Trinity Mirror has announced that its regional division made a profit of nearly £36m last year despite the impact of the economic downturn.

In its preliminary results for 2009 published this morning, the group said revenues for its regional titles had fallen by 23.5pc compared to a decline of just 3.2pc for its national titles.

But even though revenues were down by more than £93m, an overall cost-reduction of £60.8m in the regional division enabled it to turn in an operating profit of £35.9m.

Revenues fell from £396m in 2008 to £302.9m, with operating profits down from £68.2m the previous year.

A company statement accompanying the results said 2009 had proven to be another challenging year for the regional newspaper industry.

“Regional businesses are hit particularly hard by the recession due, firstly, to the reliance on a higher proportion of advertising revenues than circulation revenues and, secondly, to the fact that the majority of its advertising is classified,” it said.

“Our focus in 2009 has been on managing the business through the downturn and a comprehensive package of measures was put in place to support profitability.

“We have achieved increased efficiencies by reducing headcount, closing premises and reducing infrastructure costs. We made changes to the format and frequency of a number of titles, closing or selling 30 newspaper titles which had become unprofitable. Along with a restructured portfolio we introduced a simpler, flatter management structure which further reduced costs.”

The statement also said that the company’s new editorial operating model had enabled it to deliver “a step change in efficiencies and a reduction in headcount resulting in significant structural cost savings.”

It said costs in the regional division fell by £60.8m from £327.8m to £267m, limiting the fall in operating profit.

Commenting on the results, chief executive Sly Bailey said: “Whilst the severity of the economic downturn experienced during 2009 impacted group revenues, the resilience of our brands and commitment of our staff ensured that we delivered profits ahead of expectations.

“We continued to reap the benefits of our investment in cutting edge IT systems which are driving new, more efficient ways of publishing across media platforms. Ongoing tight management of the cost base enabled costs to fall by £67.9 million and was crucial in supporting our profits.”

Today’s results also made reference to Trinity’s recent purchase of GMG Regonal Media, which is due to be completed on 28 March.

The company said: “GMG Regional Media is a perfect strategic fit for our Group. This acquisition, which includes the Manchester Evening News with its proud and rich journalistic heritage, together with the weekly titles and associated websites extends our reach across print and online and is a further step towards our strategic goal of creating a local multimedia business of scale.”

Comments

prionmonkey (04/03/2010 10:57:41)
Greedy evil people. They ruin their workers’ jobs and crow about how much money they make. I hope their bonuses choke them. How did this country lose sight of what is right?

Miss Cynical (04/03/2010 13:36:35)
They can’t win!
If they lose money, people say they’re incompetent and don’t know how to run a business.
If they make money, they’re evil…!
Any business needs to make money to secure people’s jobs. And to make money, their costs have to be lower than their outgoings.
It is a business, not a charity.

Mr_Osato (04/03/2010 14:07:06)
Of course – but these figures clearly show that, even if not one penny of costs had been cut, the business would STILL have been in profit. In fact, that assumes that keeping on staff and not closing newspapers would not have led to any extra revenue – this is, of course, baloney.
Nobody is saying Trinity shouldn’t have controlled costs, but the kind of cull they’ve carried out in the past year, particularly the moronic decision to get rid of subs, will do nothing to position the business for future recovery.
At least those who’ve gone will have the ‘comfort’ of knowing that their sacrifice will have made shareholders richer and feathered the nest of the disgraceful Sly Bailey even further.

Paul (04/03/2010 15:33:14)
Mr Osato, your comment doesn’t make sense:
But even though revenues were down by more than £93m, an overall cost-reduction of £60.8m in the regional division enabled it to turn in an operating profit of £35.9m.
I read that as that if the cuts hadn’t been made, the company wouldn’t have turned a profit. Is that wrong?

asub (04/03/2010 15:55:25)
Paul: you’re not wrong, but nor is Mr_Osato… It’s somewhere in the middle. Trinity Mirror over-egged savings by some 30 million, assuming a strategy of staying in the black but retaining enough resource to grow in an upturn. As it is, TM newsrooms are now on the floor in terms of resource, morale and ability. Hardly an Investor in People!! Meanwhile, amidst the cuts, just wait til you learn of the profit bonuses about to be earned by Sly and Co… Blimey, we’ve heard the rumours and they are chokable!!

charlie (04/03/2010 16:44:54)
To prionmonkey, I’ll have you know that us low level workers have worked very hard for our bonus so I won’t be made to feel guilty for being good at my job.

Mr_Osato (04/03/2010 17:21:48)
Paul/Asub – by my reckoning, cost cuts of £60.8 million + £35.9 million = 96.7 million, which would leave a small profit, by my reckoning

bertie reed (05/03/2010 08:14:11)
Mr Osato – tip – contact Portsmouth FC – think you could correct their accounts & put them into profit very quickly!!!

Doug – The Local Mole (05/03/2010 15:24:38)
Re Mr_Osato – I have read your comments on many, many occasions, across many different articles, and although some of the things you say are not without merit – sometimes your total lack of business and financial knowledge – can only be described as alarming! If Trinity had costs of £327.8m in 2008 and had left them as they were, revenues of £302.9m would have left them with a loss of £24.9m. As it is, they reduced their costs by £60.8m, which turned their loss into a £35.9m profit. That said, their profit margin has still fallen from 17.2% to 11.9%, which any financial investor would tell you – is a significant fall. I suggest Mr_Osato goes on a basic accountancy course – it might just enlighten him on how editorial needs have to be balanced with running a business!