Trinity Mirror has reported an expected fall in revenue and profit as it increases its structural cost savings target for the year to £20m.
For the six-month period to 2 July 2017, the group, which publishes the Daily Mirror and numerous regional titles, posted overall revenues of £320m, down 14.6% on the same period last year. Operating profit was down 9.4%, from £69.1m to £62.6m, and pre-tax profit fell by 8.3% to £61.3m. The results took in one less trading week than the same period last year.
Print revenue fell on a like-for-like basis by 11.9% in line with expectations. However, in real terms the drop was 16.6% as the “like-for-like” comparison excludes from the 2016 comparative the extra week of trading, the print contract for the Independent, which ceased in April 2016, the sale of Rippleffect in August 2016 and other portfolio changes.
Revenue for publishing, which incorporates print (circulation and advertising) and digital, fell 14% to £296.4m comparatively, with adjusted operating profit down by nearly 10% to £66.8m. Operating margin was up by just over 1%. Contract print revenues fell 13% comparatively, down to £16.9m, after its Cardiff printing site closed at the end of last year.
Trinity Mirror group finance director Vijay Vaghela said in a webcast today (31 July) that volume declines in print had been partially mitigated by price increases and that the decline in print sales had been partially offset by growth in digital sales of 5.9%.
Structural cost savings of £10m were delivered for the period, which included “synergy savings” from the integration of the acquired rival regional publisher Local World, and the target for the full year has now been increased by £5m to £20m.
Trinity chief executive Simon Fox said the group had delivered “a resilient performance” in difficult trading conditions.
Fox said: “We made strong operational progress during the first part of the year. Once again the news agenda was relentless, with a series of dreadful terrorist attacks, the Grenfell tower disaster and the surprise General Election amongst others. Our journalists were at the heart of all these events.”
Fox added that operating margins were up by two percentage points overall and net debt had been reduced. He said he was pleased to have secured a five-year contract to print The Guardian and Observer, as well as winning the publishing contract for the World Cup in Russia next year.
Trinity will take on the printing of The Guardian, which is set to switch from its mid-size Berliner format and go tabloid, from early 2018. It is unclear at the moment which of its five printing sites – Watford, Birmingham, Teesside, Cardonald (Glasgow) and Oldham – will take on the work.
Trinity’s pension deficit fell by £59.2m to £406.8m and the group paid £20.6m into the defined benefit pension scheme during the period. The provision for dealing with historical legal issues increased by £7.5m.
In its 2016 annual results announced in February, the group reported a sales increase of 20.2%, which was in the main put down to the Local World acquisition.