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| Trinity Mirror: low costs mean New Day could be profitable this year | Trinity Mirror: low costs mean New Day could be profitable this year |
| (6 months later) | |
| Trinity Mirror has reported a fall in profits and revenues for 2015, but said that the low-cost model behind its newly launched national title, the New Day, means it will be profitable by the end of the year – if the paper can attract enough readers. | Trinity Mirror has reported a fall in profits and revenues for 2015, but said that the low-cost model behind its newly launched national title, the New Day, means it will be profitable by the end of the year – if the paper can attract enough readers. |
| Two million copies of The New Day hit the streets for free on Monday, with the cover price rising to 50p after two weeks, as Trinity Mirror attempts to build a regular readership of about 200,000 copies for the weekday newspaper. | Two million copies of The New Day hit the streets for free on Monday, with the cover price rising to 50p after two weeks, as Trinity Mirror attempts to build a regular readership of about 200,000 copies for the weekday newspaper. |
| Parent company Trinity Mirror, the publisher of titles including the Daily Mirror and Sunday People, said the low-cost operation supporting the New Day, which employs 25 staff, means that if it can lure readers, it will be profitable quickly. | Parent company Trinity Mirror, the publisher of titles including the Daily Mirror and Sunday People, said the low-cost operation supporting the New Day, which employs 25 staff, means that if it can lure readers, it will be profitable quickly. |
| “The launch of our new national newspaper, the New Day, is an exciting and innovative initiative which builds on our confidence in print media,” the company said in Trinity Mirror’s full-year results for 2015. “If successful, the title is expected to move into profit by the end of the year. We will provide regular updates on this investment as we progress through the year.” | “The launch of our new national newspaper, the New Day, is an exciting and innovative initiative which builds on our confidence in print media,” the company said in Trinity Mirror’s full-year results for 2015. “If successful, the title is expected to move into profit by the end of the year. We will provide regular updates on this investment as we progress through the year.” |
| Trinity Mirror’s chief executive, Simon Fox, said the New Day is “an exciting and innovative initiative which we believe fills a gap in the market for a daily newspaper designed to coexist in a digital age. It is in 40,000 retailers and now it is up to the public and I hope they love it”. | Trinity Mirror’s chief executive, Simon Fox, said the New Day is “an exciting and innovative initiative which we believe fills a gap in the market for a daily newspaper designed to coexist in a digital age. It is in 40,000 retailers and now it is up to the public and I hope they love it”. |
| He said the plan is to keep the sales figures as secret as possible, even internally, as it would be “unhelpful” to publish them. “We want to focus on getting the best paper we can out for the first few weeks,” he said. | He said the plan is to keep the sales figures as secret as possible, even internally, as it would be “unhelpful” to publish them. “We want to focus on getting the best paper we can out for the first few weeks,” he said. |
| The plan is to have the New Day officially audited by the Audit Bureau of Circulations, with the first figure to officially be made public in May, covering April’s sales. | The plan is to have the New Day officially audited by the Audit Bureau of Circulations, with the first figure to officially be made public in May, covering April’s sales. |
| Overall, Trinity Mirror reported that pre-tax profits fell by 17.6% from £81.6m to £67.2m last year. | Overall, Trinity Mirror reported that pre-tax profits fell by 17.6% from £81.6m to £67.2m last year. |
| Fox said the fall at a pre-tax level is primarily due to the one-off benefit of an almost £30m boost in 2014 of proceeds from the sale of MeteoGroup by PA Group, in which the publisher is a shareholder. | Fox said the fall at a pre-tax level is primarily due to the one-off benefit of an almost £30m boost in 2014 of proceeds from the sale of MeteoGroup by PA Group, in which the publisher is a shareholder. |
| Trinity Mirror’s results beat City expectations on almost all metrics with adjusted profits, stripping out factors including restructuring and non-recurring charges, up by 5.1% to £107.5m. | Trinity Mirror’s results beat City expectations on almost all metrics with adjusted profits, stripping out factors including restructuring and non-recurring charges, up by 5.1% to £107.5m. |
| Total digital revenue from publishing rose by 32.4% to £42.9m as digital ad revenue leapt by 30.9% to £37.3m. | Total digital revenue from publishing rose by 32.4% to £42.9m as digital ad revenue leapt by 30.9% to £37.3m. |
| Investors were buoyed by the results with Trinity Mirror’s share price up 4.5%, almost 7p, to 159.5p in early trading on Monday. | Investors were buoyed by the results with Trinity Mirror’s share price up 4.5%, almost 7p, to 159.5p in early trading on Monday. |
| The strong year contributed to Fox receiving bumper remuneration of £2.4m last year, up 40% compared with 2014. | The strong year contributed to Fox receiving bumper remuneration of £2.4m last year, up 40% compared with 2014. |
| His payout was boosted by the vesting of £1.62m from a long term investment plan, including a “golden hello” portion from when he joined as chief executive in 2012. | His payout was boosted by the vesting of £1.62m from a long term investment plan, including a “golden hello” portion from when he joined as chief executive in 2012. |
| However, a number of analysts raised concerns about the seemingly inexorable overall decline in revenues among newspaper publishers. | However, a number of analysts raised concerns about the seemingly inexorable overall decline in revenues among newspaper publishers. |
| Trinity Mirror saw total revenues fall 6.8% to £592.7m in 2015 as underlying print advertising revenues fell 16.6% in a tough market for all national newspaper publishers. | Trinity Mirror saw total revenues fall 6.8% to £592.7m in 2015 as underlying print advertising revenues fell 16.6% in a tough market for all national newspaper publishers. |
| “We are [still] in a difficult print environment,” Fox said. “Unfortunately the start to 2016 has not been any better [than last year]. We do think there will be some improvement through the year, with events like the Euros and Olympics, but realistically for print ads it is going to be challenging.” | “We are [still] in a difficult print environment,” Fox said. “Unfortunately the start to 2016 has not been any better [than last year]. We do think there will be some improvement through the year, with events like the Euros and Olympics, but realistically for print ads it is going to be challenging.” |
| The Daily Mail recently reported that it has seen a 20% decline in print revenues at the start of this year. | The Daily Mail recently reported that it has seen a 20% decline in print revenues at the start of this year. |
| Trinity Mirror intends to make about £15m in cost savings this year, with most of that coming from the contiuned integration of local newspaper business Local World, which it acquired in a £220m deal in October. | Trinity Mirror intends to make about £15m in cost savings this year, with most of that coming from the contiuned integration of local newspaper business Local World, which it acquired in a £220m deal in October. |
| Fox also said that Trinity Mirror had pulled out of a £16m deal to on-sell a handful of titles in Cambridge and Hertfordshire, including the Cambridge News, to Edward Iliffe, owner of Iliffe parent Yattendon Group, which had held a 21.3% stake in Local World. | Fox also said that Trinity Mirror had pulled out of a £16m deal to on-sell a handful of titles in Cambridge and Hertfordshire, including the Cambridge News, to Edward Iliffe, owner of Iliffe parent Yattendon Group, which had held a 21.3% stake in Local World. |
| Fox said pulling out of the deal cost Trinity Mirror a £2m break fee. | Fox said pulling out of the deal cost Trinity Mirror a £2m break fee. |
| “We had the right to exercise [the break fee],” he said. “The complexity of separating out the titles was considerable.” | “We had the right to exercise [the break fee],” he said. “The complexity of separating out the titles was considerable.” |
| “I am pleased with the profit growth we delivered in 2015 despite the challenging print environment,” said Fox. “Whilst we expect print markets to remain difficult in 2016, the continued implementation of our strategy gives the board confidence in our performance for the year ahead.” | “I am pleased with the profit growth we delivered in 2015 despite the challenging print environment,” said Fox. “Whilst we expect print markets to remain difficult in 2016, the continued implementation of our strategy gives the board confidence in our performance for the year ahead.” |