Trinity Mirror’s 2008 digital revenues were 27.1 percent higher year-on-year at £43.6 million — but it wasn’t enough to stop the company recording a full-year pre-tax loss of £73.5 million, lower revenues and diminished profits. The company, which says it has suffered a 30 percent dip in advertising revenue in 2009 so far, made profits of £145.2 million — a £40.9 million drop year on year — on revenues £61.2 million lower at £871.1 million. Earnings per share were down to 33.4 pence from 45.5 pence a year ago.
So, no surprises here, there’s yet another cost-cutting programme: on top of the £30 million it saved through 1,200 job losses in 2008, (that’s nine percent of the workforce and puts Trinity £10 million ahead of its 2008 savings target), the company will now save “at least” another £25 million this year.
— Digital growth: Trinity made five percent of its revenues from digital in 2008, compared to 3.7 percent in 2007 and despite its newspaper closures the company launched 200 digital products last year and increased headcount by 120. The group’s overall audience is growing too: average monthly unique users grew 42.1 percent to 11.3 million. Trinity’s regionals made 25 percent higher digital revenues at £38 million while the nationals made £5.6 million, a 43.6 percent rise. That’s progress on the way to achieving the company’s goal of 24 million monthly unique users by 2010 and £100 million of digital revenue by the end of 2011 — but Trinity says “the severity of the economic downturn is expected to slow digital growth in the near term“. So the company doesn’t sound overly optimistic of meeting those goals…
— Advertising: CEO Sly Bailey admits advertising revenues are under “extreme pressure” and the figures back that up. In 2008 the company made £426.5 million in overall ad revenue– down from £520.7 million in 2007. Trinity’s regionals contributed £282.3, a 13.6 percent drop and the nationals £144.2 million, a 9.5 percent drop. And the situation is getting worse: in the first two months of the year advertising is down 30 percent year on year with regionals down 37, and nationals 16 percent. Circulation revenue is expected to fall, while newsprint costs are expected to see a double digit rise this year.
— More sell-offs? Trinity closed 27 titles and sold three south-east newspaper divisions to DMGT last year — expect more of the same this year as the company will be “carefully assessing the best mix of titles… to protect profitability”.
— IT investment: The company spent £50.1 million in net capital expenditure last, with £14.1 million being spent on IT systems — IBM was brought in to consult on new working structures in the company’s newsrooms and this week announced an extension of the ContentWatch CMS technology at its Scottish titles. These investment will continue this year as the technology is rolled out across the group perhaps, inevitably making more job cuts possible.
The new cost cuts will go down well with City investors and analysts, not so well with local journalists, and shareholders won’t cheered by news there will be no final dividend – Trinity having already paid out an interim dividend of 3.2 pence per share. A group-wide pay freeze is also in place and recruitment will be tightly controlled. More after the jump…
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