Trinity Mirror announces profit warning

Trinity Mirror has warned that operating profits will be 10% below the City’s expectations.

The owner of the Daily and Sunday Mirror newspapers blamed the slowdown in the UK economy which is having an impact on advertising revenues.

The company said that the last 2 months had seen a marked drop in advertising revenues and this will possibly continue for the remainder of 2008.

Compared to the same period last year, advertising revenue was down 12% in the 9 weeks to 29 June, with regional titles expected to fall 6% and national titles to fall 6.5%.

Following the news, shares in the media group slumped 28%.

In a statement to the London Stock Exchange, the group said advertising market conditions have declined, reflecting the uncertain outlook for the UK economy.

Month-on-month volatility remains and this could deteriorate as we trade through a very uncertain economic outlook, added the company.

The group also said it would be cancelling £67 million of the £17 million share buy back programme. To date, 35.5 million shares have been acquired at a cost of £108 million.

Its next set of results are due at the end of July.

The warning comes as other media companies reduce their advertising spend, with property and motoring particularly affected.

Group M, the media buying group owned by WPP, has amended its quarterly forecasts lower to reflect that £190 million will be wiped off traditional media advertising budgets this year.

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