Trinity Mirror has increased its cost savings target this year from £15 million to £25 million after reporting operating profit down by 23.7% to £47.1 million, in its half-year financial report for the 26 weeks ended 3 July 2011.
The report states: "Recognising the difficult trading period our businesses face, with a combination of cyclical and structural challenges, our key objectives in the short term are to continue to maximise profit; invest for growth and maintain a high level of cash generation. Today we are increasing our structural cost savings target for 2011 from £15 million to £25 million."
Group revenue fell by 2.9% from £382.2 million to £371.0 million with underlying revenue, excluding the revenue contribution in the period from the acquired GMG Regional Media businesses, which include the Manchestere Evening News, falling by 6.9% from £364.0 million to £339.0 million.
The company says: "Advertising markets have been difficult across the Group reflecting the low levels of consumer and advertiser confidence, with the majority of the Group’s customers reducing spend.
"This has resulted in an underlying advertising revenue decline of 11.1%. The direct implications of public sector spending cuts are clearly evidenced by a fall of 24% in public sector advertising in the period, while the wider implications of the cuts are being felt across all advertising categories."
On the closure of the News of the World, Trinity Mirror says: "In July, following the closure of the News of the World we undertook a range of publishing and marketing activities to maximise our share of the Sunday newspaper market.
"The early results of this activity are highly encouraging with an increase in both volume and revenue of each of our six Sunday newspaper titles, particularly so for our three national titles. The benefits are evident in the improved Group circulation revenues in July which are up 2% year on year with our Nationals up 4%, a significant improvement from the 5.4% decline in Group circulation revenues in the first half."
Sly Bailey, chief executive of Trinity Mirror said: “While the economic environment remains difficult we have undertaken a series of actions to limit the impact on operating profit. The roll out of our technology led operating model continues to deliver efficiencies and today we have announced an increase in our 2011 cost savings target to £25 million.
"At the same time we’re investing across the Group to diversify and grow revenues. Following changes to the national Sunday newspaper market we are highly encouraged by the considerable circulation volume growth seen by our national Sunday titles.
"Our focus on maximising profits in the short term through tight management of costs while investing for growth creates a good backdrop for shareholder value creation over time.”
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