Advertising market hits bottom, says Trinity Mirror chief Sly Bailey
Shares up nearly 13pc as media group beats first-half expectations.
By Amanda Andrews 30 July 2009 • 7:01pm
Sly Bailey, chief executive of Daily Mirror-owner Trinity Mirror, says there are signs that the newspaper advertising market has bottomed.
"It would appear that we are bumping along at the bottom," as the group reported interim figures for the 28 weeks to June 28.
The group beat first-half market expectations thanks to a slower rate of decline in advertising sales in the last month and strict cost management, lifting the shares 12.6pc to 80½p.
Total advertising revenues fell 23pc in July after a 28pc decline in January-June. Trinity Mirror said it expected the improvement to continue for the rest of the year and its full-year performance should be in line with its expectations.
"Management's proven track record of tight cost management combined with the strength of the group's products across media give the Board confidence that the performance for 2009 will be in line with its expectations," the group said in a statement.
National advertising at Trinity Mirror fell 14.4pc in the first half, slowing to 10pc in July. Regional advertising fell 29pc in July, down from 34.5pc in the 28 weeks to June 28. Ms Bailey said that 56pc of group revenue was non-advertising, up from 51pc in the same period of the previous year. The group said that profit before tax was £2.1m, up from a loss of £20.6m in the same period in the previous year.
Trinity Mirror said its pension deficit increased to £275.2m from £206.9m. The company, suspended dividend payments in March. Net debt fell by £13.8m to £370.4m.
Ms Bailey said she believes in the importance of an independently financed television news consortia, but is uncertain whether the Conservatives suggestion that regional news groups provide local television news would work. "I'm less convinced that this is a business model that works," she said.
UBS analyst Alastair Reid said: "We would expect some positive reaction in the share price initially, given the slightly more reassuring tone and improving outlook."
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