Stripping out exceptional items, underlying profits on ordinary activities were 15 per cent ahead, at £84.7m. Earlier this month, Mirror announced it had reached a global agreement on the company's pension liabilities, created by the Mirror's previous owner, the late Robert Maxwell. The agreement allowed Mirror Group to release £111m from reserves.
"We have pretty much put that saga behind us," David Montgomery, chief executive, said yesterday.
The operating results were lower than some of the more optimistic City estimates, sending the shares down 5p to close at 135p. Mirror Group's spending on its new television venture, Live TV, was also a cause for concern, some analysts said.
"The results were slightly disappointing, and I am a bit surprised at the [TV] start-up costs," Jonathan Helliwell, media analyst at James Capel, said.
Mirror is spending £30m over three years to launch a new 24-hour cable channel, providing 12 hours of live programming a day.
But other analysts were less critical. "It has been fashionable to tackle Mirror Group on their television investments, but it should be put into perspective. Modest spending on related areas is very sensible," Christine Munro, analyst at Hoare Govett, said.
The company's move into television, spearheaded by former Sun editor Kelvin MacKenzie and the BBC's former head of youth programming Janet Street Porter, is on schedule for the 12 June launch, the company said. Mirror Group intends to provide a national feed to local areas from its £5m Canary Wharf studio, encouraging joint-venture partners to customise the material, add their own, and broadcast via cable to subscribers. The company has already signed an agreement with the Birmingham Post, and intends to seek additional partners among regional newspaper publishers in areas where cable is available.
"We feel there is a substantial profit to be made in local television," Mr MacKenzie said. "Today, it is simply impossible for small and medium- sized companies to advertise on television."
The company's core newspaper operations had a mixed performance. The People turned around sharply, and circulation gains held. Both Scottish newspaper titles, the Scottish Daily Record and the Sunday Mail, saw circulations rise.
The two national titles, the Mirror and the Sunday Mirror, continued to be affected by the national price war. Mr Montgomery said that circulation was "stable."
Overall, margins improved to 25 from 24 per cent, and costs were cut by £14m.
He predicted that Newspaper Publishing, which publishes the Independent and the Independent on Sunday and which is 43 per cent owned by the Mirror Group, would break even by the year-end, provided a price increase from the current 30p could be pushed through. He added that further cost savings would come from printing the titles at the Mirror's presses.Reuse content