Reach Plc Regulatory News (RCH)

Trinity Mirror plc

8 November 2012

INTERIM MANAGEMENT STATEMENT

17 weeks ended 28 October 2012

Trinity Mirror plc is today issuing an Interim Management Statement covering the 17 weeks of trading to 28 October 2012 ('the period') and describing the Group's financial position and performance, updated to the latest practicable date.

Outlook

In what remains a volatile trading environment, we are pleased with the performance of the Group over the period. Furthermore, we are seeing an improvement in advertising revenue trends in November 2012, in particular for our Nationals division. This improvement, coupled with continued tight management of the cost base, gives the Board confidence to expect adjusted operating profit performance for the current year to be broadly in line with 2011 (£104.5 million).

The Group's robust operating profits and strong cash flows during the period enabled a further £19 million reduction in net debt, giving a total reduction of £59 million for the year to date, to £162 million.

The Daily Mirror has outperformed the tabloid market and our other national and regional titles continue to perform broadly in line with the market. However, the challenging trading environment, coupled with tougher comparatives for the second half of 2012 following the closure of the News of the World in July 2011, have contributed to an expected increase in the rate of decline in revenues over the period relative to the first half.

The Group remains on track to deliver structural cost savings of £20 million for the full year.

On 15 October 2012, the Chief Executive announced a change in the operational and management structure of the Group and the creation of 'One Trinity Mirror' to support our longer term strategic development and accelerate the roll out of digital products across our portfolio. A strategic update will be provided with our preliminary results announcement on 14 March 2013.

Following the extensive publicity given to recent claims of alleged wrong doing by Trinity Mirror journalists, the Board can confirm that no such claims have yet been served, nor have any particulars of such claims been provided. As a result, we are today issuing notices requiring claim forms to be served.

Subsequent to the announcement of 29 October 2012 on discussions towards taking a minority interest in a new company comprising the assets of Northcliffe Media and Iliffe News & Media, no offer has been made and there remains nothing further to report at this stage.

Group revenue performance

* Excluding Communicator Corp, which was acquired in December 2011, other revenue increased in the period by 3% (26 weeks to 1 July 2012: 4%) and Group digital revenues in the period decreased by 1% (26 weeks to 1 July 2012: 1%).

Divisional revenue performance

Nationals

As expected, year on year revenue trends, in particular circulation, reflect the stronger performance in the second half of 2011 following the closure of the News of the World in July 2011. Total revenue fell by 12% to £135 million with advertising revenues falling by 9%, circulation revenues falling by 18% and other revenues increasing by 5%.

On an underlying basis, adjusting for the improved circulation revenue and volumes from July 2011, circulation revenues for the period fell by 4% which is marginally better than the decline in the first half. During the period, the circulation volume performance of the Daily Mirror is ahead of market trends and our national Sunday titles are performing marginally ahead of the trends experienced prior to the closure of the News of the World. In a difficult and volatile advertising environment, the Daily Mirror grew advertising volume market share, and our national Sunday titles are performing ahead of the period prior to the closure of the News of the World. Other revenues continue to benefit from increased contract print revenues.

Regionals

Total revenue fell by 9% to £89 million with advertising revenues falling by 13%, circulation revenues falling by 6% and other revenues increasing by 8%. Advertising revenues by category saw display fall by 9% and classified fall by 17% with recruitment falling by 21%, property by 14%, motors by 23% and other classified by 13%. Circulation revenues fell with minimal cover price increases partially mitigating volume declines. Other revenues increased reflecting the inclusion of Communicator Corp and increased contract print revenues.

Digital

Digital revenues grew by 8% for the period with Nationals in line with the prior year and Regionals growing by 9%. Excluding Communicator Corp, which was acquired in December 2011, digital revenues fell by 1%. Growth in display advertising of 13% and a doubling of digital marketing services revenues has been offset by the impact of a 17% decline in the more cyclical classified advertising categories, in particular recruitment.

Financing

Net debt on a contracted basis has fallen during the period as follows:

** assuming that the private placement loan notes and related cross-currency interest rate swaps are not terminated prior to their maturity

*** operating cash flows, capital expenditure and working capital

Net debt on a statutory basis, including the fair value asset of the cross-currency interest rate swaps and converting the US$ denominated private placement loan notes at the period end exchange rate, fell by £19 million to £145 million. The Group cancelled its £135 million bank facility on 22 October 2012 after fully repaying the remainder of the £20 million drawing made in June 2012. The Group now has in place the £110 million bank facility which is committed to August 2015. There were no drawings on the £110 million facility at the period end.

Pensions

In common with most companies, the IAS 19 accounting pension deficit increased during the period due to a fall in long term interest rates. The deficit increased by £73 million from £210 million at the half year to £283 million at the end of September 2012. This reflects an increase in liabilities of £131 million partially offset by an increase in assets values of £58 million.

The IAS 19 pension scheme valuation remains volatile and is not the basis upon which schemes are funded. We continue to fund the pension deficit in accordance with funding schedules agreed with the pension scheme Trustees with payments of £10 million per annum for 2012 to 2014 and £33 million per annum thereafter.

Non-recurring items

Restructuring costs are expected to be around £10 million, £5 million below the previous guidance of £15 million for the year.

Capital expenditure

The Group continued its investment programme in new publishing systems and expects total capital expenditure for the year to be below the previous guidance of £15 million.

Conference call

Trinity Mirror will be holding a conference call this morning for analysts and investors at 8.00 am. The dial-in number is: 020 3140 0712. Confirmation code: 152004#.

Enquiries:

Trinity Mirror plc

Simon Fox, Chief Executive 020 7293 3169

Vijay Vaghela, Group Finance Director 020 7293 3169

FTI Consulting

John Waples 020 7269 7292

Charles Palmer 020 7269 7180

Forward looking statements

Statements contained in this Interim Management Statement are based on the knowledge and information available to the Company's directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward looking statements.