Half Yearly Report

RNS Number : 7896U

Trinity Mirror PLC

03 August 2015

3 August 2015

Half-Yearly Financial Report

For the 26 weeks ended 28 June 2015

Key Highlights

Whilst market conditions for print advertising have remained challenging in the first half, we have seen continued growth in digital revenue. With tight management of the cost base, including targeted structural cost savings of £20 million, the Board remains confident that profits for the full year will be in line with expectations.

· Continued strong growth in digital audience and revenue

Digital continued to perform strongly during the first half, with average monthly unique users and average monthly page views ⁽¹⁾ growing by 55% and 59% respectively. Publishing digital revenue grew by 27% with Publishing digital display advertising revenue growing by 44%.

· Adjusted ⁽²⁾ profit before tax down 2.5% to £47.0 million with adjusted earnings per share down 1.3% to 15.3 pence

Despite a decline of 8.7% or £27.6 million in underlying ⁽³⁾ revenue, tight management of the cost base limited the decline in adjusted profit before tax to only 2.5% or £1.2 million with adjusted earnings per share down marginally by 1.3% to 15.3 pence.

The fall in statutory profit before tax primarily reflects the non-recurring gain of £27.5 million in associates in the first half of 2014 and the previously announced increase of £16.0 million (2014: increase of £4 million) in the provision for historical issues in relation to phone hacking. Excluding the year on year impact of these two items, statutory profit before tax increased by £1.1 million.

· Robust balance sheet and financial flexibility with net cash ⁽⁴⁾ position of £23.9 million

A continued focus on delivering strong cash generation together with the benefit of £16.3 million of dividends from associates left the Group with a net cash position of £23.9 million as at 28 June 2015, compared to net debt of £19.3 million at the end of 2014. The strong balance sheet position provides the Group with the financial flexibility to pay dividends and pursue investment opportunities alongside appropriately funding pension scheme liabilities.

· Board approves an interim dividend of 2 pence per ordinary share

The Board has approved an interim dividend for 2015 of 2 pence per ordinary share, payable on 30 November 2015.

· Strategy remains on track

Although the trading environment remains challenging, the Board remains confident that the strategy will deliver growth over the medium term.

Results	Adjusted results ⁽²⁾		Statutory results
	2015	2014	2015	2014
	£m	£m	£m	£m
Revenue - actual	288.5	324.2	288.5	324.2
Revenue - underlying ⁽³⁾	288.5	316.1	-	-
Operating profit	47.9	50.3	19.6	60.0
Profit before tax	47.0	48.2	12.1	50.5
Earnings per share	15.3p	15.5p	4.0p	18.4p

(1) Average monthly unique users and page views for the Publishing division across web, mobile and apps for January to June 2015 versus January to June 2014.

(2) Adjusted items relate to the exclusion of non-recurring items, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the pension administrative expenses. Set out in note 16 is the reconciliation between the statutory results and the adjusted results.

(3) Underlying trends exclude revenues for title closures in the South and the newsprint supply to the Independent and i which ceased at the end of 2014. In the full year 2014, the revenue generated by the titles closed in the South was £4.5 million and from newsprint supply to the Independent and i was £11.1 million and for the half year 2014 was £2.3 million and £5.8 million respectively.

(4) On a contracted basis assuming that the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to maturity.

Commenting on the interim results for 2015, Simon Fox, Chief Executive, Trinity Mirror plc, said:

"The print advertising environment has been more challenging than anticipated in the first half. As a result, whilst continuing to invest in people and technology to drive the ongoing growth in digital audience and revenue, we have taken further action to address our print cost base. The strong cash generative nature of the business has enabled us to continue to strengthen our balance sheet, to the extent that the Group had a net cash position for the first time in its history at the end of the half year. At the same time we continue to make the agreed pension contributions whilst paying an interim dividend of 2 pence per share.

I remain confident that our strategy will deliver sustainable growth in revenue and profit over the medium term despite the difficult print advertising market conditions. The actions we are taking in support of both our print and digital products provide the Board with confidence that profits for 2015 will be in line with expectations."

Enquiries

Trinity Mirror

Simon Fox, Chief Executive 020 7293 3553

Vijay Vaghela, Group Finance Director 020 7293 3553

Brunswick

Mike Smith, Partner 020 7404 5959

Jon Drage, Director 020 7404 5959

Investor presentation

A presentation for analysts will be held at 9.30am on Monday 3 August 2015. The presentation will be live on our website: www.trinitymirror.com at 9.30am and a playback will be available from 2.00pm.

Statutory and adjusted basis

In the Management Report, performance is stated on an adjusted basis to provide a more meaningful comparison of the Group's performance. The adjusted results aim to demonstrate the performance of the Group without the volatility created by restructuring charges, non-recurring items and non-cash accounting items. Set out in note 16 is the reconciliation between the statutory results and the adjusted results.

Forward looking statements

Statements contained in this Half-Yearly Financial Report are based on the knowledge and information available to the Company's directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Half-Yearly Financial Report involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Half-Yearly Financial Report contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward looking statements.

Management Report

Operational Performance

The Group performance for the first half reflects a more challenging print revenue environment. Despite this, continued progress was made on our strategic initiatives.

Group revenue fell by 11.0% with Publishing revenue falling by 9.6% comprising Publishing print down 11.6% and Publishing digital up 26.8%. On an underlying basis, Group revenue fell by 8.7% with Publishing revenue declining by 8.8%, Publishing print declining by 10.9% and Publishing digital growing 26.8%. The Group has experienced continued pressure in print national advertising markets with a slowdown in retail spend, in particular supermarkets, but also reduced spend in telecoms, motors and entertainment categories.

The benefit of structural cost savings of £7 million, the cessation of newsprint supply to the Independent and i of £5.8 million together with cost mitigation actions and lower newsprint prices have contributed to operating costs falling by £32.9 million after increased investment in digital of £3 million. Excluding the change in newsprint supply arrangements to the Independent and i operating costs fell by £27.1 million.

Our share of results of associates increased by £0.4 million to £3.5 million with Local World increasing by £0.3 million to £3.1 million and PA Group increasing by £0.1 million to £0.4 million. Dividends of £16.3 million from associates were received during the first half with £12.0 million from Local World and £4.3 million from PA Group.

The fall in operating costs reduced the impact of lower revenues on operating profit to only £2.4 million or 4.8% and the fall in profit before tax to a marginal £1.2 million or 2.5%. Earnings per share benefited from lower interest costs due to reduced borrowings and from the fall in the rate of corporation tax and fell marginally by 1.3% to 15.3 pence.

Non-recurring items during the first half totalled a charge of £17.4 million. This comprised an increase of £16.0 million in the provision in relation to phone hacking and a £1.4 million charge related to the closure of our print plant in Blantyre, Scotland, including £1.0 million of non-cash fixed asset write offs. Restructuring charges in respect of cost reduction measures of £7.3 million were incurred during the first half.

Statutory operating profit fell by £40.4 million to £19.6 million reflecting the gain of £27.5 million in the first half of 2014 arising on the disposal of MeteoGroup by our associate, PA Group and a net increase of £12.0 million (£16 million charge in first half of 2015 compared to a £4.0 million charge in the first half of 2014) in the charge to the income statement for dealing with historical legal issues in relation to phone hacking. Excluding the year on year impact of these two items profit before tax increased by £1.1 million.

Financial Flexibility

Continued strong cash flows enabled the Group to move to a net cash position, the first time in its history. Cash balances of £92.2 million exceed the outstanding private placement loan notes totalling £68.3 million which are not due for repayment until June 2017. The Group also has no drawings on its £60 million bank facility which is committed until July 2018.

The deficit on the defined benefit pension schemes fell by £10.4 million from £301.2 million to £290.8 million. Net of tax the deficit is £232.6 million. Following the prepayment of £17.0 million in December 2014, the Group has made contributions of £9.9 million in the first half with payments of £10 million expected in the second half. Thereafter, payments to the pension schemes will be £36 million per annum.

The strong and improving balance sheet position provides the Group with financial flexibility to pay dividends and pursue investment opportunities alongside appropriately funding the deficits in the pension schemes.

Dividends

The final dividend for 2014 of 3 pence per share was paid in June 2015, being the first dividend paid by the Group since 2008. The Board has approved an interim dividend for 2015 of 2 pence per share. This will be paid on 30 November 2015 to shareholders on the register on 2 October 2015. This is in line with the dividend policy aligned to the free cash generation of the Group and the investment required to deliver sustainable growth in revenue and profit over the medium term.

Historical Legal Issues

Further to our announcement on 4 June 2015, we confirm that our subsidiary, MGN Limited, is seeking permission to appeal to the Court of Appeal the judgment handed down by Mr Justice Mann on 21 May 2015 in relation to civil claims relating to phone hacking. As we have previously indicated, there remains uncertainty as to how matters will progress. Further updates will be made if there are any significant developments.

Management Report

Outlook

The revenue environment has remained challenging throughout the first half. July revenue trends are better than those experienced during May and June, with total revenue falling by 11% representing an underlying decline of 9%. Although monthly revenue trends are expected to remain volatile for the rest of the year the Board continues to expect profits for the full year to be in line with expectations.

Despite the difficult trading environment, the Board remains confident that the strategy will deliver growth over the medium term. However, in light of this more challenging print advertising environment, the Group reviewed its cost reduction programme and, as previously announced, is now targeting structural cost savings of £20 million for the year, an increase on the £10 million target announced in March 2015. This, coupled with ongoing cost mitigation actions and continued investment to drive digital revenue, will help underpin profits. The increased targeted cost savings will result in restructuring costs increasing by some £5 million to £15 million. We have also reviewed our capital expenditure programme and now anticipate capital expenditure of £10 million, a reduction of £5 million from the previous guidance of £15 million for the year.

Strategic Update

We continue to make progress towards delivering our vision "of being a dynamic and growing media business that is an essential part of our customers' daily lives". Our clear goal to deliver sustainable growth in revenue and profit will be delivered through four key areas of strategic focus:

· Protecting and revitalising our core brands in print;

· Growing our existing brands onto digital delivery channels;

· Continuing our relentless focus on efficiency and cost management; and

· Launching, developing, investing in or acquiring new businesses built around distinctive content or audience.

Key highlights of progress on each area of strategic focus in the first half of the year were:

Protecting and revitalising our core brands in print

We continue to enhance and adapt our portfolio to support circulation volumes and optimise revenues and profits.

· The Daily Mirror outperformed the UK national daily tabloid market for the first half although volume trends have softened compared to 2014. The market for our other titles remains challenging with some individual titles performing well relative to the market.

· The Daily Mirror print advertising volume market share in the UK national daily tabloid market declined from 18.6% to 18.1%, although the share was up against the UK national daily popular tabloid market. The Sunday Mirror, Sunday People and Daily Record all grew advertising volume share while share declined for the Sunday Mail. Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.

· The launch of Britain's biggest free weekly newspaper, the Manchester Weekly News, with a distribution of 265,000 across Greater Manchester. Launched in April, the title replaced six titles previously distributed across Manchester. It has a large proportion of the editorial content and display advertising editionised to three areas: Salford, South Manchester and Tameside.

· The launch of The Visiter, a new free newspaper covering the entire Sefton region, replacing the Formby Times and the Crosby Herald. The title is supported by a new region wide website, www.visiter.co.uk, covering news, sport, local information and What's On.

· On 29 June 2015, the Liverpool Echo was re-launched with a new design and approach to content based on consumer research and a month long consultation with readers who provided feedback to the Editor, Ali Machray via the Twitter hashtag #TellAli, the Echo's website and hundreds of letters. The new design is a significant change in format and layout compared to traditional newspapers and reflects the changing media consumption habits of our readers with less focus on crime, more reporting on things to do in the city and improved coverage of both football clubs in the region.

· The Trinity Mirror Solutions team are delivering thought leadership to our advertising clients in a series of road shows. The visits include live midday Editorial conferences hosted by Trinity Mirror Editor-in-Chief Lloyd Embley. A core part of the road show is to introduce Modal Britain to our advertising clients, Trinity Mirror's mass-market audience which our brands represent.

Management Report continued

Strategic Update continued

Growing our existing brands onto digital delivery channels

· During the first half, average monthly unique users and average monthly pages views grew by 55% and 59% respectively and digital display revenue grew by 44%.

· We have increased our operational investment across our digital activities during the first half by £3 million with a particular focus on content and product.

· Mobile continues to be an increasingly important component of digital revenue growth and we are enhancing our products and advertising formats to take advantage of the ongoing opportunity in this area.

· Building on this momentum, the Mirror has launched a new app with a completely new interface and user experience, giving users faster and more personalised access to the Mirror's news stories. This has been built in-house and marks a step-change in how the Mirror delivers news to its mobile audience. We are now rolling out the app for our other core sites.

· Trinity Mirror Solutions have continued to build capabilities within their Inventions team to fully benefit from the rising interest in content marketing from our advertisers. In the period, they have delivered digital and print creative solutions for clients including Kellogg's, the NHS and Star Wars Day.

Continuing our relentless focus on efficiency and cost management

· A number of initiatives during the first half delivered structural cost savings of £7 million. Key actions in the first half included editorial and advertising changes to produce greater efficiency across a number of titles including our national titles, the closure of our small print plant in Blantyre, Scotland, consolidation of pre press operations into Liverpool for the regional titles and rationalisation of the property portfolio enabling the sublet of space in Glasgow and Cardiff.

· As previously announced, we have increased our structural cost savings target for 2015 by £10 million to £20 million. The increased targeted cost savings will result in restructuring costs increasing by some £5 million to £15 million.

· We have also reviewed our capital expenditure programme and now anticipate capital expenditure of £10 million, a reduction of £5 million from the previously guided £15 million for the year.

Launching, developing, investing in or acquiring new businesses built around distinctive content or audience

· The Group's Sport Media team are the Official Match Day Programme and Pre-Tournament Magazine Licensee for Rugby World Cup 2015 in England. Sport Media will produce and distribute, in print and electronic format, all 48 Match Day Programmes, plus the Official Pre-Tournament Magazine, and will use its reach of leading regional news brands to assist with promoting and marketing the tournament, which kicks off on 18 September 2015.

· We continue to make progress on growing revenue from Pinpoint, our app-based mobile advertising network. Pinpoint enables advertisers to reach a geo-targeted audience of approximately 2 million Trinity Mirror app users through their mobile devices. After launching in the final quarter of 2014 we have served over 160 advertisers including many household names such as Paddy Power, Manchester City Council and Marks and Spencer.

· The Group launched two digital only brands during the first half, 'getreading' and 'Belfast Live'. Both sites are making good progress on building audience.

The Board is confident that its strategy to grow revenue and profit over the medium term remains on track despite the difficult print advertising market conditions. The strong cash position provides significant flexibility for the Group to continue investment in support of its strategy for growth whilst meeting its pension obligations and paying dividends to shareholders.

Management Report

Group Review

Income statement	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Revenue
Publishing	254.6	281.6	254.6	281.6
Print	235.7	266.7	235.7	266.7
Digital	18.9	14.9	18.9	14.9
Printing	24.2	33.8	24.2	33.8
Specialist Digital	7.8	7.2	7.8	7.2
Central	1.9	1.6	1.9	1.6
Revenue	288.5	324.2	288.5	324.2
Costs	(270.9)	(293.5)	(244.1)	(277.0)
Associates	2.0	29.3	3.5	3.1
Operating profit	19.6	60.0	47.9	50.3
Financing	(7.5)	(9.5)	(0.9)	(2.1)
Profit before tax	12.1	50.5	47.0	48.2
Tax	(2.2)	(4.9)	(9.0)	(9.8)
Profit after tax	9.9	45.6	38.0	38.4
Earnings per share	4.0p	18.4p	15.3p	15.5p

The results have been prepared for the 26 weeks ended 28 June 2015 (2015) and the comparative period has been prepared for the 26 weeks ended 29 June 2014 (2014). The results are presented on a statutory and adjusted basis to provide a more meaningful comparison of the Group's performance. Set out in note 16 is the reconciliation between the statutory results and the adjusted results.

Revenue fell by £35.7 million or 11.0% to £288.5 million. Further details on the revenue trends for each division are shown in the Divisional Review.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Labour	(96.6)	(101.1)	(96.6)	(101.1)
Newsprint	(33.2)	(51.9)	(33.2)	(51.9)
Depreciation	(11.7)	(12.2)	(11.7)	(12.2)
Other	(129.4)	(128.3)	(102.6)	(111.8)
Non-recurring items	(17.4)	(4.0)	-	-
Amortisation of other intangible assets	(1.1)	(1.1)	-	-
Pension administrative expenses	(1.0)	(2.1)	-	-
Restructuring charges in respect of cost reduction measures	(7.3)	(9.3)	-	-
Other	(102.6)	(111.8)	(102.6)	(111.8)
Costs	(270.9)	(293.5)	(244.1)	(277.0)

Statutory costs fell by £22.6 million or 7.7% to £270.9 million reflecting the reduced adjusted operating costs which helped offset the more challenging print advertising market. There was also an increase of £16.0 million in the provision (2014: £4.0 million) for dealing with historical legal issues in relation to phone hacking.

Adjusted operating costs fell by £32.9 million or 11.9% to £244.1 million reflecting the benefit of structural cost savings of £7 million, the cessation of newsprint supply to the Independent and i of £5.8 million together with ongoing cost mitigation actions and the benefit from reduced newsprint prices which have more than offset increased investment in digital of £3 million and inflationary increases in non newsprint costs.

Management Report

Group Review continued

The Group has a 21.5% investment in PA Group and a 20.0% investment in Local World, accounted for as associated undertakings.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Result before amortisation and non-recurring items	3.5	3.1	3.5	3.1
Amortisation of other intangible assets	(1.4)	(1.4)	-	-
Non-recurring items	(0.1)	27.6	-	-
Share of results of associates	2.0	29.3	3.5	3.1

The statutory share of the post tax profits from associates fell by £27.3 million to £2.0 million. The 2014 non-recurring items comprised our £27.5 million share of the gain on the disposal by PA Group of its weather forecasting business, MeteoGroup, our £0.4 million share of the profit of MeteoGroup recorded by PA Group up to the date of completion less our £0.3 million share of restructuring costs incurred by PA Group and Local World. Adjusted share of the post tax profit from associates increased by £0.4 million to £3.5 million.

The fall in statutory operating profit of £40.4 million to £19.6 million is driven by our share of the exceptional gain in the first half of 2014 by PA Group on their disposal of MeteoGroup and a net increase of £12.0 million in the charge to the income statement for dealing with historical legal issues in relation to phone hacking. Adjusted operating profit fell by only £2.4 million or 4.8% to £47.9 million with operating margin pre associates increasing by 0.8 percentage points from 14.6% to 15.4%.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Investment revenues	0.3	0.2	0.3	0.2
Pension finance charge	(5.5)	(5.5)	-	-
Finance costs	(2.3)	(4.2)	(1.2)	(2.3)
Interest on bank overdrafts and borrowings	(1.2)	(2.3)	(1.2)	(2.3)
Fair value loss on derivative financial instruments	(2.0)	(5.0)	-	-
Foreign exchange gain on retranslation of borrowings	0.9	3.1	-	-
Financing	(7.5)	(9.5)	(0.9)	(2.1)

Statutory financing costs which include the pension finance charge, the change in derivative financial instruments and the foreign exchange changes on retranslation of foreign currency borrowings fell by £2.0 million to £7.5 million. Adjusted financing costs fell by £1.2 million to £0.9 million reflecting the benefit of the material fall in long term debt and the continued benefit of the low interest rate environment.

The statutory tax charge of £2.2 million (2014: £4.9 million) comprises a current tax charge of £2.6 million (2014: £7.8 million) and a deferred tax credit of £0.4 million (2014: £2.9 million). The effective tax rate is lower than the standard rate of corporation tax as the share of results of associates is post tax. The adjusted tax charge of £9.0 million (2014: £9.8 million) represents 19.3% (2014: 20.3%) of adjusted profit before tax and reflects the benefit of the reduction in the rate of corporation tax from 21.0% to 20.0% on 1 April 2015.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Profit after tax	9.9	45.6	38.0	38.4
Weighted average number of shares (000's)	249,109	247,597	249,109	247,597
Earnings per share	4.0p	18.4p	15.3p	15.5p

Statutory earnings per share fell by 14.4 pence or 78.3% to 4.0 pence and adjusted earnings per share fell marginally by 0.2 pence or 1.3% to 15.3 pence. The increase in the weighted average number of shares year on year reflects the impact of the 2,119,839 share options exercised during the period and the 3,408,484 share options exercised during the prior year partially offset by the 1,391,620 of shares acquired by the Trustees of the Trinity Mirror Employee Benefit Trust in the prior year.

Management Report

Divisional Review

The Group has four operating segments, each of which is a division, that are regularly reviewed for the purposes of allocating resources and assessing performance. The divisional review that follows is presented on an adjusted basis and there is no difference between the operating profit by division and the segment result of each operating segment that is shown in note 3.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the publishing segment and to third parties; Specialist Digital which includes our acquired digital recruitment classified business and our digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates.

The revenue and adjusted operating profit by operating segment is presented below:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Publishing	254.6	281.6	(27.0)	(9.6)
Printing	24.2	33.8	(9.6)	(28.4)
Specialist Digital	7.8	7.2	0.6	8.3
Central	1.9	1.6	0.3	18.8
Revenue	288.5	324.2	(35.7)	(11.0)
Publishing	49.5	53.7	(4.2)	(7.8)
Printing	-	-	-	-
Specialist Digital	1.3	0.8	0.5	62.5
Central	(2.9)	(4.2)	1.3	31.0
Adjusted Operating profit	47.9	50.3	(2.4)	(4.8)

Revenue on an underlying basis is:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Publishing	254.6	279.3	(24.7)	(8.8)
Printing	24.2	28.0	(3.8)	(13.6)
Specialist Digital	7.8	7.2	0.6	8.3
Central	1.9	1.6	0.3	18.8
Revenue	288.5	316.1	(27.6)	(8.7)

The impact on operating profit is immaterial.

Publishing

The revenue and operating profit for the Publishing division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Print	235.7	266.7	(31.0)	(11.6)
Circulation	134.3	142.5	(8.2)	(5.8)
Advertising	87.7	108.3	(20.6)	(19.0)
Other	13.7	15.9	(2.2)	(13.8)
Digital	18.9	14.9	4.0	26.8
Advertising	16.6	13.2	3.4	25.8
Other	2.3	1.7	0.6	35.3
Revenue	254.6	281.6	(27.0)	(9.6)
Costs	(205.1)	(227.9)	22.8	10.0
Operating profit	49.5	53.7	(4.2)	(7.8)
Operating margin	19.4%	19.1%	0.3%	1.6

Revenue fell by 9.6% or £27.0 million to £254.6 million with print revenue declining by 11.6% and digital revenue growing by 26.8%. On an underlying basis revenue fell by 8.8% with print revenue declining by 10.9% and digital revenue growing by 26.8%.

Management Report

Divisional Review continued

Publishing continued

Costs fell by £22.8 million or 10.0% to £205.1 million. This includes structural cost savings, title closures, the continued tight management of the cost base to help mitigate the impact of a challenging print market and the benefit from a fall in newsprint prices. The fall in costs is after increased investment of £3.0 million in digital resources and product development.

Although revenue fell by £27.0 million, operating profit fell by only £4.2 million or 7.8% to £49.5 million with operating margin increasing by 0.3 percentage points from 19.1% to 19.4%.

Print revenue

Circulation revenue fell by 5.8% compared to a decline of 1.2% in the first half of 2014 reflecting the delayed cover price increase of the Daily Mirror Monday to Friday edition which took effect in May whereas this was implemented in January in 2014. In June, the circulation revenues fell by a reduced 5.0%.

The Daily Mirror outperformed the UK national daily tabloid market for the first half with a volume decline of 8.3% compared to an 8.4% decline for the market. The Sunday Mirror and Sunday People declined by 9.8% and 12.8% respectively in a UK national Sunday tabloid market that declined by 10.1%. The Daily Record was down 12.2% against an overall Scottish daily tabloid market decline of 10.3% and the Sunday Mail was down 13.4% against an overall Scottish Sunday tabloid market decline of 11.5%. The market for our regional titles remains difficult with declines of 12.5% for paid for dailies, 14.1% for paid for weeklies and 16.8% for paid for Sundays. Whist we have individual titles performing well relative to the market, our overall trends remain challenging.

Print advertising fell by 19.0% with display lower by 21.1%, classified lower by 14.8% and other categories down by 22.2%. Underlying print advertising fell by 17.5% with display lower by 20.1%, classified lower by 12.2% and other categories down by 22.2%.

The Daily Mirror print advertising volume market share in the UK national daily tabloid market declined from 18.6% to 18.1%, although the share was up against the UK national daily popular tabloid market. The Sunday Mirror and Sunday People have grown share with the Sunday Mirror growing share from 17.5% to 17.7% and the Sunday People growing share from 11.0% to 12.6%. The Daily Record share improved from 15.0% to 15.7% and the Sunday Mail share declined from 28.1% to 27.3%. Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.

Other print revenue fell by 13.8% driven by continued pressure on leaflets, lower waste sales due to lower prices and lower reader offers revenue. Underlying other print revenue fell by 12.9%.

Digital revenue

Digital revenue grew by 26.8% year on year driven by strong growth in our publishing digital audience with average monthly unique users increasing 55% to 95.3 million year on year and with average monthly page views increasing 59% to 698.4 million year on year. In June, monthly unique users were 96.1 million and monthly page views were 759.8 million.

Digital advertising revenue increased by 25.8% year on year. Digital display revenue grew by 44.0% with classified falling marginally by 2.2%. Digital other revenue increased by 35.3% benefiting from the growth in audience and new commercial partnerships.

Printing

The revenue and costs of the Printing division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Contract printing	17.5	19.5	(2.0)	(10.3)
Newsprint supply	5.6	13.0	(7.4)	(56.9)
Other revenue	1.1	1.3	(0.2)	(15.4)
Revenue	24.2	33.8	(9.6)	(28.4)
External costs	(79.2)	(98.8)	19.6	19.8
Publishing division recharge	55.0	65.0	(10.0)	(15.4)
Operating result	-	-	-	-

Management Report

Divisional Review continued

Printing continued

Revenue fell by £9.6 million or 28.4% to £24.2 million. More than half of the decline has been driven by the ending of a newsprint supply agreement to the Independent and i at the end of 2014. The change in the newsprint supply agreement has no impact on profit, but reduces revenue and cost for newsprint supply. In the first half of 2014, newsprint supply revenue from the Independent and i amounted to £5.8 million with annual revenue in 2014 of £11.1 million. On an underlying basis revenue fell by 13.6%.

Revenues from contract printing fell by £2.0 million or 10.3% to £17.5 million. Revenue from newsprint supplied to contract print customers fell due to lower volumes and lower newsprint prices.

External costs fell by £19.6 million or 19.8% to £79.2 million due to cost reduction initiatives, a fall in newsprint prices, the cessation of the newsprint supply contract to the Independent and i and reduction in costs associated with falling contract print revenue. The net cost recharged to the Publishing division was £55.0 million compared to £65.0 million in the prior year. This fall in the recharge reflects the impact of cost savings, the fall in newsprint prices and reduced circulation volumes.

Specialist Digital

The revenue and operating profit of the Specialist Digital division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Advertising	2.5	2.3	0.2	8.7
Other	5.3	4.9	0.4	8.2
Revenue	7.8	7.2	0.6	8.3
Costs	(6.5)	(6.4)	(0.1)	(1.6)
Operating profit	1.3	0.8	0.5	62.5

The Specialist Digital division includes Trinity Mirror Digital Recruitment, our digital classified recruitment vertical and Rippleffect and Communicator, our digital marketing services businesses.

Following the restructuring of the recruitment sites to focus on the three key brands of GAAPweb, SecsintheCity and TotallyLegal, our recruitment revenues have grown by 8.7%. Our marketing services businesses delivered strong revenue growth of 8.2%.

Operating profit increased by 62.5% or £0.5 million.

Central

The revenue and operating loss of the Central division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Revenue	1.9	1.6	0.3	18.8
Costs	(8.3)	(8.9)	0.6	6.7
Associates	3.5	3.1	0.4	12.9
Operating loss	(2.9)	(4.2)	1.3	31.0

The Central division includes revenue and costs not allocated to the operational divisions and the share of results of associates. The result for the period was a loss of £2.9 million compared to a loss of £4.2 million in the first half of 2014.

Revenue primarily relates to rental income from surplus office space at the Group's main office at Canary Wharf which increased as more vacant space was leased to third parties.

Costs fell by £0.6 million from £8.9 million to £8.3 million reflecting cost savings.

The increase in the share of results of associates is driven by Local World increasing by £0.3 million to £3.1 million and PA Group increasing by £0.1 million to £0.4 million.

Management Report

Other Items

Pensions

The Group operates a defined contribution pension scheme with contributions and associated costs charged to operating profit.

The defined benefit pension schemes operated by the Group were closed to future accrual in 2010. The Group now has five defined benefit pension schemes following the buyouts of the five smaller schemes in 2014 and 2015.

The valuations of the remaining schemes as at 31 December 2013 were completed on 9 December 2014. Deficit funding contributions were agreed at £36.2 million for 2015, 2016 and 2017. In addition, the Group has agreed that in respect of dividend payments additional contributions would be paid at 50% of the excess if dividends in 2015 were above 5 pence per share. For 2016 and 2017 the threshold increases in line with the increase in dividends capped at 10% per annum.

In December 2014, the Group prepaid contributions for 2015 and 2016 of £16.5 million and £0.5 million respectively and therefore payments due in 2015 are £19.7 million with £9.9 million paid in the first half. The next valuation date of the schemes is 31 December 2016 and valuations are expected to be finalised by the end of 2017.

The accounting pension deficit fell during the first half by £10.4 million from £301.2 million (£241.0 million net of deferred tax) to £290.8 million (£232.6 million net of deferred tax). This fall in the deficit primarily reflects the contributions paid during the first half with changes in the discount rate, inflation and other assumptions collectively having a minimal impact. The decrease in the accounting pension deficit does not impact the agreed funding commitments.

Cash and borrowings

Cash balances of £92.2 million were held at the reporting date.

Contracted debt, assuming that the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to maturity, was £68.3 million. After deducting the £68.3 million of contracted debt due on the private placement loan notes, the Group had contracted net cash of £23.9 million at the reporting date. The final repayment on the private placement loan notes is £68.3 million, due in June 2017.

Statutory debt, which includes the US$ denominated private placement loan notes at the reporting date exchange rate and the related cross-currency interest rate swaps at fair value, fell by £42.1 million from a net debt of £13.1 million to net cash of £29.0 million. The fair value of the Group's cross-currency interest rate swaps was an asset of £1.2 million and the Sterling amount of the private placement loan notes was £64.4 million.

The Group has had no drawings on its £60 million bank facility which remains committed until July 2018.

Related party transactions

There have been no changes in the nature of related party transactions and no material transactions during the first half.

Principal risks and uncertainties

The principal risks and uncertainties together with mitigating actions that affected the Group during the first half and going forward are described on pages 17 and 18 in the Trinity Mirror plc 2014 Annual Report. The current principal risks and uncertainties are:

· Strategy - the overall strategy or elements of the strategy are inappropriate and the delivery of the strategy is badly executed;

· Revenue loss - faster than anticipated loss of revenue from print and failure to deliver new revenue streams to offset print decline and drive revenue growth;

· Historical legal issues - damage to reputation arising from historical events, direct financial impact from legal claims and distraction of senior management time from delivering the strategy; and

· Pensions - pension deficits grow at such a rate so as to affect the viability of the Group itself or so that the annual funding costs consume a disproportionate level of cash flow.

Management Report

Other Items continued

Going concern

In determining whether the Group's half-yearly financial report can be prepared on a going concern basis, the directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowing facilities and the risks and uncertainties relating to business activities.

Having considered all the factors impacting the Group's businesses, including downside sensitivities, the directors are satisfied that the Group will be able to operate within the terms and conditions of the Group financing facilities for the foreseeable future.

The directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group's half-yearly financial report.

Board changes

Donal Smith retired from the Board at the conclusion of the Annual General Meeting on 7 May 2015.

Statement of directors' responsibilities

The directors are responsible for preparing the half-yearly financial report in accordance with applicable laws and regulations.

The directors confirm to the best of their knowledge:

a) the consolidated financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union; and

b) the half-yearly financial report includes a fair review of the information required by the Financial Conduct Authority's Disclosure and Transparency Rules 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year) and 4.2.8R (disclosure of related parties transactions and changes therein).

By order of the Board of directors

Simon Fox Vijay Vaghela

Chief Executive Group Finance Director

Consolidated income statement

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

	notes	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Revenue	3,4	288.5	324.2	636.3
Cost of sales		(149.9)	(170.4)	(329.9)
Gross profit		138.6	153.8	306.4
Distribution costs		(33.3)	(33.5)	(67.5)
Administrative expenses:
Non-recurring items	5	(17.4)	(4.0)	(12.0)
Amortisation of other intangible assets		(1.1)	(1.1)	(2.2)
Pension administrative expenses	13	(1.0)	(2.1)	(3.2)
Restructuring charges in respect of cost reduction measures		(7.3)	(9.3)	(14.0)
Other administrative expenses		(60.9)	(73.1)	(139.5)
Share of results of associates:
Results before non-recurring items and amortisation		3.5	3.1	6.1
Non-recurring items	5	(0.1)	27.6	27.2
Amortisation of other intangible assets		(1.4)	(1.4)	(2.7)
Operating profit	3	19.6	60.0	98.6
Investment revenues	6	0.3	0.2	0.3
Pension finance charge	13	(5.5)	(5.5)	(11.2)
Finance costs	7	(2.3)	(4.2)	(6.1)
Profit before tax		12.1	50.5	81.6
Tax charge	8	(2.2)	(4.9)	(11.8)
Profit for the period attributable to equity holders of the parent		9.9	45.6	69.8

Statutory earnings per share		2015 Pence	2014 Pence	2014 Pence
Earnings per share - basic	10	4.0	18.4	28.1
Earnings per share - diluted	10	3.9	17.9	27.4

Adjusted* earnings per share		2015 Pence	2014 Pence	2014 Pence
Earnings per share - basic	10	15.3	15.5	32.8
Earnings per share - diluted	10	14.9	15.1	32.0

* Adjusted items relate to the exclusion of non-recurring items, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the pension administrative expenses. Set out in note 16 is the reconciliation between the statutory results and the adjusted results.

Consolidated statement of comprehensive income

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

	notes	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Profit for the period		9.9	45.6	69.8

Items that will not be reclassified to profit and loss:
Actuarial gains/(losses) on defined benefit pension schemes	13	7.0	(12.3)	(52.8)
Tax on actuarial gains/(losses) on defined benefit pension schemes	8	(1.4)	2.5	10.6
Share of items recognised by associates		(3.2)	-	-
Other comprehensive income/(costs) for the period		2.4	(9.8)	(42.2)

Total comprehensive income for the period		12.3	35.8	27.6

Consolidated cash flow statement

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

	notes	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m
Cash flows from operating activities
Cash generated from operations	11	42.0	58.8	90.1
Income tax paid		(4.6)	(9.3)	(17.3)
Net cash inflow from operating activities		37.4	49.5	72.8
Investing activities
Interest received		0.3	0.2	0.3
Dividends received from associates		16.3	-	16.0
Proceeds on disposal of subsidiary undertaking		-	0.9	0.9
Proceeds on disposal of property, plant and equipment		-	0.1	0.2
Purchases of property, plant and equipment		(2.1)	(5.0)	(6.4)
Net cash received from/(used in) investing activities		14.5	(3.8)	11.0
Financing activities
Dividends paid		(7.5)	-	-
Interest paid on borrowings		(1.2)	(2.5)	(3.9)
Repayment of borrowings		-	(44.2)	(44.2)
Purchase of shares for LTIP		-	(2.2)	(2.2)
Net cash used in financing activities		(8.7)	(48.9)	(50.3)

Net increase/(decrease) in cash and cash equivalents		43.2	(3.2)	33.5

Cash and cash equivalents at the beginning of the period	12	49.0	15.5	15.5
Cash and cash equivalents at the end of the period	12	92.2	12.3	49.0

Consolidated statement of changes in equity

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

	Share capital £m	Share premium account £m	Capital redemption reserve £m	Retained earnings and other reserves £m	Total £m

At 28 December 2014 (audited)	(25.8)	(606.7)	(4.4)	42.0	(594.9)

Profit for the period	-	-	-	(9.9)	(9.9)
Other comprehensive income for the period	-	-	-	(2.4)	(2.4)
Total comprehensive income for the period	-	-	-	(12.3)	(12.3)

Credit to equity for equity-settled share-based payments	-	-	-	(0.2)	(0.2)
Dividends paid	-	-	-	7.5	7.5
At 28 June 2015 (unaudited)	(25.8)	(606.7)	(4.4)	37.0	(599.9)

At 29 December 2013 (audited)	(25.8)	(1,121.6)	(4.3)	580.0	(571.7)

Profit for the period	-	-	-	(45.6)	(45.6)
Other comprehensive costs for the period	-	-	-	9.8	9.8
Total comprehensive income for the period	-	-	-	(35.8)	(35.8)

Capital reduction	-	514.8	-	(514.8)	-
Charge to equity for equity-settled share-based payments	-	-	-	3.0	3.0
Purchase of shares for LTIP	-	-	-	2.2	2.2
At 29 June 2014 (unaudited)	(25.8)	(606.8)	(4.3)	34.6	(602.3)

At 29 December 2013 (audited)	(25.8)	(1,121.6)	(4.3)	580.0	(571.7)

Profit for the period	-	-	-	(69.8)	(69.8)
Other comprehensive costs for the period	-	-	-	42.2	42.2
Total comprehensive income for the period	-	-	-	(27.6)	(27.6)

Capital reduction	-	514.8	-	(514.8)	-
Charge to equity for equity-settled share-based payments	-	-	-	2.2	2.2
Purchase of shares for LTIP	-	-	-	2.2	2.2
Reclassification	-	0.1	(0.1)	-	-
At 28 December 2014 (audited)	(25.8)	(606.7)	(4.4)	42.0	(594.9)

Consolidated balance sheet

at 28 June 2015 (29 June 2014 and 28 December 2014)

	notes	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m
Non-current assets
Goodwill		12.0	12.0	12.0
Other intangible assets		667.8	670.0	668.9
Property, plant and equipment		307.1	330.0	317.7
Investment in associates		23.9	56.1	41.4
Retirement benefit assets	13	17.6	12.9	17.8
Deferred tax assets		59.3	56.9	62.1
Derivative financial instruments	12	1.2	-	3.2
		1,088.9	1,137.9	1,123.1
Current assets
Inventories		5.7	6.3	7.0
Trade and other receivables		100.8	110.7	103.3
Cash and cash equivalents	12	92.2	12.3	49.0
		198.7	129.3	159.3
Total assets		1,287.6	1,267.2	1,282.4
Non-current liabilities
Borrowings	12	(64.4)	(59.9)	(65.3)
Retirement benefit obligations	13	(308.4)	(285.0)	(319.0)
Deferred tax liabilities		(177.1)	(178.8)	(178.0)
Provisions	14	(11.8)	(12.5)	(6.9)
Derivative financial instruments		-	(1.5)	-
		(561.7)	(537.7)	(569.2)
Current liabilities
Trade and other payables		(87.9)	(96.9)	(83.0)
Current tax liabilities		(9.3)	(15.2)	(12.0)
Provisions	14	(28.8)	(15.1)	(23.3)
		(126.0)	(127.2)	(118.3)
Total liabilities		(687.7)	(664.9)	(687.5)
Net assets		599.9	602.3	594.9

Equity
Share capital	15	(25.8)	(25.8)	(25.8)
Share premium account	15	(606.7)	(606.8)	(606.7)
Capital redemption reserve	15	(4.4)	(4.3)	(4.4)
Retained earnings and other reserves	15	37.0	34.6	42.0
Total equity attributable to equity holders of the parent		(599.9)	(602.3)	(594.9)

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

1. General information

The financial information in respect of the 52 weeks ended 28 December 2014 does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies and is available at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP and on the Company's website at www.trinitymirror.com. The auditors reported on those accounts: their report was unqualified, did not draw attention to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

The consolidated financial statements for the 26 weeks ended 28 June 2015 do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006 and have not been audited. No statutory accounts for the period have been delivered to the Registrar of Companies. This half-yearly financial report constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules.

The auditors have carried out a review of the consolidated financial statements and their report is set out on page 29.

The consolidated financial statements were approved by the directors on 3 August 2015. This announcement will be made available at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP and on the Company's website at www.trinitymirror.com.

2. Accounting polices

Basis of preparation

The Group's annual consolidated financial statements are prepared in accordance with IFRS as adopted by the European Union. The consolidated financial statements included in this financial report have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union.

Going concern

The directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group's half-yearly financial report.

Changes in accounting policy

Except as noted below, the same accounting policies, presentation and methods of computation are followed in the consolidated financial statements as applied in the Group's latest annual consolidated financial statements.

The Group has adopted the following new interpretations during the current financial period which had no impact on the Group:

· IFRIC 21 (Issued) 'Levies' - effective for periods starting on or after 17 June 2014

At the date of approval of these consolidated financial statements the following amended standard, which has not been applied and when adopted will have no material impact on the Group, were in issue but not yet effective:

· IAS 19 (Amended) 'Employee Benefits' - effective for periods beginning on or after 1 February 2015

At the date of approval of these consolidated financial statements the following new and amended standards which have not been applied and when adopted will have no material impact on the Group, were not yet endorsed by the EU and have no effective date:

· IFRS 9 (Issued) 'Financial Instruments'

· IFRS 10 (Amended) 'Consolidated Financial Statements'

· IFRS 11 (Amended) 'Joint Arrangements'

· IFRS 12 (Amended) 'Disclosure of Interests in Other Entities'

· IFRS 15 (Issued) 'Revenue from Contracts with Customers'

· IAS 1 (Amended) 'Presentation of Financial Statements'

· IAS 16 (Amended) 'Property, Plant and Equipment'

· IAS 27 (Amended) 'Separate Financial Statements'

· IAS 28 (Amended) 'Investments in Associates and Joint Ventures'

· IAS 38 (Amended) 'Intangible Assets'

Annual Improvements are implemented when effective and will have no material impact on the Group.

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

2. Accounting polices (continued)

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Impairment of goodwill and other intangible assets

Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the cash-generating unit to which these have been allocated. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value.

Retirement benefits

Actuarial assumptions adopted and external factors can significantly vary the surplus or deficit of defined benefit pension schemes. Advice is sourced from independent actuaries in selecting suitable assumptions.

Provisions

There is uncertainty as to liabilities arising from the outcome or resolution of the ongoing historical legal issues.

Critical judgements in applying the Group's accounting policies

No critical judgements in applying the Group's accounting policies have been identified in the current or preceding year.

3. Operating segments

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board and chief operating decision maker to allocate resources to the segments and to assess their performance. The Group has four operating segments that are regularly reviewed by the Board and chief operating decision maker.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the publishing segment and to third parties; Specialist Digital which includes our acquired digital specialist classified and our digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates.

The accounting policies used in the preparation of each segment's revenue and results are the same as the Group's accounting policies described in note 2. The Board and chief operating decision maker are not provided with an amount for total assets by segment. The Group's operations are located in the UK and the Group is not subject to significant seasonality during the year.

Segment revenue and results

26 weeks ended 28 June 2015 (unaudited)	Publishing 2015 £m	Printing 2015 £m	Specialist Digital 2015 £m	Central 2015 £m	Total 2015 £m
Revenue
Segment sales	254.6	79.2	8.2	1.9	343.9
Inter-segment sales	-	(55.0)	(0.4)	-	(55.4)
Total revenue	254.6	24.2	7.8	1.9	288.5
Segment result	49.5	-	1.3	(2.9)	47.9
Amortisation of other intangible assets					(2.5)
Pension administrative expenses					(1.0)
Restructuring charges in respect of cost reduction measures					(7.3)
Non-recurring items					(17.5)
Operating profit					19.6
Investment revenues					0.3
Pension finance charge					(5.5)
Finance costs					(2.3)
Profit before tax					12.1
Tax charge					(2.2)
Profit for the period					9.9

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

3. Operating segments (continued)

Segment revenue and results (continued)

26 weeks ended 29 June 2014 (unaudited)	Publishing 2014 £m	Printing 2014 £m	Specialist Digital 2014 £m	Central 2014 £m	Total 2014 £m
Revenue
Segment sales	281.6	98.8	7.8	1.6	389.8
Inter-segment sales	-	(65.0)	(0.6)	-	(65.6)
Total revenue	281.6	33.8	7.2	1.6	324.2
Segment result	53.7	-	0.8	(4.2)	50.3
Amortisation of other intangible assets					(2.5)
Pension administrative expenses					(2.1)
Restructuring charges in respect of cost reduction measures					(9.3)
Non-recurring items					23.6
Operating profit					60.0
Investment revenues					0.2
Pension finance charge					(5.5)
Finance costs					(4.2)
Profit before tax					50.5
Tax charge					(4.9)
Profit for the period					45.6

52 weeks ended 28 December 2014 (audited)	Publishing 2014 £m	Printing 2014 £m	Specialist Digital 2014 £m	Central 2014 £m	Total 2014 £m
Revenue
Segment sales	554.0	188.9	15.8	3.3	762.0
Inter-segment sales	-	(124.4)	(1.3)	-	(125.7)
Total revenue	554.0	64.5	14.5	3.3	636.3
Segment result	113.5	-	2.0	(10.0)	105.5
Amortisation of other intangible assets					(4.9)
Pension administrative expenses					(3.2)
Restructuring charges in respect of cost reduction measures					(14.0)
Non-recurring items					15.2
Operating profit					98.6
Investment revenues					0.3
Pension finance charge					(11.2)
Finance costs					(6.1)
Profit before tax					81.6
Tax charge					(11.8)
Profit for the period					69.8

4. Revenue

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Circulation	134.3	142.5	279.8
Advertising	106.8	123.8	242.5
Printing	24.2	33.8	64.5
Other	23.2	24.1	49.5
Total revenue	288.5	324.2	636.3

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

4. Revenue (continued)

The Group's operations are located primarily in the UK. The Group's revenue by location of customers is set out below:

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

UK and Republic of Ireland	287.1	322.4	632.7
Continental Europe	1.3	1.7	3.5
Rest of World	0.1	0.1	0.1
Total revenue	288.5	324.2	636.3

5. Non-recurring items

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Provision for historical legal issues (a)	(16.0)	(4.0)	(12.0)
Closure of print site (b)	(1.4)	-	-
Non-recurring items included in administrative expenses	(17.4)	(4.0)	(12.0)
Non-recurring items included in share of results of associates (c)	(0.1)	27.6	27.2
Total non-recurring items	(17.5)	23.6	15.2

(a) In the first half of 2015 we made a provision of £16.0 million (26 weeks ended 29 June 2014: £4.0 million and 52 weeks ended 28 December 2014: £12.0 million) to cover the costs of dealing with historical legal issues in relation to phone hacking. It remains uncertain as to how these matters will progress, whether further allegations or claims will be made, and their financial impact. Due to this uncertainty a contingent liability has been highlighted in note 17.

(b) Costs associated with the closure of the printing site in Blantyre, Scotland including the non-cash write off of fixed assets of £1.0 million.

(c) Share of the after tax restructuring costs incurred by PA Group. In the prior year, the £27.2 million gain comprised our £27.5 million share of the gain on disposal by PA Group of its weather forecasting business, MeteoGroup, our £0.4 million share of the profit of MeteoGroup recorded by PA Group up to the date of completion less our £0.7 million share of restructuring costs incurred by PA Group and Local World.

6. Investment revenues

26 weeks ended

28 June

2015 (unaudited)

£m

26 weeks ended

29 June

2014 (unaudited)

£m

52 weeks

ended

28 December

2014

(audited)

£m

Interest income on bank deposits and other interest receipts

0.3

0.2

0.3

7. Finance costs

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Interest on bank overdrafts and borrowings	(1.2)	(2.3)	(3.5)
Total interest expense	(1.2)	(2.3)	(3.5)
Fair value loss on derivative financial instruments	(2.0)	(5.0)	(0.3)
Foreign exchange gain/(loss) on retranslation of borrowings	0.9	3.1	(2.3)
Finance costs	(2.3)	(4.2)	(6.1)

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

8. Tax

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m
Current tax
Corporation tax charge for the period	(3.0)	(7.8)	(14.0)
Prior period adjustment	0.4	-	0.2
Current tax charge	(2.6)	(7.8)	(13.8)
Deferred tax
Deferred tax credit for the period	0.7	2.9	2.1
Prior period adjustment	(0.3)	-	(0.1)
Deferred tax credit	0.4	2.9	2.0
Tax charge	(2.2)	(4.9)	(11.8)

	%	%	%
Reconciliation of tax charge
Standard rate of corporation tax	(20.3)	(21.5)	(21.5)
Tax effect of items that are not deductible in determining taxable profit/(loss)	(2.0)	(0.7)	(1.1)
Prior period adjustment	0.8	-	0.1
Tax effect of share of results of associates	3.3	12.5	8.0
Tax charge rate	(18.2)	(9.7)	(14.5)

The standard rate of corporation tax reduced from 21% to 20% on 1 April 2015. The blended rate for the accounting year is 20.25% being a mix of 21% up to 31 March 2015 and 20% from 1 April 2015 (2014: 21.5% being a mix of 23% up to 31 March 2014 and 21% from 1 April 2014). The current tax liabilities amounted to £9.3 million (29 June 2014: £15.2 million and 28 December 2014: £12.0 million) at the reporting date.

The tax on actuarial gains/(losses) on defined benefit pension schemes taken to the consolidated statement of comprehensive income is a charge of £1.4 million comprising a deferred tax charge of £2.1 million and a current tax credit of £0.7 million (26 weeks ended 29 June 2014: a credit of £2.5 million comprising of a deferred tax credit of £2.5 million and 52 weeks ended 28 December 2014: a credit of £10.6 million comprising a deferred tax credit of £9.8 million and a current tax credit of £0.8 million).

The tax on share-based payments taken to equity is a charge of £0.3 million (26 weeks ended 29 June 2014: a charge of £3.6 million and 52 weeks ended 28 December 2014: a charge of £3.3 million comprising a deferred tax charge of £3.7 million and a current tax credit of £0.4 million).

9. Dividends

	26 weeks ended 28 June 2015 (unaudited) Pence	26 weeks ended 29 June 2014 (unaudited) Pence	52 weeks ended 28 December 2014 (audited) Pence

Dividend approved	2.0	-	-
Dividend paid	3.0	-	-
Dividend proposed	-	-	3.0

The Board has approved an interim dividend for 2015 of 2 pence per share.

On 7 May 2015 the final dividend proposed for 2014 of 3 pence per share was approved by shareholders at the Annual General Meeting and was paid on 4 June 2015. The total dividend payment amounted to £7.5 million.

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

10. Earnings per share

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Profit after tax before adjusted* items	38.0	38.4	81.3
Adjusted* items:
Non-recurring items (after tax)	(13.9)	24.4	17.6
Amortisation of other intangibles (after tax)	(2.3)	(2.3)	(4.5)
Finance costs (after tax)	(0.9)	(1.5)	(2.1)
Restructuring charges (after tax)	(5.8)	(7.3)	(11.0)
Pension charges (after tax)	(5.2)	(6.1)	(11.5)
Profit for the period	9.9	45.6	69.8

Weighted average number of ordinary shares	26 weeks ended 28 June 2015 (unaudited) Thousand	26 weeks ended 29 June 2014 (unaudited) Thousand	52 weeks ended 28 December 2014 (audited) Thousand

Weighted average number of ordinary shares for basic earnings per share	249,109	247,597	248,108
Effect of potential dilutive ordinary shares in respect of share options	5,288	7,214	6,574
Weighted average number of ordinary shares for diluted earnings per share	254,397	254,811	254,682

Basic earnings per share is calculated by dividing profit for the period attributable to equity holders of the parent by the weighted average number of ordinary shares during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares. The weighted average number of potentially dilutive ordinary shares not currently dilutive was 3,067,767 (29 June 2014: 4,312,644 and 28 December 2014: 4,679,307).

Statutory earnings per share	Pence	Pence	Pence

Earnings per share - basic	4.0	18.4	28.1
Earnings per share - diluted	3.9	17.9	27.4

Adjusted* earnings per share	Pence	Pence	Pence

Earnings per share - basic	15.3	15.5	32.8
Earnings per share - diluted	14.9	15.1	32.0

* Adjusted items relate to the exclusion of non-recurring, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the pension administrative expenses. Set out in note 16 is the reconciliation between the statutory results and the adjusted results.

The basic earnings per share impact for each non-recurring item disclosed in note 5 are as follows:

	Pence	Pence	Pence

Provision for historical legal issues in relation to phone hacking	(5.1)	(1.3)	(4.1)
Closure of print site	(0.5)	-	-
Loss per share - non-recurring items included in administrative expenses	(5.6)	(1.3)	(4.1)
Profit per share - non-recurring items included in share of results of associates	-	11.1	11.0
(Loss)/Profit per share - total non-recurring items	(5.6)	9.8	6.9

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

11. Notes to the consolidated cash flow statement

	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Operating profit	19.6	60.0	98.6
Depreciation of property, plant and equipment	11.7	12.2	24.5
Amortisation of other intangible assets	1.1	1.1	2.2
Share of results of associates	(2.0)	(29.3)	(30.6)
Charge/(credit) for share-based payments	0.6	0.5	(0.4)
Write-off of fixed assets	1.0	-	0.9
Pension administrative expenses	1.0	2.1	3.2
Pension deficit funding payments	(9.9)	-	(18.2)
Operating cash flows before movements in working capital	23.1	46.6	80.2
Decrease in inventories	1.3	2.6	1.9
Decrease/(Increase) in receivables	2.5	(1.1)	6.4
Increase in payables	15.1	10.7	1.6
Cash flows from operating activities	42.0	58.8	90.1

12. Cash and borrowings

The statutory net (debt)/cash for the Group is as follows:

	28 December 2014 (audited) £m	Cash flow £m	Derivative financial instruments* £m	Foreign exchange* £m	28 June 2015 (unaudited) £m
Non-current liabilities
Loan notes	(65.3)	-	-	0.9	(64.4)
	(65.3)	-	-	0.9	(64.4)
Non-current assets
Derivative financial instruments	3.2	-	(2.0)	-	1.2
	3.2	-	(2.0)	-	1.2
Current assets
Cash and cash equivalents	49.0	43.2	-	-	92.2
	49.0	43.2	-	-	92.2
Net (debt)/cash	(13.1)	43.2	(2.0)	0.9	29.0

* The impact on the loan notes of translation into Sterling at the settlement date or at the reporting date exchange rate and the impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 7.

The Group has cross-currency interest rate swaps to manage its exposure to foreign exchange movements and interest rate movements on the private placement loan notes. Fair value is calculated using discounted cash flows based upon forward rates available to the Group. The cross-currency interest rate swaps are classed in level two of the financial instruments hierarchy. Level two fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

The contracted net (debt)/cash for the Group, assuming that the private placement loan notes and the cross-currency interest rate swaps are not terminated prior to maturity, is as follows:

	28 December 2014 (audited) £m	Cash flow £m	28 June 2015 (unaudited) £m
Non-current liabilities
Loan notes	(68.3)	-	(68.3)
	(68.3)	-	(68.3)
Current assets
Cash and cash equivalents	49.0	43.2	92.2
	49.0	43.2	92.2
Net (debt)/cash	(19.3)	43.2	23.9

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

12. Cash and borrowings (continued)

The statutory net cash/(debt) reconciles to the contracted net cash/(debt) as follows:

	28 June 2015 (unaudited) £m	28 December 2014 (audited) £m

Statutory net cash/(debt)	29.0	(13.1)
Loan notes at period end exchange rate	64.4	65.3
Loan notes at swapped exchange rate	(68.3)	(68.3)
Cross-currency interest rate swaps	(1.2)	(3.2)
Contracted net cash/(debt)	23.9	(19.3)

13. Retirement benefit schemes

Defined contribution pension schemes

The Group operates the Trinity Mirror Pension Plan (the 'TMPP Scheme'), which is a defined contribution pension scheme for qualifying employees. The assets of the scheme are held separately from those of the Group in funds under the control of Trustees.

The Group implemented the Auto Enrolment legislation from 1 July 2013. The TMPP Scheme has three sections, one for members who elected to join prior to 1 May 2013 which is now closed to new members, one for members who elect to join from 1 May 2013 and one for members from 1 July 2013 who are auto enrolled.

The current service cost charged to the consolidated income statement of £6.6 million (26 weeks ended 29 June 2014: £7.1 million and 52 weeks ended 28 December 2014: £13.9 million) represents contributions payable to the scheme by the Group at rates specified in the scheme rules. Contributions that were due have been paid over to the scheme at all reporting dates.

Defined benefit pension schemes

Background

The defined benefit pension schemes operated by the Group were closed to future accrual in 2010. The Group now has five defined benefit pension schemes following the securing of members' benefits of the five smaller schemes by way of a buy-out with insurance companies without further contributions from the Group. As part of the winding up of these schemes, surplus assets have been transferred to one of the remaining schemes.

The remaining schemes are the Mirror Group Pension Scheme (the 'Old Scheme'), the MGN Past Service Pension Scheme (the 'Past Service Scheme'), the MGN Pension Scheme (the 'MGN Scheme'), the Trinity Retirement Benefit Scheme (the 'Trinity Scheme') and the Midland Independent Newspapers Pension Scheme (the 'MIN Scheme').

The Old Scheme and the Past Service Scheme cover the liabilities for service up to 13 February 1992 for employees and former employees who worked regularly on the production and distribution of Mirror Group's newspapers. The Old Scheme was closed on 13 February 1992 and the Past Service Scheme was established to meet any liabilities which are not satisfied by payments from the Old Scheme and the Maxwell Communications Pension Plan. No contributions have been paid to the Old Scheme since 1992. The disclosures contained in this note in respect of these two schemes are combined (the 'Old Scheme/Past Service Scheme').

Characteristics

The defined benefit pension schemes provide pensions to members which are based on the final salary pension payable normally from age 65 plus surviving spouses or dependents benefits following a member's death. Benefits increase both before and after retirement either in line with statutory requirements or in accordance with the scheme rules. Such increases are either at fixed rates or in line with retail or consumer prices but subject to upper and lower limits. All of the schemes are independent of the Group with assets held independently of the Group. They are governed by Trustees who administer benefits in accordance with the scheme rules and appropriate UK legislation. The schemes each have a professional independent trustee as their chairman with half of the remaining Trustees nominated by the members and half by the Group.

Maturity profile and cash flow

Across the schemes, the invested assets at the reporting date are expected to be sufficient to pay the uninsured benefits due up to 2044, based on the reporting date assumptions. The remaining uninsured benefit payments, payable from 2045, are due to be funded by a combination of asset outperformance and the deficit contributions currently scheduled to be paid by 2025. The liabilities relate 50% to current pensioners and their spouses or dependants and 50% relate to deferred pensioners. The average term from the reporting date to payment of the remaining benefits was around 16 years. Uninsured benefit payments in 2014 were £46 million, projected to rise to an annual peak in 2039 of £83 million and reducing thereafter.

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Funding arrangements

The funding of the Group's schemes is subject to UK pension legislation as well as the guidance and codes of practice issued by the Pensions Regulator. Funding targets are agreed between the Trustees and the Group and are reviewed and revised usually every three years. The funding targets must include a margin for prudence above the expected cost of paying the benefits and so are different to the liability value for IAS 19 purposes. The funding deficits revealed by these triennial valuations are removed over time in accordance with an agreed recovery plan and schedule of contributions for each scheme.

The valuations of the schemes as at 31 December 2013 were completed on 9 December 2014. The valuations showed deficits of £216.0 million for the Old Scheme/Past Service Scheme, £120.7 million for the MGN Scheme, £31.9 million for the Trinity Scheme and £26.7 million for the MIN Scheme. The next valuation date of the schemes is due as at 31 December 2016 with the valuations required to be completed by 31 March 2018.

Deficit funding contributions have been agreed totalling £36.2 million for 2015, 2016 and 2017. Contributions remain at around £36 million from 2018 to 2023 and then reduce to around £21 million for 2024 and 2025 after which contributions are due to cease. The combined deficit is expected to be eradicated by 2027 by a combination of the contributions and asset returns over assumed investment returns.

In addition, the Group has agreed that in respect of dividend payments in 2015, 2016 and 2017 that additional contributions would be paid at 50% of the excess if dividends in 2015 were above 5 pence per share. For 2016 and 2017 the threshold increases in line with the increase in dividends capped at 10% per annum.

During the first half of 2015, contributions paid to the defined benefit pension schemes were £9.9 million (52 weeks ended 28 December 2014: £18.2 million). Payments were £5.4 million (52 weeks ended 28 December 2014: £9.2 million) to the Past Service Scheme, £1.6 million (52 weeks ended 28 December 2014: £3.7 million) to the MGN Scheme, £1.9 million (52 weeks ended 28 December 2014: £2.7 million) to the Trinity Scheme and £1.0 million (52 weeks ended 28 December 2014: £2.6 million) to the MIN Scheme. No payments were made in the first half of 2014. In the second half of 2014, the Group pre-paid deficit funding contributions of £17.0 million (£16.5 million in respect of 2015 and £0.5 million in respect of 2016) and other contributions of £1.2 million.

Risks

Valuations for funding and accounting purposes are based on assumptions about future economic and demographic variables. This results in risk of a volatile valuation deficit and the risk that the ultimate cost of paying benefits is higher than the current assessed liability value.

The main sources of risk are:

· Investment risk: a reduction in asset returns (or assumed future asset returns);

· Inflation risk: an increase in benefit increases (or assumed future increases); and

· Longevity risk: an increase in average life spans (or assumed life expectancy).

These risks are managed by:

· Investing in insured annuity policies: the income from these policies exactly matches the benefit payments for the members covered, removing all of the above risks. At the reporting date the insured annuity policies covered 20% of total liabilities;

· Investing a proportion of assets in government and corporate bonds: changes in the values of the bonds broadly match changes in the values of the uninsured liabilities, reducing the investment risk. At the reporting date this amounted to 36% of assets excluding the insured annuity policies;

· Investing a proportion in equities: with the aim of achieving outperformance and so reducing the deficits over the long term. At the reporting date this amounted to 51% of assets excluding the insured annuity policies; and

· The gradual sale of equities over time to purchase additional annuity policies or bonds: to further reduce risk as the schemes, which are closed to future accrual.

The Group is not exposed to any unusual, entity specific or scheme specific risks. There were no plan amendments, settlements or curtailments in the first half of 2015 or during 2014 which resulted in a pension cost.

Actuarial projections at the 2014 year end showed removal of the accounting deficit by 2023 due to scheduled contributions and asset outperformance over assumed investment returns.

Results

For the purposes of the Group's consolidated financial statements, valuations have been performed in accordance with the requirements of IAS 19 with scheme liabilities calculated using a consistent projected unit valuation method and compared to the estimated value of the scheme assets at 28 June 2015.

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

The assets and liabilities of the schemes as at the reporting date are:

	Old Scheme/Past Service Scheme £m	MGN Scheme £m	Trinity Scheme £m	MIN Scheme £m

Present value of uninsured scheme liabilities	(599.3)	(488.5)	(307.4)	(100.7)
Present value of insured scheme liabilities	(180.6)	-	(78.3)	(104.0)
Total present value of scheme liabilities	(779.9)	(488.5)	(385.7)	(204.7)
Invested and cash assets at fair value	411.4	398.6	325.0	70.1
Value of insurance contracts	180.6	-	78.3	104.0
Total value of scheme assets	592.0	398.6	403.3	174.1
Net scheme (deficit)/surplus	(187.9)	(89.9)	17.6	(30.6)

Based on actuarial advice, the assumptions used in calculating the scheme liabilities and the actuarial value of those liabilities are:

	28 June 2015	29 June 2014	28 December 2014
Financial assumptions (nominal % pa)
Discount rate	3.80	4.25	3.70
Retail price inflation rate	3.20	3.25	3.05
Consumer price inflation rate	2.00	2.25	1.85
Rate of pension increase in deferment	2.00	2.25	1.85
Rate of pension increases in payment	3.90	3.90	3.85
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65	22.0	22.3	22.0
Female currently aged 65	23.9	24.4	23.9
Male currently aged 55	22.8	23.1	22.8
Female currently aged 55	24.8	25.4	24.8

The estimated impact on the IAS 19 liabilities and on the IAS 19 deficit at the reporting date, due to a reasonably possible change in key assumptions over the next year, are set out in the table below:

	Effect on liabilities £m	Effect on deficit £m
Discount rate+/- 0.5% pa	-135/+148	-121/+133
Retail price inflation rate +/- 0.5% pa	+25/-25	+18/-18
Consumer price inflation rate +/- 0.5% pa	+43/-41	+43/-41
Life expectancy at age 65 +/- 1 year	+71/-69	+64/-62

The effect on the deficit is usually lower than the effect on the liabilities due to the matching impact on the value of the insurance contracts held in respect of some of the liabilities. Each assumption variation represents a reasonably possible change in the assumption over the next year but might not represent the actual effect because assumption changes are unlikely to happen in isolation.

The estimated impact of the assumption variations make no allowance for changes in the values of invested assets that would arise if market conditions were to change in order to give rise to the assumption variation. If allowance were made, the estimated impact would likely be lower as the values of invested assets would normally change in the same directions as the liability values.

The amount included in the consolidated income statement, consolidated statement of comprehensive income and consolidated balance sheet arising from the Group's obligations in respect of its defined benefit pension schemes is as follows:

Consolidated income statement	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Pension scheme administrative expenses	(1.0)	(2.1)	(3.2)
Pension scheme finance charge	(5.5)	(5.5)	(11.2)
Defined benefit cost recognised in income statement	(6.5)	(7.6)	(14.4)

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Consolidated statement of comprehensive income	26 weeks ended 28 June 2015 (unaudited) £m	26 weeks ended 29 June 2014 (unaudited) £m	52 weeks ended 28 December 2014 (audited) £m

Actuarial loss due to liability experience	-	(0.3)	(7.9)
Actuarial loss due to liability assumption changes	(1.1)	(22.9)	(90.6)
Total liability actuarial loss	(1.1)	(23.2)	(98.5)
Returns on scheme assets greater than discount rate	8.1	10.9	45.7
Total gain/(loss) recognised in statement of comprehensive income	7.0	(12.3)	(52.8)

Consolidated balance sheet	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

Present value of uninsured scheme liabilities	(1,495.9)	(1,419.8)	(1,492.4)
Present value of insured scheme liabilities	(362.9)	(385.5)	(370.8)
Total present value of scheme liabilities	(1,858.8)	(1,805.3)	(1,863.2)
Invested and cash assets at fair value	1,205.1	1,147.7	1,191.2
Value of insurance contracts	362.9	385.5	370.8
Total value of scheme assets	1,568.0	1,533.2	1,562.0
Net scheme deficit	(290.8)	(272.1)	(301.2)

Non-current assets - retirement benefit assets	17.6	12.9	17.8
Non-current liabilities - retirement benefit obligations	(308.4)	(285.0)	(319.0)
Net scheme deficit	(290.8)	(272.1)	(301.2)

Net scheme deficit included in consolidated balance sheet	(290.8)	(272.1)	(301.2)
Deferred tax included in consolidated balance sheet	58.2	54.4	60.2
Net scheme deficit after deferred tax	(232.6)	(217.7)	(241.0)

Movement in net scheme deficit	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

Opening net scheme deficit	(301.2)	(252.2)	(252.2)
Contributions	9.9	-	18.2
Consolidated income statement	(6.5)	(7.6)	(14.4)
Consolidated statement of comprehensive income	7.0	(12.3)	(52.8)
Closing net scheme deficit	(290.8)	(272.1)	(301.2)

Changes in the present value of scheme liabilities	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

Opening present value of scheme liabilities	(1,863.2)	(1,816.1)	(1,816.1)
Interest cost	(33.8)	(38.4)	(76.5)
Actuarial loss - experience	-	(0.3)	(7.9)
Actuarial (loss)/gain - change to demographic assumptions	(5.3)	-	41.6
Actuarial gain/(loss) - change to financial assumptions	4.2	(22.9)	(132.2)
Benefits paid	39.3	37.2	79.7
Buy-out	-	35.2	48.2
Closing present value of scheme liabilities	(1,858.8)	(1,805.3)	(1,863.2)

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Changes in the fair value of scheme assets	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

Opening fair value of scheme assets	1,562.0	1,563.9	1,563.9
Interest income	28.3	32.9	65.3
Actual return on assets greater than discount rate	8.1	10.9	45.7
Contributions by employer	9.9	-	18.2
Benefits paid	(39.3)	(37.2)	(79.7)
Administrative expenses	(1.0)	(2.1)	(3.2)
Buy-out	-	(35.2)	(48.2)
Closing fair value of scheme assets	1,568.0	1,533.2	1,562.0

Fair value of scheme assets	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

UK equities	196.8	220.7	219.6
US equities	192.0	158.2	189.3
Other overseas equities	224.2	242.4	251.2
Property	19.8	29.8	26.8
Corporate bonds	303.8	273.7	248.7
Fixed interest gilts	62.9	55.6	56.3
Index linked gilts	69.4	72.0	79.0
Cash and other	136.2	95.3	120.3
Invested and cash assets at fair value	1,205.1	1,147.7	1,191.2
Value of insurance contracts	362.9	385.5	370.8
Fair value of scheme assets	1,568.0	1,533.2	1,562.0

All of the scheme assets have quoted prices in active markets. Scheme assets include neither direct investments in the Company's ordinary shares nor any property assets occupied nor other assets used by the Group.

14. Provisions

	Share-based Payments £m	Property £m	Restructuring £m	Other £m	Total £m
At 28 December 2014	(1.4)	(9.0)	(3.6)	(16.2)	(30.2)
Charged to income statement	-	-	(7.3)	(16.4)	(23.7)
Utilisation of provision	0.3	1.6	5.7	5.7	13.3
At 28 June 2015	(1.1)	(7.4)	(5.2)	(26.9)	(40.6)

The provisions have been analysed between current and non-current as follows:

	28 June 2015 (unaudited) £m	29 June 2014 (unaudited) £m	28 December 2014 (audited) £m

Current	(28.8)	(15.1)	(23.3)
Non-current	(11.8)	(12.5)	(6.9)
	(40.6)	(27.6)	(30.2)

The share-based payments provision relates to National Insurance obligations attached to the future crystallisation of awards.

The property provision relates to onerous property leases and future committed costs related to occupied, let and vacant properties. This provision will be utilised over the remaining term of the leases.

The restructuring provision relates to restructuring charges incurred in the delivery of cost reduction measures. This provision is expected to be utilised within the next year.

The other provision relates to legal and other costs relating to historical litigation and other matters.

Notes to the consolidated financial statements

for the 26 weeks ended 28 June 2015 (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014)

15. Share capital and reserves

The share capital comprises 257,690,520 allotted, called-up and fully paid ordinary shares of 10p each. The share premium account reflects the premium on issued ordinary shares. The Group obtained court approval at the end of April 2014 for a reduction in the share premium account of £514.8 million to eliminate the deficit on the Company's profit and loss account reserve. Profit generated by the Company after 30 April 2014 is available for distribution to shareholders.

The capital redemption reserve represents the nominal value of the shares purchased and subsequently cancelled under share buy-back programmes. Cumulative goodwill written off to retained earnings and other reserves in respect of continuing businesses acquired prior to 1998 is £25.9 million (29 June 2014: £25.9 million and 28 December 2014: £25.9 million). On transition to IFRS, the revalued amounts of freehold properties were deemed to be the cost of the asset and the revaluation reserve has been transferred to retained earnings and other reserves.

Shares purchased by the Trinity Mirror Employee Benefit Trust (the 'Trust') are included in retained earnings and other reserves at £8.6 million (29 June 2014: £12.8 million and 28 December 2014: £11.4 million). During the prior year the Trust purchased 1,391,550 shares for a cash consideration of £2.2 million and received a payment of £2.2 million from the Company to purchase these shares. During the period, 2,119,839 shares were released to senior managers relating to grants made in prior years (26 weeks ended 29 June 2014: 2,271,355 and 52 weeks ended 28 December 2014: 3,408,484).

During the period 665,287 awards were granted to senior managers on a discretionary basis under the Long Term Incentive Plan (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014: 935,709). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to the continued employment of the participant and satisfaction of certain performance conditions and are required to be held for a further two years.

During the period 893,873 awards were granted to senior managers on a discretionary basis under the Senior Management Incentive Plan (26 weeks ending 29 June 2014 and 52 weeks ended 28 December 2014: nil). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to the continued employment of the participant and satisfaction of certain performance conditions.

During the period 120,543 awards were granted to senior managers under the Restricted Share Plan (26 weeks ended 29 June 2014 and 52 weeks ended 28 December 2014: 96,245). The awards vest after three years, subject to the continued employment of the participant.

16. Reconciliation of statutory results to adjusted results

26 weeks ended 28 June 2015 (unaudited)	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Pension charges (c) £m	Restructuring charges (d) £m	Finance costs (e) £m	Adjusted results £m
Revenue	288.5	-	-	-	-	-	288.5
Operating profit	19.6	17.5	2.5	1.0	7.3	-	47.9
Profit before tax	12.1	17.5	2.5	6.5	7.3	1.1	47.0
Profit after tax	9.9	13.9	2.3	5.2	5.8	0.9	38.0
Basic EPS (p)	4.0	5.6	0.9	2.1	2.3	0.4	15.3

26 weeks ended 29 June 2014 (unaudited)

Revenue	324.2	-	-	-	-	-	324.2
Operating profit	60.0	(23.6)	2.5	2.1	9.3	-	50.3
Profit before tax	50.5	(23.6)	2.5	7.6	9.3	1.9	48.2
Profit after tax	45.6	(24.4)	2.3	6.1	7.3	1.5	38.4
Basic EPS (p)	18.4	(9.8)	0.9	2.5	2.9	0.6	15.5

52 weeks ended 28 December 2014 (audited)

Revenue	636.3	-	-	-	-	-	636.3
Operating profit	98.6	(15.2)	4.9	3.2	14.0	-	105.5
Profit before tax	81.6	(15.2)	4.9	14.4	14.0	2.6	102.3
Profit after tax	69.8	(17.6)	4.5	11.5	11.0	2.1	81.3
Basic EPS (p)	28.1	(6.9)	1.8	4.6	4.4	0.8	32.8

(a) Non-recurring items relate to the items charged or credited to operating profit as set out in note 5.

(b) Amortisation of the Group's other intangible assets and amortisation included in share of results of associates.

(c) Pension finance charge and pension administrative expenses relating to the defined benefit pension schemes as set out in note 13.

(d) Restructuring charges in respect of cost reduction measures.

(e) Impact of the translation of foreign currency borrowings and fair value changes on derivative financial instruments as set out in note 7.

17. Contingent liabilities

There is potential for further liabilities to arise from the outcome or resolution of the ongoing historical legal issues. Due to the present uncertainty in respect of the nature, timing or measurement of any such liabilities it is too soon to be able to reliably estimate how these matters will proceed and their financial impact.

INDEPENDENT REVIEW REPORT TO TRINITY MIRROR PLC

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 June 2015 which comprises the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated cash flow statement, the consolidated balance sheet and related notes 1 to 17. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the 26 weeks ended 28 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, United Kingdom

3 August 2015

This information is provided by RNS

The company news service from the London Stock Exchange

END

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