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.
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.
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.
The acquisitions completed during 2005 are performing in line with our expectations.
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.