Trinity Mirror today announced a 16pc reduction in profits for the first half of the year despite significant growth in its regional online operations.
As widely anticipated, the group’s half-yearly results showed profits down from £95.6m for the period January-June 2007 to £80.5m for the same period this year.
The group announced plans for a further £20m in cost cuts in the wake of the figures which it blames on a “serious downturn in advertising.”
But Trinity also pointed to “good progress” in building up its digital businesses with revenues from its regional online arm up 33pc from £14.6m to £19.5m.
“The regional division’s digital media activities continued to deliver good growth with revenues increasing by 33pc and operating profits by 31.8pc,” said today’s half-yearly financial report.
Average monthly unique users across Trinity’s regional websites grew year-on-year by 27.1pc from 4.9m per month to 6.2m per month.
Overall, revenues from the regional division including both print and digital were down 4.7pc from £227m in 2007 to £216.4m, with profits down 21pc at £45.5m.
Regional advertising revenues for the first half of the year fell by 6pc, with circulation revenues down 2.7pc. The biggest falls in the various advertising sectors were in motors – down 17.6pc – and property, down 12.6pc.
Despite the downturn, Trinity Mirror chief executive Sly Bailey was upbeat about the group’s longer-term prospects.
“The numerous actions we took during the period to reduce our costs and improve our efficiency, product portfolio and balance sheet have served to partially offset the impact of the serious downturn in advertising expenditure being experienced by consumer-facing media businesses,” she said.
“We have implemented a further efficiency programme which will deliver at least an additional £20m of savings in 2009 by accelerating technological improvements to processes across editorial, advertising and pre-press.
“We believe that these initiatives alongside good portfolio management and our continued investment to build our digital revenues will see the group through this economic downturn and best position the business for growth when market conditions improve.”
The report says the focus of future management action will be on implementing a new, more efficient operating modeal while continuing to aggressively build its digital businesses.
It cites the deployment of new operating models in its regional Cardiff and Midlands centres as a template for the way ahead.
“In Cardiff, our new multi-media newsroom is fully operational and has delivered process efficiencies and cost reductions. In the Midlands, the implementation of new systems for advertising, pre-press and editorial is on schedule and on budget and provides the platform for further efficiencies within the publishing process,” says the report.
“The experience and learnings from the Midlands will be used to inform the development of the new operating model for other regions throughout 2009.”