9% in the second quarter), have been similarly impacted since 11th September. October and November have produced advertising revenue declines in these businesses of 13.0% and 17.3% respectively and December is expected to deliver a decline in line with October.
In September and October all national titles saw an improvement in circulation performance. The Mirror, has seen a 2.4% (year on year) circulation decline during the six months to the end of November, compared to 3.1% in the same period in 2000. The Daily Record's circulation during this period fell by 3.5%, compared to 5.3% in the 2000 comparable period.
* Advertising revenue growth rates for the Group and regional newspapers division are stated on a pro forma basis i.e. excluding revenue from Belfast Telegraph Newspapers (sold 30th July 2000) and including Southnews revenues throughout 2000 (acquired 28th November 2000). These growth rates also exclude advertising revenue from the three Metro titles, which is estimated to increase by £2.1 m to £4.2m for the 26 weeks to 30th December 2001.
Trinity Mirror, the UK's largest newspaper publisher, is today issuing a trading update in respect of the 26 week period to 1st July 2001, ahead of a series of analysts briefings prior to the Group's interim announcement on 27th July.
The 26 week period has been characterised by a relatively strong advertising performance in the first 13 weeks which has been offset by a difficult and volatile advertising market for the remainder of the period. In the AGM trading statement issued on 9th May, the company indicated that growth across all businesses and categories was slower. This trend accelerated over the last two months of the period.
Advertising revenue growth across the regional newspapers for the 26 week period is estimated to be 4.5%*. The strong first quarter was offset by a weaker second quarter, with an estimated 2% increase in the period April to June. This growth is principally driven by recruitment advertising, which is estimated to have grown by 17% in the 26 week period, with the first three months of the year seeing growth in excess of 20%, which has since eased off to 13% in June.
Advertising revenue for the UK national titles has grown by nearly 2% in the 26 week period, however, an estimated decline of 4% has been seen in the period April to June (with June declining by 10%). The Scottish nationals business has suffered from very difficult trading conditions, with an estimated decline in advertising revenue of 3.5% for the 26 weeks, which includes a decline of 6.5% during the period April to June.
Current trading conditions remain volatile with very limited visibility and no signs of a return to the level of advertising revenue growth that was seen in the earlier part of the year. Cost reduction measures are being applied throughout the Group to mitigate partially the effect a continuation of the current trend would have on the level of profitability for the year.
As reported in the preliminary results in March, the Board is also committed to initiating a number of long-term profit enhancing plans across the Group to develop further the significant strength of the core businesses. These plans will include continued investment to achieve the Group's strategic objectives. Further details of the profit enhancement plans, current trading and prospects will be provided in the interim announcement to be issued on 27th July.
*advertising revenue growth rates for the regional newspapers are stated on a pro forma basis i.e. excluding revenue from Belfast Telegraph Newspapers in 2000 (sold July 2000) and including Southnews revenues in 2000 and 2001 (acquired November 2000). These growth rates also exclude advertising revenue from the Metro titles, which is estimated to have increased from £0.4 million in the first 26 weeks of 2000 to £4.0 million in the current period.
To improve the flow of information to all investors, the Board of Trinity Mirror plc has decided to issue trading updates prior to the two close periods each year. The first of these statements, in respect of the second half of the financial year ended 2 January 2000, is issued today ahead of the Group's preliminary results announcement on 15 March 2000.
Overall Trinity Mirror's operations produced a strong performance in the second half of 1999, in line with market expectations at the time of announcing its merger, which completed on 6 September 1999. Good progress has been made in the integration of the businesses. The benefits of the integration, the favourable economic conditions and previous investment in titles provide a strong basis for growth.
National and sports newspapers
Advertising revenues for the national newspapers have been strong during the period producing second half year on year growth of 9%.
The Mirror's circulation performance during the last six months has led to further growth in its market share. The Mirror outperformed its direct competitors during this period. Increased revenue from the 2 pence price rise introduced in September (Monday to Friday editions) and 1 pence price increase on the Saturday edition (from late November) has been invested in further enhancing the newspaper, including the launch of 'M' magazine.
The Sunday Mirror has increased its market share during the last six months of 1999. The estimated decline in circulation of less than 0.5% compares very favourably with 11% in the same period of 1998. This performance reflects management actions in refocusing the paper's editorial stance closer to that of its sister daily title.
The Sunday People's circulation has declined by 8% during the last six months compared to the same period in 1998.
The Racing Post has improved circulation during 1999 with strong growth in advertising revenues from all sectors.
Scottish national and regional newspapers
The Scottish national newspapers have also achieved good growth in advertising revenues, both national and local. Circulation revenues have remained stable despite the increased promotional activity of the English tabloids.
Local factors led to variable growth rates in advertising revenues across the regional newspapers with particularly encouraging performances in the Scottish, Southern, Northern Ireland and Welsh regions. Industrial and employment issues in the Midlands and a lack of economic buoyancy in the North-West have affected the performances of these two regions. Both regional display and classified advertising continued to show growth in the second half of 1999 with an overall growth for the six months, year on year, of 4%.
The Group continues to be in discussions with its advertising customers regarding irregularities in the reporting of circulation numbers to the Audit Bureau of Circulation on certain of its Birmingham titles. Trinity Mirror remains confident that the outcome of these discussions and the impact on the Group will be as stated in its November announcement.
Magazines and exhibitions
The earnings of the division have increased during 1999, primarily as a result of the acquisitions in 1998 and during 1999.
New and interactive media
During the year the Group has continued to strengthen its existing new media properties and core brands, investing in local online franchises and developing national niche businesses using content from our own sites and that of our partners. Including ic24, the Group's free internet service provider launched in April, monthly page impressions on Group sites have increased to over 32 million.
Building on the Group's existing investment in its online businesses, the development of Trinity Mirror's new media strategy is well advanced. Trinity Mirror intends to outline its new media strategy by the time of the Group's preliminary announcement in March.
The integration of the two businesses is on track to deliver annual pre-tax cost savings of at least £15 million by the end of 2002, as indicated at the time of announcement of the merger.
Belfast Telegraph and Newscom
The Group is proceeding with the divestment of those Northern Ireland titles (including the Belfast Telegraph) which were required to be disposed of as a condition of consent for the merger. Prospective purchasers will be contacted imminently.
Trinity Mirror's potential interest in acquiring Newscom was announced in December and its application for consent was subsequently referred by the Secretary of State for Trade and Industry to the Competition Commission. The regulatory process should be completed by the end of April.
26 week period 3rd January to 2nd July 2000
The following announcement was made to the Stock Exchange today:
Trinity Mirror is today issuing a trading update in respect of the 26 week period to 2nd July 2000, being the first half of the financial year ending 31st December 2000. The group's interim results will be announced on 14th September.
During the first six months of the current financial year all of Trinity Mirror's operations have performed well. In addition, management has continued to make good progress in the integration of the merged businesses.
Circulation revenues from the three national titles, for the six months, have increased by 2.4% in comparison to the same period in 1999. In a very competitive circulation market, both The Mirror and the Sunday Mirror improved their circulation market shares. The national titles also achieved advertising revenue growth of 5.4% overall, with The Mirror and the Sunday Mirror achieving growth of 6.9% and 6.1% respectively and both titles increasing their respective market shares. In the face of sustained competition for circulation, the Scottish national newspapers also grew their market share and remain Scotland's leading daily and Sunday newspapers in terms of sales and readership. Advertising revenues increased for the Scottish national newspapers by 4.8% overall.
The regional newspapers have traded strongly across all regions, with particularly significant improvements in performance from the Midlands and Liverpool. Advertising revenues for the regional newspapers have increased by 7.3% for the six-month period, with an 8.0% improvement in classified advertising, driven by an increase of 21.4% in recruitment advertising. During the first six months of the year circulation revenues from the regional newspapers have remained stable. As a result of entering into the franchise agreement with Associated Newspapers in May 2000, the group's Metro newspapers will benefit from reduced costs and enhanced national advertising revenues.
The group's sports newspapers have seen very strong growth in advertising revenues during the six months to 2nd July 2000 and circulation revenue growth of 5.8%.
The group's new media strategy is progressing satisfactorily. At the end of June, the group's internet service provider, ic24, had over 455,000 subscribers, of which 383,000 were active. Group sites, including sporting-life.com, recorded over 53 million page impressions in June.
Trinity Mirror is also continuing to develop, in conjunction with Cap Gemini Ernst & Young, its technology platform that will seamlessly integrate the central and regional portals and enable enhanced functionality and profiling of users.
Given a continuation of the current economic environment a satisfactory outcome for the full year is anticipated.
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We are the largest national and regional news publisher in the UK, with influential and iconic brands such as the Daily Mirror, Sunday Mirror, Sunday People, Daily Record, Sunday Mail and market leading daily titles including the Manchester Evening News, Liverpool Echo, Birmingham Mail and Bristol Post.
Our brands have a long heritage of being trusted sources of news and information, with our editorial conviction and high standards of journalism providing audiences with timely information and opinion across multiple platforms.
Last year we sold 540 million newspapers, and we have a bigger online monthly audience than all our competitors including Mail Online and News UK.
Our network of over 70 websites provide 24/7 coverage of news, sport and showbiz stories, viewed by 110m unique browsers every month.