Trinity Mirror, the UK's largest newspaper publisher, is today issuing a trading update in respect of the second half of the financial year ending 29th December 2002. This statement is being issued ahead of the Company's preliminary results on 27th February 2003.
Significant progress has been made during the past five months in the implementation of our strategies for the key businesses and in delivering the targeted cost savings and revenue enhancements for the financial year ending 29th December 2002.
Advertising revenues across the group were down 2.5% year-on-year in the third quarter but are 0.3% up in the first two months of the fourth quarter. We continue to experience something of a north/south divide in advertising performance.
The clear strategic approach to our main businesses - together with vigorous cost control, further reduction in digital media investment, lower interest rates and our strong cash flows - has limited the impact that the difficult advertising and economic conditions might otherwise have had on our underlying performance, which remains in line with our expectations.
The "from Biggest to Best" strategy for our regional newspaper division continues at considerable pace and is delivering revenue and cost based performance improvements.
There have been encouraging signs of advertising growth for our regional newspapers over the past two months. Furthermore, a small improvement over October and November is expected in December.
October saw overall advertising growth year on year of 1.2%* with recruitment up by 2.6%. Revenues also grew marginally by 0.6% in November with recruitment up by 1.4%. This compares to a year on year fall of 2.4% in the third quarter and 2.5% in the first half. Our businesses in the North, South Wales, Ireland and Scotland continue to do well and act as a balance to the tougher West Midlands and Southern markets. Although trading conditions in London and the South East remain difficult, there are signs of improvement in this area.
Circulation revenues are down 1.5% in the period July to November with volume decreases partially offset by cover price increases.
Our integrated marketing strategy for the two Mirror titles to sharpen the brand and over time to increase frequency of purchase continues to make progress.
The latest ABC circulation figures for the Daily Mirror show a headline growth in November of 1.9% year on year and 2.5% compared to October. Excluding sampling, the November year on year growth is 3.4%, primarily as a result of the Paul Burrell exclusive series of interviews, illustrating the importance of the strong Mirror brand. The Daily Mirror circulation (excluding sampling) declined 2.3% year on year in the period July to November compared to a decline of 1.9% in the first six months. However the second half comparison is adversely impacted by the strong performance in 2001 following the events of September 11.
Our three national newspaper titles saw advertising grow in the third quarter year-on-year by 0.5%, despite a challenging Sunday market. October advertising revenues declined by 1.7% but this has been followed by growth of 5.7% in November. The performance continues to be driven by strong retail advertising with third quarter growth in this sector of 38.3% and in excess of 20% growth during October and November. December is expected to deliver overall advertising performance ahead of November.
The Scottish Nationals advertising performance reflects the benefits of the advertising improvement strategy with revenues falling year on year by only 0.1% in the third quarter and October and November delivering growth of 4.6% and 4.1% respectively. This improving trend is expected to continue into December. During the period July to November the Daily Record's and the Sunday Mail's circulation in Scotland declined year on year by 7.4% and 3.9% respectively compared to declines of 4.5% and 3.5% respectively for the first half.
* all advertising and circulation results for the Regional newspaper titles are shown on a like for like basis excluding the results of Post Publications Limited and Ethnic Media Group Limited which were disposed of in June 2002 and advertising revenues further exclude the results of the Metro titles