UK

Trinity Mirror Group Pre-Tax Profits Fall 75% After £60m Writedown And Sun On Sunday Launch

14/03/2013 10:02 GMT

Media giant Trinity Mirror Group has reported a 75% decline in pre-tax profits after advertising revenues fell 10.4% year-on-year and circulation revenues dropped by 7.9%.

Some of the blame for the decline was laid at Rupert Murdoch's door, with the group's traditional Sunday papers coming under pressure from Murdoch's rival the Sun on Sunday.

Pre-tax profits fell to £18.9 million in 2012, with revenues plummeting by more than £50m - but Trinity Mirror told the Guardian around £12m of the £54.2m revenue decline was due to the launch of News International's new Sunday tabloid.

However, the profits dive was largely influenced by a writedown of £60m as an impairment charge, after it reviewed the market position of Trinity Mirror's specialist digital classified recruitment and property businesses. Taking that out of the equation, pre-tax profits actually grew from £91.9m to £98.7m.

New chief executive Simon Fox, who took on the role earlier in September, was positive in his remarks for the future of the publisher, saying it was clear the company was a "strong and cash generative business".

"We will be investing £8m during 2013 to deliver our strategic objectives, while ensuring we repay maturing long-term debt over the next 15 months," he said.

"Although the trading environment is expected to remain difficult, the strategic initiatives I have implemented will bring significant benefits with the ambition of delivering sustainable profit growth over the medium term."

Since Fox landed, he has been busy putting the One Trinity Mirror plan into place, designed to encourage greater integration between its national titles such as the Daily Mirror, and its regional newspapers. He's also brought in Donal Smith as a non-executive director - Smith was formerly the chief executive of the Financial Times' Electronic Publishing Division.

Trinity has also saved £25m over the year by cutting structural costs - £10m more than the company's cost reduction target. It plans to save a further £10m in 2013.

Fox has had an interesting career to date - including overseeing two companies which have recently gone into administration; HMV and Comet.

Prior to being HMV's chief executive he worked as managing director of Comet, which he led through its demerger from Kingfisher, and then became chief operating officer at Kesa Electricals with responsibility for Comet in the UK, Kesa's subsidiaries in continental Europe and e-commerce developments.

Despite this, analysts continue to back him; in a report into Fox and Trevor Moore, HMV's most recent chief executive, analysts told the Huffington Post UK that he was not to blame for the retailers' decline, and that "good management would always be beaten by bad markets".