In a statement today (12 August), the publishing group behind the Daily Mirror, Sunday Mirror and more than 150 regional daily and weekly newspapers and 500 digital products, admitted the "challenging economic environment", had resulted in trading being "much weaker than previously anticipated".
Pre-tax profit of £28.9m for the first six months of the year compares to £84.8m in "recovering" 2010. Group revenue fell 2.9% to £371m, while operating profit tumbled 23.7% to £47.1m.
Once accountancy gains of last year's GMG Regional buyout and pensions scheme amends are taken into account, the group posted a 17% drop adjusted pre-tax profit from £50.4m to £41.9m.
Trinity Mirror identified "low levels of consumer and advertiser confidence", resulting in an underlying advertising revenue decline of 11.1%, partly fuelled by a 24% drop in public sector spending with the group.
At group level, advertising revenue fell by 10.1% in January and February, 9.8% in March and April, and 13.4% in May and June. The deterioration in revenue trends for May and June were said to reflect the much stronger comparatives for 2010, which benefited from the Fifa World Cup.
Sly Bailey, chief executive of Trinity Mirror, said: "While the economic environment remains difficult, we have undertaken a series of actions to limit the impact on operating profit. The rollout of our technology-led operating model continues to deliver efficiencies, and today we have announced an increase in our 2011 cost-savings target to £25m."
Broken out, Trinity Mirror’s five national newspapers were the hardest hit by the sluggish ad market: the Daily Mirror, the Sunday Mirror, The People, the Daily Record and the Sunday Mail.
National advertising revenue fell by 12.2% compared to a decline of 3.1% in 2010. January and February were down 9.0%, March and April fell 9.3% and May and June dropped18.3% due to tough comparatives driven by the World Cup in 2010.
In the group’s more than 150 regional titles, advertising revenue fell 10.4%, this compares to an 8.4% drop in the same period in 2010. The outlook appeared to be improving, with January and February ad revenues declining 10.8%, March and April declining by 10.1% and May and June declining by 9.9%.
By category the regional advertising performance for the period showed display advertising down 6.4%, recruitment down 19.6%, property down 6.2%, motors down 8.1% and other classified categories down 12.4%.
Display advertising now represents 45.8% of total advertising revenue with the most cyclical recruitment and property categories now representing 16.5% and 11.6% respectively.
Drops in the number of ad pages have been accompanied by fallings copy sales, with underlying circulation revenue down 5.4%. The group announced sales losses had been "partially mitigated by limited cover price increases".
However, the closure of News International’s Sunday rival News of the World last month was singled out as having had a positive impact on the circulations and advertising revenues of Trinity Mirror’s national Sunday titles: Sunday Mirror, People and the Sunday Mail.
Following the closure of the News of the World amid phone hacking scandal allegations, Trinity launched a range of publishing and marketing activities in a bid to maximise its share of the Sunday newspaper market.
Trinity reported: "The early results of this activity are highly encouraging with an increase in both volume and revenue of each of our six Sunday newspaper titles, particularly so for our three national titles.
"The benefits are evident in the improved group circulation revenues in July which are up 2% year on year with our Nationals up 4%, a significant improvement from the 5.4% decline in Group circulation revenues in the first half."
Bailey added: "Following changes to the national Sunday newspaper market we are highly encouraged by the considerable circulation volume growth seen by our national Sunday titles."