Trinity Mirror 2012 Profit Down 75% on Lower Revenues and Goodwill Impairment

Newspaper publishing company Trinity Mirror has reported a 75 percent decline in pre-tax profit for 2012, as intense competition from Rupert Murdoch's new Sunday edition lowered the company's revenues.

The publisher of the Daily Mirror, Sunday Mirror and Sunday People reported a pre-tax profit of £18.9m ($28.2m, €21.8m) in 2012, compared to £74.4m in 2011.

The decline in profit for the year was also due to a non-cash goodwill writedown of £60m, following a review of the company's digital classified recruitment and property businesses.

Excluding one-time charges, adjusted pre-tax profit increased to £98.7m from £91.9m.

Revenue for the year declined 7 percent to £706.5m from £760.7m, as the Sunday edition of the Sun, launched in February 2012, reduced the company's sales. The company noted that about £12m of the £54.2m revenue decline in 2012 was due to a fall in sales from the launch the tabloid.

Advertising revenues fell 10.4 percent year-on-year and circulation revenues declined 7.9 percent, according to Trinity Mirror. Meanwhile, digital revenue increased 8.5 percent.

In 2012, the company saved £25m in costs, compared to its yearly target of £15m.

Looking forward, the company noted that its strategic initiatives would deliver sustainable profit growth over the medium term, despite difficult trading conditions.

The company experienced a "slow start" for 2013 in January and February with revenues declining by 13 percent, partly because of the competition from the Sun on Sunday. Further, revenues in March are expected to be down by 7 percent year-on-year.

"We will be investing £8m during 2013 to deliver our strategic objectives whilst ensuring we repay maturing long-term debt over the next 15 months. Over this period our financial flexibility will improve such that we can both meet our pension funding obligations and consider the potential for returning capital to shareholders," Simon Fox, Trinity Mirror chief executive said in a statement.

Trinity Mirror has £98.7m debts repayments due in 2013, while its pension funding deficit increased by £67.6m to £297.7m.