Mirror warns over 10% drop in advertising sales

Trinity Mirror, Britain's largest newspaper publisher, yesterday joined the growing ranks of media groups warning about trading conditions when it reported that advertising sales at its national newspaper division fell 10 per cent in June from year-ago levels.

That bleak message was underscored by a report from brokers ABN Amro saying advertising data for May showed a 10.1 per cent fall across all media sectors from a year earlier. Television was the worst hit with a 13.3 per cent decline, with radio down 12.7 per cent and newspapers down 12.1 per cent.

Ominously, the group, whose titles include The Mirror, Scotland's Daily Record and regional newspapers, said there were no signs of the downturn ending. Philip Graf, Trinity Mirror's chief executive, said: "Current trading conditions remain volatile, with very limited visibility and no signs of a return to the level of advertising revenue growth that was seen in the earlier part of the year."

As a result, the group plans to introduce cost reductions to offset some impact that the current softer trend will have on full-year earnings.

Advertising revenue growth among group regional newspapers, whose titles include the Liverpool Echo, grew an estimated 4.5 per cent for the half, though second-quarter gains were just 2 per cent. A 17 per cent jump in recruitment advertising during the half was responsible for much of the gain.

About half of Trinity Mirror's turnover comes from national titles, 40 per cent from regional papers, with the remainder from on-line and exhibition operations, both of which are for sale.

Trinity Mirror's shares closed down 24.5p at 380.5p, after touching a five-year low in early dealing of 370p.

Analysts reduced full-year pre-tax profit estimates, excluding on-line investment, by 6 per cent to about £180m.