With Trinity Mirror (LSE: TNI) just about keeping its head above water in the recession, with its full-year 2008 results showing revenue and profits down but digital revenue steadily growing, CEO Sly Bailey took the opportunity to tell investors that 2009 will be one of painful transition to new publishing methods — what she called a new “fitness regime” in newspapers’ survival of the fittest. Bailey said the company was performing “creditably” in the downturn while the problems being faced by Trinity are not of its own making and are being experienced by every media group.
– Jumbo problem: Showing a deft skill for soundbites, Bailey said repairing Trinity was ” the equivalent of repairing and reorganising a jumbo jet while in mid-flight — there is no room for error“. Referring to the multi-million pound investment in the ContentWatch CMS technology at its Birmingham centre and now at its Glasgow newsroom Bailey says Trinity is further ahead in its regional newspaper technological investment and diversification than its rivals.
– Future of regionals: Having strongly doubted those predicting the death of newspapers before, Bailey of course “has confidence in the future of popular newspapers, if they are efficiently managed”. But quite tellingly, asked by an analyst whether Trinity was committed to regional papers, Bailey answered: “We remain committed to local media of which newspapers are a very big part“. Does that suggest online-only regional media for Trinity in the near future? Certainly, Bailey didn’t shirk the question of whether there will be more sell-offs this year: “We can and we do walk away from business if we don’t think it’s right and we will manage our newspapers accordingly.”
– Diversifying revenue: Yes, the ad market is bad but Trinity is keen to point out that 51 percent of its revenues come from other sources, such as contract publishing deals at its printing presses across the country. The company spent £250 million on new full-colour presses last year — and it hopes to more recoup the investment on that over time.
– Regional press write-down: Trinity suffered one-off losses of £226.3 million last year — mainly because of a £190 million impairment charge on the value of the publishing rights for its regional papers in the Midlands and the south of England, reflecting the fall in advertising revenues.
– Outlook: In short, things can only get worse before they get better. “All the indications are that 2009 will be tougher than 2008,” says Bailey, who predicts “declining consumer spend, lower corporate profits (and therefore lower marketing spend) and a rise in unemployment.”
– Digital audience growth: Also released today is the Mirror Group’s ABCe figure for January: Trinity’s national sites including Mirror.co.uk and Dailyrecord.co.uk attracted 6.64 million unique users between them last month, a 64 percent rise year on year compared to Trinity’s internal data for January 2007 (Trinity didn’t join ABCe until April last year). Month on month the figure represents a 25 percent uplift and 56 percent of users were UK-based.