UK national and regional news publisher Trinity Mirror’s digital income for the first half of this year is down by £300,000 to £18.6 million ($28.9 million) compared with last year, even though the news publisher is hailing traffic growth.
Digital revenue would have been worse – down by £1.1 million to £17.5 million – had the group not bought GMG Regional Media.
But Trinity Mirror (LSE: TNI) can nevertheless report more online profit in its news divisions…
— In regionals, digital operating profit is up 23.7 percent to £4.7 million, despite a 6.2 percent sales dip to £15.2 million.
— In nationals, digital sales are down by £100,000 to £2.3 million due to “a fall in Bingo revenues”. No operating profit figure is given.
“While the severity of the downturn continues to impact our key digital verticals of recruitment and property we are still seeing growth in other categories.
“Audience growth remains strong and the Group continues to increase its audience reach with average monthly unique users for the period including the acquisition increasing by 34% year on year and by 16% from the second half of 2009 to reach 19 million in the period.
“We remain committed to growing our digital business and have continued to invest appropriately in new launches and remain focused on achieving our target of 24 million unique users by the end of 2010.”
Group-wide, operating profit is up 25.7 percent to £61.7 million, despite unchanged sales of £382.2 million…
So this is because Trinity Mirror is seeing the benefit of big cost cuts – it has shaved £29 million in half-year costs out of the business and it’s raising the 2010 targeted cuts from £20 million to £25 million…
“In particular, we have continued with our investment in the modernisation of business processes and Group via the continued implementation of the new operating model. New IT systems are enabling us to re-engineer how we publish across editorial, advertising and pre-press.
“This has resulted in a step change in the way content is published across print and digital. Importantly we are not trying to do the same things with fewer people. Instead, the technology enables fundamental changes to the entire publishing process, achieving efficiencies at a significantly lower cost base without detriment to quality.
“As a result the business is already benefiting from successful modernisation with profits increasing.”
But the operating profit would likely have improved from last year as the downturn has ebbed anyway, so whether the group has cut too far is an interesting question.