Mirror Profits Edge Ahead, Aims To Beef Up Core Titles

British national newspaper publisher Mirror Group Plc posted a small profit increase yesterday in the face of a large jump in newsprint costs. Pre-tax profit before exceptional items in the first six months of the year rose by 2.9 per cent to £39 million ($60.59 million).

Interim dividend was increased to 1.35p from 1.2p. Initial market reaction was positive, Mirror shares adding seven to 208.5p.

Mirror Group has outperformed other newspaper companies in absorbing a 35 per cent increase in newsprint costs, maintaining high levels of marketing investment in the brands and still producing an increase in profits, chief executive David Montgomery said.

 

The quality of these results confirms Mirror Group as an efficiently run media business now capable of further expansion by deploying its core skills, Montgomery added.

Mirror Group's flagship title is the tabloid Daily Mirror, Britain's second-top selling newspaper. It also has a major stake in The Independent broadsheet and has recently branched out into cable television.

The costs of newsprint "" the material on which newspapers are printed "" rose by £18 million year-on-year but Mirror said it had largely managed to off-set this through higher advertising and circulation revenues. Finance director John Allwood said that cover price rises had helped to boost circulation revenue by £11 million while advertising revenue was up by around five million.

With newsprint price now levelling off, Allwood said that the company would now seek to win new readers with special supplements to its core titles.

The worst of the newsprint price rises is over for the tim being although costs are still a lot higher than they were at the start of last year, said finance director John Allwood. Attention was now switching to moves to add value to newspapers through special supplements and magazines, he added.

Allwood said that the Mirror was seeking to boost its market share with a soccer supplement to its Daily Mirror flagship and a Sunday Mirror TV listings magazine.

The Mirror's Television arm had losses of £4.2 million, stemming from start-up costs at its Live TV local cable service.

Live TV's offbeat style, including programmes such as topless darts, has earned it hefty criticism but Allwood said this was undeserved.

It is now receivable in 1.45 million homes and I think people should stop knocking us and give us a bit more credit, he said.

adding 60-70 main brand companies advertised on Live.

The channel is currently available in central London and Birmingham but launches are planned in the cities of Liverpool and Edinburgh by the end of the year.