Trinity Mirror, the beleaguered media group which publishes the Daily Mirror and The People, has scrapped its final dividend after pre-tax losses for 2008 came in at £73.5m.
The group made profits of £21m the year before, but the combination of online competition and the slowing economy has affected advertising and circulation. Advertising revenues dropped by 18 per cent to £427m. Sales of the group's regional newspapers were down 11 per cent, and sales of its national titles were down by 2.4 per cent compared with 2007.
This year is looking even worse. Circulation is holding up better, with sales down just 4 per cent in January and February. But advertising is down by 37 per cent in the regionals and 16 per cent in nationals, and Trinity is predicting advertising sales will continue to fall throughout the year. Dividend payments will not resume until the market has improved.
Trinity is ferociously cutting costs. It closed 27 titles and sold four regional papers last year, as well as cutting 800 jobs and freezing pay. Executives were not paid bonuses and Sly Bailey, the chief executive, saw her annual salary drop by more than half to £757,000. But there is more to come. Another 400 positions are expected to go this year, alongside a continuing pay freeze and restricted recruitment policy. The group also plans to cut the number of pages in its papers, to offset a double-digit rise in print prices.
Ms Bailey said: "Trinity Mirror has performed creditably in very difficult trading conditions. While advertising revenues were under extreme pressure we delivered full-year results ahead of market forecasts."
The company has high hopes for its diversification strategy. Trinity launched more than 200 new digital products in 2008 and the average number of unique users by month grew by 42 per to 11.3 million across the group as a whole. Total digital revenues rose by 27 per cent to £43.6m, accounting for 5 per cent of overall revenues.
"In spite of the downturn, I am a firm believer that careful management of our portfolio of strong print and online brands will enable us to navigate our way through the challenging market conditions as we make the transition to a new lower-cost multi- platform business model," Ms Bailey said. "With our proven track record of delivering substantial cost savings and driving efficiencies in our businesses, we remain well-positioned to manage our way through these uncertain times for the UK economy."
Trinity's pension deficit rose by more than 65 per cent to £207m in 2008 as asset values plummeted, and the group ended the year with net debt of £349m, up £100m on 2007.
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