Newspaper publisher Trinity Mirror has decided to keep all of the titles it purchased from Local World last year rather than sell some of them on to their former owner.
The £220m deal completed in November included a clause which would have seen the Cambridge News and a group of sister weeklies sold on for £15.8m to Iliffe News and Media, which owned them before the creation of Local World in 2012.
However TM has now decided it would not be in its interests to proceed with the sell-on, and is instead paying a £2m “break fee” to the Iliffe group.
Trinity Mirror announced the move as it published its annual results this morning, on the day it also launched the first new national print newspaper for 30 years.
Today’s results, published as The New Day hit the streets for the first time, show overall revenues at the group fell by 6.9pc to £592.7m during 2015.
However with cost reductions of £20m – £10m higher than originally targeted – operating profits rose by 3.9pc to £109.6m.
The report also shows underlying digital publishing revenues grew by 21.9pc during the year, increasing from 32.4m to £42.9m.
However print publishing revenues were fell from £521.6m in 2014 to £485.9m last year, a drop of 9.5pc.
On the Local World deal, the report identifies a target of £12m a year of “synergy savings” starting from next year but anticipates restructuring costs of £20m during the current year, as well as capital expenditure on integrating the two groups’ IT systems.
It says the group is making “good progress” on the integration of LW within its regional division, and “finding opportunities to benefit from best practice.”
On the aborted Iliffe deal, the report states: “After extensive work on separation of the business over the past three months, the Board concluded that it was in the best interests of the company not to proceed with the disposal and therefore pay a break fee of £2m to Iliffe Print Cambridge Limited.”
As well as the Cambridge News, other titles that will now not be changing hands include the Herts & Essex Observer, Herts Mercury Series, Cambridge News & Crier Series, Harlow Star Series, and the Ely Weekly News, Haverhiil News and Newmarket News.
Commenting on the results, TM chief executive Simon Fox said: “I am pleased with the profit growth we delivered in 2015 despite the challenging print environment.
“Our significant efforts on improving our balance sheet over the past three years enabled the transformational acquisition of Local World. We are delighted to welcome the Local World team to Trinity Mirror and are making good progress with the integration of the two companies and finding opportunities to benefit from best practice.
“Whilst we expect print markets to remain difficult in 2016, the continued implementation of our strategy gives the Board confidence in our performance for the year ahead.
“We have today launched, The New Day. It is an exciting and innovative initiative which we believe fills a gap in the market for a daily newspaper designed to co-exist in a digital age.”
Other initiatives highlighted in the report included April’s launch of Britain’s biggest free weekly newspaper, the Manchester Weekly News, with a distribution of 265,000 across Greater Manchester.
The report also promises more relaunches of its regional titles following last year’s revamps of the Liverpool Echo and Birmingham Mail.
It states: “The Liverpool Echo was re-launched in June and the Birmingham Mail was re-launched in October with other regional brands to follow.
“The new design reflects the changing media consumption habits of our readers with less focus on crime, more reporting on things to do in the city and improved coverage in areas such as football.”
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Good decision by TM. After all, the future is paper as we see with today’s launch of the new national title. NOTE: (I apologise if in the past I have given the impression the future was digital. This was a message drilled into me by people who hold my future in their hands. If this should change again I will be straight back here to set the record straight. Thanks.)
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Oh dear. This is not the impression the Illife family gave to staff at Cambridge on a recent visit. I suspect there will be more than a few sweating executives jockeying for position in the weeks ahead.
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One can’t help but wonder if this is a ‘safety net’ in the event of the new dawn of huge digital revenues not turning out to be so ‘huge ‘ as expected.
Bit of a last minute re think about just how strong or weak their online offering is?
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“Bridging the decline in print with the growth in digital” is the mantra of Trinity Mirror chief executive Simon Fox, indeed he repeated it today when presenting the company’s annual results. Everything that happens at TM must be seen with this in mind. As we all know, at present the growth in digital is not matching the decline in print. So the plan is… buy Local World and launch The New Day in order to slow the decline in print and give digital longer to grow in its place. He’s buying time.
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If I understand it digital revenue is 22% up (from what to what – £100 to £122?) but overall revenue is 6.9% down. Seems to be a discrepancy there. Would seem to be a lot of “bridging” to be done, TM Journo.
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Yes, that’s the point Dick. That’s why he’s buying time.
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TM digital revenue in 2015 was £42.9m. That’s a long way behind print revenue. Again, that’s why he’s buying time. Yes, there’s no guarantee the gap will be bridged. Yes, there’s a long way to go. Yes, there’s decline in the industry and good friends have lost their jobs. Yes, there’s scepticism about what’s happening. But hey, we can either be cynical about it and take the mickey, or we can go for it. I (and thousands of TM colleagues and indeed thousands of others throughout the newspaper world) choose the latter option.
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Trinity Mirror journo is correct (I’m also at TM). I think Fox & Co fear the ‘tipping point’ will not happen soon enough, hence the flurry of activity back into print. If they wait the tipping point may only arrive when print revenue is so reduced that the £s just don’t add up and shareholders won’t wait. It’s about wringing out the most profit from print while hoping the elusive magic digital profit (note profit and not revenue) materialises from somewhere.
Look at the figures – print revenue £485.9m
digital revenue – £42.9m.
And if even MailOnline is not in profit then what hope the rest.
Unfortunately Fox can’t change the digital 1st mantra to what is really a print 1st operation as that’d look bad to the City and investors. But for those of us still on the nationals it offers at least a few more years. Now that’s real magic number…..
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Having seen The New Day, I hope the future is digital. I’m absolutely shocked how bad it is. Trite, amateurish and utterly worthless. They seriously think people are going to buy this dross? I’ll give it three months. At most.
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So what happens to all the staff at Cambridge now Edward illife has lined his pockets a little more
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The new paper given away free looks like…well… a free paper
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Dick, the report shows underlying digital publishing revenues grew by 21.9pc during the year, increasing from 32.4m to £42.9m, which is substantial progress, although still way below what print brings in. Like you, I am convinced that gap will never be bridged.
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They offered me a free copy of New Day in Tesco today but I didn’t take it, despite me being an ex journo and loving the newspaper industry. When I ask myself why I didn’t take it, it’s because I suspected it would be absolute kecks.
I genuinely can’t remember the last time I read something in a major newspaper that made me think about anything, question anything, or even entertained me. Surely that was the point of journalism.
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Dick, the report also shows underlying digital publishing revenues grew by 21.9pc during the year, increasing from 32.4m to £42.9m, which is a substantial improvement, though far less that the revenues from print. Like you, I am convinced that this gap will never be bridged, leading to even more redundancies. I can see the time, in the not to distant future, when editors-in-chief in geographical groups will replace all the individual editors, because there are limits to just how far you can go with getting rid of photographers, reporters and writers. Sub-editors? Most, if not all, have already gone and it shows. Looking at the latest ABC figures, the future of print is bleak in the regions. How can print survive on such tiny – and fast-shrinking – circulations? I still love ‘real’ newspapers but it is so easy to go to online versions and most don’t cost a penny as so many readers have discovered. More’s the pity.
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If the other regional re-launches go the way of Liverpool and Birmingham then I guess we can expect their sales to go down as well. As for The New Day, the least said the better….but don’t expect many, if any, people to buy it once they start charging for it!
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Jeff Jones. You’ve got the content of New Day spot on without even seeing it. Vacuous sums it up. But you should take a look. I guarantee it will be even worse than you feared. £10 to a charity of your choice if I’m wrong.
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Harry, I don’t doubt it pal. Apparently some of the new staff are on secondment from women’s magazines. Not really my bag that!
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Iliffe has messed everyone around with its little newspaper fantasy. Eddie turned up at the office claiming to be the saviour of print and people’s jobs but turned out to be a complete time-waster. If it were possible, he should be utterly embarrassed. And he should be apologising for wasting everyone’s time.
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Yes, New Day was very disappointing.
Extremely light and fluffy and irrelevent.
Strange to see a housewife in combat with the PM over Brexit, when Gove, Boris or farage might have been more appropriate.
I expect the other papers need not fear New Day except perhaps the Daily Mirror.
Far better for TM and co to shore up their existing papers than come up with crap like New Day.
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It would be nice to know the real reason for the deal to fall through. Iliffe should have had the deal gone through by February, I’m guessing TM got fed up and kept the papers
How long before the “synergy savings” (I hate that phrase so much) effect Cambridge and Herts Staff? I can see more departments centralised to almost nothing
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By the way, the gap that Simon Fox wants Trinity Mirror to bridge is that between the decline in print (down £35.7m from 2014 to 2015) and the growth in digital (up £10.5m from 2014 to 2015). He ‘s not talking about bridging the revenue gap, which is £485.9m print, £42.9m digital. Of course, by the time we get there (if we get there) TM’s overall revenue will have declined substantially.
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