Ad revenues plunge at Trinity Mirror and Johnston Press

LONDON - Trinity Mirror and Johnston Press have reported severe advertising revenue drops for the year so far, with the Daily Mirror publisher down 30% and the Yorkshire Post publisher down 34.4%.

Trinity Mirror's update on trading for the 17 weeks to April 26 showed a 4% decline in circulation revenues and a 13% drop in digital revenues.

Its regionals division, which includes the Liverpool Echo and the Birmingham Post, was hit by a 36% decline in advertising revenues.

The picture in its nationals division was not as bad, down 17%.

The combined effect was to reduce the group's overall revenue by 18%.

The company said it continues to operate within its financial covenants and expects to deliver positive cash flow from operations in 2009.

Trinity's regional rival Johnston Press revealed it has been forced to shelve the attempted sale of its Republic of Ireland titles, which include the Limerick Leader and Leinster Express which were bought near the height of the boom.

Although interest was "considerable" the prices offered were not sufficiently high.

Johnston said that with no money coming in from a sale it is likely to breach a financial covenant with its lenders this year.

It is therefore in continuing talks with all of its lenders about obtaining a relaxation of its covenants and putting in place "more appropriate facilities" extending beyond September 2010.

Shares in the company dropped 25.8% as of 9am to 23p, while Trinity Mirror escaped with just a 3% fall to 72.25p.

Johnston, which also owns the The Scotsman and Scotland on Sunday, expects to have new facilities in place before its half-year announcement in late August.

Net debt stood at £448m at the end of April, down £29m from the start of the year.

Johnston warned that the fall in ad revenues of 34.4% meant that operating profits for the year are likely to be towards the lower end of current market expectations, and that it is likely to make further writedowns of the value of its assets later in the year.

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