Trinity Mirror’s strategic programme Stabilise Revitalise Grow is being hailed a success with the annual cost-saving target of £35m exceeded by £5m last year.

The company’s annual results show that the regional newspaper division of 240 local newspapers remains strong, and as well as improving operating profit and margins in 2005, launched a total of 36 new products and services, including weekly paid-for and free newspapers, on-line brands, directories and shows.

More acquisitions and growth are planned, according to chief executive Sly Bailey, who reported that it was the focus on growth and cost management which had mitigated the impact of declines in advertising revenue on operating profit and margin.

For 2006, the focus for the regionals will be on driving improvements in performance while maintaining tight control of costs.

Her annual report said that the year ahead would also see further progress in developing multi-platform publishing as the division reaped the benefit of acquisitions and continued its digital development programme.

In addition, new Metro titles in Liverpool and Cardiff would be a launched in partnership with Associated Newspapers, building on the success of the Metros in Glasgow, Newcastle and Birmingham.

Sly Bailey said: “Despite the adverse revenue environment we continued to invest in the portfolio, revitalising and relaunching existing titles to ensure they remain relevant, compelling propositions for both readers and advertisers.

“2005 saw the launch of five weekly newspapers, both paid-for and free, achieving our aims of strengthening our position within existing marketplaces and expanding our publishing footprint. These are all profitable in their first year.

“2006 will see the continuation of the ‘Stabilise Revitalise Grow’ strategy with the aim to drive further improvements through continued investment and driving efficiencies.

“The advertising market is expected to remain difficult, and we also anticipate significant cost pressure from newsprint price increases of seven per cent, increasing energy costs, increased labour costs and other inflationary cost increases. However, we have already taken steps to partially mitigate the impact of these difficult trading conditions with the targeted cost savings of £15m for 2006.”

Chairman Sir Victor Blank, who is to leave the company in May, paid tribute to the staff and said: “The strength of our businesses lies in the talent, the commitment and the creativity of our people at all levels, both in management, in operations and in support functions. They have performed wonderfully well in difficult conditions throughout 2005 and I know that they remain very committed to the success of this group.

“Our industry remains challenged by changing patterns of behaviour, but we believe we have the right strategy to develop opportunities for growth both through acquisition and organically within our existing businesses. The board is confident that the talent and resources of the group will enable us to deliver a satisfactory outcome for 2006.”

He said that despite the difficult advertising conditions, the division maintained its focus on improving profitability, reducing costs and improving margin. And the difficult trading environment had not stopped investment to expand the business for the future.

The regionals division improved operating profit by £1.3m (0.9 per cent), despite revenue declines of £5.3m (one per cent). On an actual basis, revenues for the division decreased by £0.5m (0.1 per cent) from £540.1m to £539.6m and operating profit decreased by £0.3m (0.2 per cent) from £151m to £150.7m.

Advertising revenue for the division fell by 2.7 per cent from £415m to £403.7m. Circulation revenue increased by £3.4m (4.3 per cent). Digital media activities continued to grow, with advertising revenue up by £1.5m (31.3 per cent) across all categories other than property.