Matthew Hook in the Financial Times: Trinity Mirror profits drop ahead of New Day launch

29/02/2016

Trinity Mirror reported sharp declines in revenues and profits for the full year on Monday, the same day the publisher launched the first new standalone UK national newspaper in three decades. The publisher of the Daily Mirror said that its new daily title, called The New Day, was “an exciting and innovative initiative which builds on our confidence in print media”.

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This article first appeared in the Financial Times on 29/02/16.  

However, the group’s financial results highlighted the challenges facing the newspaper industry. Group pre-tax profit for 2015 fell 18 per cent to £67.2m, while revenues declined 7 per cent to £592.7m.

Simon Fox, chief executive, said that he expected print markets would remain “difficult” in 2016 but that there was nonetheless a gap in the market for The New Day.

The paper, which was free from newsagents on Monday but will cost 50p, is aimed primarily at women. The company said it would cover news from an optimistic and politically-neutral perspective.

“We like to think we’re a modern, upbeat newspaper for modern, glass-half-full kind of people,” Alison Phillips, editor of The New Day, wrote in her first article in the 40-page newspaper.

Mr Fox said the company was being careful about costs, and added that “if it’s not profitable at the end of its first year, we will think very hard about whether to continue with it”.

The Daily Mirror, the company’s flagship national tabloid, suffered a 9.2 per cent circulation fall last year, roughly in line with the decline of the wider tabloid market.

Trinity Mirror said group underlying circulation revenue fell 5 per cent in 2015, having declined 2.1 per cent in 2014. There was an even sharper fall in underlying print advertising revenues, which tumbled 16.6 per cent.

Digital revenues increased 32 per cent to £42.9m.

In November, Trinity Mirror acquired rival Local World for £183m, creating the biggest regional newspaper group in the UK. The group said on Monday that Local World’s revenue and adjusted operating profit for the full year 2015 were £208.2m and £41.4m respectively.

Ian Whittaker, analyst at Liberum, said Trinity Mirror’s results were better than expected, with adjusted earnings per share of 33.9p about 6 per cent higher than consensus analyst forecasts. He added that in spite of the relentless decline of print media, the company was in a better position than many had thought.

“We are not suggesting that newspapers are suddenly going to show fantastic growth, but there is still a significant readership that is willing to read them and that brings in advertising money,” he said.

Matthew Hook, managing director of Carat, a media agency, said that The New Day’s positive tone, uncluttered layout and likely audience of “Middle England” readers would make it attractive to advertisers.

“It’s great that someone’s doing something new and brave in the newspaper market,” he said.

Shares in the group opened up 4.8 per cent at 160p on Monday morning.

Matthew also commented on The New Day and the future of print newspapers on The Drum.

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