Mirror titles see 21% plunge in advertising sales

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The Independent Online

Trinity Mirror, the newspaper publisher, yesterday shocked the City with news of a savage drop in advertising revenues at its tabloid national newspaper titles following September's terrorist attacks in the US.

The company, which produces The Mirror, Sunday Mirror and Sunday People, saw advertising sales fall 21 per cent in November at the national papers. "The current outlook for December is similar to November," Philip Graf, chief executive, said.

Trinity Mirror said promotional spend on retail, telecoms and personal computer display ads had fallen away. The company suggested that, as budgets are being squeezed, and high street trading had remained buoyant, advertisers had cut short-term advertising, which is used to market special offers and drum up business.

At Trinity Mirror's UK national newspapers, advertising revenues were up 6.2 per cent in August, year-on-year, and sales were even running 2 per cent higher for the first 11 days of September. However, advertising was then pulled altogether for several days, due to the 11 September outrage. October was down 10 per cent and the decline has since accelerated – although classified advertising continued to grow.

Simon Baker, an analyst at SG Securities, said: "It's quite alarming. These are extremely sharp declines. These titles should be more resilient than the broadsheets."

Trinity Mirror was the first national newspaper group to report on November trading. Its shares closed down 14p at 408.5p. The news also saw Daily Mail & General Trust fall 8 per cent to 654p – the company, which publishes the Daily Mail, reports its full-year results on Thursday.

Analysts reacted by shaving up to 5 per cent off Trinity Mirror's estimated profits for this year and some 10 per cent from the 2002 forecasts. The company has said it remains committed to owning the Mirror titles, though it is known to have tried to sell the Sunday People. However, an on-going national newspaper review is looking at costs and additional revenue opportunities at the titles.

Trinity Mirror announced some 800 redundancies across its newspapers earlier this year as it sought to save £35m a year by 2003. It is not thought to be considering further job cuts.

Separately, the Telegraph group confirmed up to 40 editorial staff faced redundancy. Trinity Mirror also announced yesterday it had cut planned expenditure on internet ventures for 2002 from £25m to £10m.

At Trinity Mirror's Scottish "national" titles, led by the Daily Record, advertising in October declined 13 per cent and by 17 per cent in November. The regional publications fared better, with falls of less than 3 per cent for October and November overall, although titles in the South-east suffered more. In the South-east there was a drop in recruitment advertising as employment conditions in the Thames Valley area deteriorated due to the downturn in technology industries.

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