Last checked at 10 May 2012 07:00
Trinity Mirror plc
10 May 2012
INTERIM MANAGEMENT STATEMENT
17 weeks ended 29 April 2012
Trinity Mirror plc is today issuing an Interim Management Statement covering the 17 weeks of trading to 29 April 2012 ('the period') and describing the Group's financial position and performance, updated to the latest practicable date.
Outlook
We remain on track with the transformation of our publishing capabilities to support the development of a multi-platform media business to be completed by the end of 2013. We are also making good progress with the digital investments announced at our preliminary results.
Our investment in the daily deal markets with a new brand, happli, is progressing well and we are now live in eight cities and plan to launch in a number of other cities by the end of 2012. Subscriber numbers are already over 100,000 and we expect further growth over the remainder of the year.
Strong cash flows enabled net debt reduction of £24 million to £197 million during the period and we anticipate a further decline in net debt for the remainder of the year. We anticipate repaying the £70 million of US Private Placement loan notes maturing in June 2012 through a combination of cash balances held at the period end, further cash generated during May and June and a drawing on the Group's existing bank facility.
The trading environment is expected to remain challenging for the remainder of the year with month on month volatility in revenue trends. Nevertheless, the benefit of focused management of the business coupled with delivery of at least £15 million of structural cost savings will support profitability during 2012.
Group revenue performance
Jan/Feb % | Mar/Apr % | 17 weeks to 29 April 2012* % | |
Total revenue | (1) | (6) | (4) |
Advertising revenue | (12) | (11) | (11) |
Circulation revenue | 7 | (4) | 1 |
Other revenue | 12 | 3 | 7 |
Group digital revenues | 8 | 10 | 9 |
* Excluding Communicator Corp which was acquired in December 2011 other revenues increased by 3% and Group digital revenues were in line with 2011.
Early indications are that revenues in May are expected to decline by 5% with advertising revenues falling by 10%, circulation revenues falling by 4% and other revenues increasing by 10%. Digital revenues are expected to increase ahead of the growth achieved in the period.
Divisional revenue performance
Nationals
Total revenue fell by 1% for the period with an increase of 3% in January and February and a decrease of 5% in March and April. Circulation revenues grew by 3% with an increase of 10% in January and February and a decline of 3% in March and April following the launch of a competitive Sunday newspaper at the end of February. Advertising revenues declined by 10% and we broadly continued to maintain advertising volume market share for our national newspapers. Other revenues increased by 4% reflecting increased contract print revenues.
Digital revenues grew by 24% for the period reflecting the relaunch of MirrorOnline and a more stable performance for bingo revenues.
Regionals
Total revenue fell by 7% for the period with a 7% decline in January and February as well as in March and April. Advertising revenues fell by 12% with a decline of 13% in January and February improving to a decline of 11% in March and April. By category display fell by 11% and classified fell by 13% with recruitment falling by 12%, property by 10%, motors by 24% and other classified by 13%. Circulation revenues fell by 4% with minimal cover price increases partially mitigating volume declines. Other revenues increased by 12% reflecting increased contract print revenues and the inclusion of Communicator Corp.
Digital revenues grew by 7% for the period including the acquisition of Communicator Corp; declining by 5% if excluded. Digital display advertising grew by 6% and digital marketing services revenues grew by 28% both being offset by the impact of a 13% decline in the more cyclical classified advertising.
Financing
Net debt on a contracted basis has fallen during the period as follows:
£m | |
Net debt as at 1 January 2012* | 221 |
Corporation tax payments | 8 |
Pensions deficit funding payments | 4 |
Interest payments | 1 |
Other net cash inflows** | (37) |
Net debt as at 29 April 2012* | 197 |
* 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 £23 million to £178 million.
The Group has no drawings on the £135 million bank facility which is committed until June 2013. The Group also has in place a £110 million bank facility which is committed to August 2015 from the earlier of June 2013 or the termination of the £135 million bank facility.
Pensions
Our quarterly update of the IAS 19 accounting pension deficit indicated a fall in the deficit by £54 million from £230 million at the end of 2011 to £176 million at the end of March 2012.
The decline has been driven by an improvement in assets values reflecting a marginal improvement in equity values and a fall in liabilities driven by a marginal increase in the discount rate over the first quarter.
Non-recurring items
Restructuring costs in connection with the delivery of cost reduction measures and the implementation of the new operating model for the Group are expected to be around £15 million for the year.
Capital expenditure
The Group continued its investment programme in new publishing systems and expects total capital expenditure of around £15 million for 2012, in line with previous guidance.
Conference call
Trinity Mirror will be holding a conference call this morning for analysts and investors at 8.00am. The dial-in number is: 020 3140 0712. Confirmation code: 800488#.
Enquiries:
Trinity Mirror plc
Vijay Vaghela, Group Finance Director 020 7293 3000
Nick Fullagar, Director Corporate Communications 020 7293 3622
FTI Consulting
John Waples 020 7269 7292
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.