Trinity Mirror plc is today issuing its regular trading update,
ahead of its close period. The Company will announce its preliminary results for
the 52 weeks ending 1 January 2006 on 2 March 2006.
Advertising revenues
In a difficult advertising environment, Group
advertising revenues for the 5 months to November 2005 excluding acquisitions
fell by 7.9% year-on-year. Group advertising revenues for the 11 months to
November 2005 fell by 3.8%.
Advertising revenues for the Regionals division fell by 4.9%
year-on-year for the five months to November 2005. Recruitment advertising was
particularly weak given the slowing economy and increasing unemployment, with
revenues falling by 20.5% year-on-year. However, we saw continued growth in
property advertising which was up by 6.4% year-on-year. The period also
benefited from strong advertising revenues resulting from the changes in the
alcohol licensing laws.
Advertising revenues for the Nationals division fell by 14.4%
for the five months to November 2005, with a 15.9% decline in the UK National
titles and a 10.1% decline in the Scottish National titles.
Advertising revenues for the Sports division and the Magazines
and Exhibitions division fell by 11.2% and 9.1% respectively for the 5 months to
November 2005, reflecting slowing consumer spending.
Circulation revenues
Group circulation revenue increased by 1.4%
during the period under review. Group circulation revenues for the 11 months to
November 2005 increased by 2.4%. Circulation revenue growth for the five months
to November 2005 of 3.1% for the Regional newspaper titles, 4.1% for Scottish
Nationals and 4.9% for the Sports titles has been partially offset by declines
of 0.3% for the UK Nationals and 4.8% for Magazines. The circulation revenue
performance reflects the benefit of increased cover prices.
Acquisitions
The acquisitions completed during 2005 are
performing in line with our expectations.
Outlook
Although the Group has experienced a difficult
advertising trading environment over the second half, the benefit of management
initiatives to mitigate the impact on profits gives the Board confidence in an
outturn for the year in line with expectations.
The downward trend in the advertising market continues and there
will be inflationary and other cost pressures in 2006, including higher
newsprint prices. Management is running the business on the assumption that the
advertising environment will continue to be challenging and is therefore taking
action now on the cost base which will deliver further cost savings of up to £15
million in 2006. These savings are expected to partially mitigate the uncertain
revenue outlook and cost increases anticipated in 2006. Exceptional costs of
approximately £12 million associated with these savings will be reported in
2005.
