Interim Management Statement

RNS Number : 3805C

Trinity Mirror PLC

12 November 2009

 



Trinity Mirror plc

12 November 2009

TRINITY MIRROR PLC

INTERIM MANAGEMENT STATEMENT

17 weeks ending 25th October 2009

Trinity Mirror plc is today issuing an Interim Management Statement covering the 17 weeks of trading to 25th October 2009 and describes the Group's financial position and performance, updated to the latest practicable date.

Outlook

The Board remains confident that performance for the year will be in line with expectations. Although trading conditions have remained difficult since the half year with continued pressure on revenues from the poor economic environment we have seen an improvement in the rate of decline in revenues. The Board takes comfort from the positive effects of the range of management initiatives which are driving efficiencies through the re-engineering of core business processes and so further reducing costs. As a result the Group remains on track to deliver structural cost savings of £35 million with the absolute cost base falling by at least £65 million for the full year. 

The Group remains cash generative and net debt has fallen by a further £16 million during the period.

Whilst the trading environment will continue to be challenging over the remainder of the year and into 2010, we anticipate that the rate of decline in revenues will continue to improve. This coupled with ongoing management initiatives to drive revenues and reduce costs will support profitability.   

Revenue performance

Revenue performance in the 17 weeks to 25th October 2009 ('the period'), 26 weeks to 28th June 2009 ('the first half') and 43 weeks to 25th October 2009 ('the year to date') was as follows:

Year on Year Change
		26 weeks to 28th June  2009	17 weeks to 25th  October 2009	43 weeks  to 25th  October  2009
		%	%	%
Group revenue		(17)	(12)	(15)
Advertising		(28)	(20)	(25)
Circulation		(4)	(3)	(4)
Other		(10)	(8)	(9)
Group digital revenue*		(17)	(22)	(19)

*    Digital revenues are included in advertising and other revenues.

Group revenues for the period fell by 12% reflecting an improvement of 5 percentage points from the declines of 17% experienced in the first half. The improving revenue trends reflect the benefit of weaker comparatives.   

Group advertising revenues in the year to date have fallen by 25% reflecting a decline of 28% for the first half and 20% for the period.

For our Regionals division advertising revenues have fallen by 32% year to date reflecting a decline of 35% for the first half and an improved rate of decline of 27% for the period. By category,  display  is down 13%, recruitment is down 48%, property is down 34%, motors is down 32% and other classified categories were down 20% in the period. 

For our Nationals division advertising revenues have fallen by 11% year to date reflecting a decline of 14% for the first half and a material improvement in the rate of decline to only 6% for the period. 

Group circulation revenues have fallen by 4% year to date with a decline of 8% for the Regionals and 3% for the Nationals. Circulation revenues in the period fell by 7% for the Regionals and 2% for the Nationals.  

Other Group revenues have fallen by 9% year to date, reflecting a decline of 10% for the first half and a decline of 8% for the period.

Group digital revenues have fallen by 19% year to date with a decline of 19% for the Regionals  and 17% for the Nationals. As market conditions remained difficult in the second half we have seen an increase in the rate of decline in digital revenues which fell by 22% for the period  compared  to a decline of 17% for the first half. The declines in digital revenues reflect the cyclical impact on the core recruitment and property revenues. Excluding recruitment and property revenues digital revenues grew by 12% in the period and 26% year to date. 

Early indications for November are that advertising revenues for the Nationals will fall by around 5% and for the Regionals by around 22%. Group circulation revenues are expected to fall by around 1% for November.

Non-recurring items

Restructuring costs in connection with the delivery of cost reduction measures and implementation of the new operating model for the Group are estimated to be around £20 million for the full year in line with the previous guidance. In addition, as reported in the Interim results there is a £7.0 million  impairment of a receivable from a major wholesaler which is in administration and a £2.4 million loss on the disposal of a business, partially offset by a £5.1 million profit on the disposal of land and buildings.

Capital expenditure

Capital expenditure is forecast to be some £5 million below the £25 million previously announced to the market. 

Financing

Net debt, on a contracted basis, assuming that the private placement loan notes and the cross-currency interest rate swaps are not terminated prior to maturity, has fallen during the period as follows:

	£m
Net debt as at 28th June 2009*	370
Corporation tax payments	4
Other net cash inflows**	(20)
Net debt as at 25th October 2009	354

*      assuming that the US$ private placement loan notes and related cross currency interest rate swaps are not 
        terminated prior to their maturity 

**     operating cash flows, capex, working capital and interest 

As at 25^th October 2009 the Group had no drawings on its £178.5 million bank facility. During the period the Group repaid, ahead of their due date, all outstanding finance lease commitments from surplus cash balances. 

The fair value liability of the Group's cross currency interest rates swaps used to swap the principal and interest payments on the Group's US$ private placement loan notes was £1.5 million at 25th October 2009 (28th June 2009: £11.2 million).  

Net debt, on a statutory basis, including the fair value liability of the cross-currency interest rate swaps and converting the US$ denominated private placement loan notes at the period end exchange rate, fell by £24 million to £324 million. 

Net debt is expected to fall marginally over the remainder of 2009 after interest payments in relation to the US$ private placement loan notes. The Group continues to operate comfortably within its financial covenants. 

Pensions

On the 9^th November 2009 the Group entered into consultation with affected staff over its proposal to close the Group's defined benefit pension schemes to future accrual.

Portfolio

We continue to actively manage our portfolio to drive audience reach, revenue and profitability. 

Against those objectives we have launched a number of new on-line brands including Mirrorfootball.co.uk and 3am.co.uk both of which have been well received by the market. These launches have contributed to our continued increase in audience reach with average monthly  unique users during the period increasing by 40% year on year to 17 million and by 15% from the first half of 2009.  

The challenging advertising market has necessitated the closure of 4 regional  newspaper  titles  since the half year. This is in addition to 22 regional newspaper titles closed in the first half. We have also announced publishing changes to format and frequency to a number of regional titles to better serve the needs of readers and advertisers.  

Conference call

Trinity Mirror will be holding a conference call this morning for analysts and investors at 8.15am.  For dial in details please contact Nick Fullagar, Director Corporate Communications on 020 7293 3622 or [e-mail].

Enquiries

Trinity Mirror plc

Vijay Vaghela, Group Finance Director                                            020 7293 3000

Nick Fullagar, Director Corporate Communications                        020 7293 3622

This Interim Management Statement is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Interim Management Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this Interim Management Statement 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 Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement 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.

 

END

 

 

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