Slide in sales of titles
Record owner expects decline in print income
The company, which has also set aside a further £11.5m to settle claims over the phone hacking scandal, said the expected slide in income follows a decline of 9% in the third quarter and 8% in the first half.
Print advertising and circulation revenue in the fourth quarter is expected to fall by 17% and 5% respectively. Print sales will decline by 10% while digital income grows by 8%.
Classified digital revenues, which are substantially jointly sold with print, continue to remain under pressure but the group said it is expecting strong growth in digital display and transactional revenue of 18%.
In a statement, the company said: “We continue to make good progress against our strategic initiatives whilst supporting profits and delivering strong cash flows. The board is confident that performance for the year will be marginally ahead of expectations, with net debt falling to around £35 million by the year end, significantly better than expectations.”
The group, whose biggest titles are the Daily Mirror and Sunday People, has acquired 2.5 million shares for £2.3 million under the £10 million share repurchase programme announced in August.
It has disposed of its office building in Cardiff, which is only partially occupied by its Media Wales business, for net proceeds of £7.8 million.
“We have made good progress on settling civil claims arising from phone hacking with damages for over 80% of claims now settled.
“However, to maintain momentum in bringing the process to a conclusion it is clear that costs, in particular the claimants’ legal costs, will be higher and this has caused us to increase the provision for dealing with these historic matters by £11.5 million.
“Including this increase the provision remaining at the end of this year is expected to be around £22 million. Although there still remains uncertainty as to how these matters will progress the board remains confident that the exposures arising from these historic events are manageable and do not undermine the delivery of the group’s strategy.”