Trinity Mirror in cost-cutting Brexit warning despite strong first-half profits
The publisher of the Daily Mirror newspaper has warned that it could be forced to cut costs as a result of the fallout from Britain's decision to leave the European Union.
Trinity Mirror also said revenues may be hit, with chief executive Simon Fox saying the economy has "taken a massive shock".
He told the Press Association: "If, as a result of Brexit, advertising revenues start waning, we will have to look at our cost base and make more efficiencies in the way we work. That would be all costs, back office, news print, all of it.
"There's no doubt the economy has taken a massive shock, we'll know the full implications in the next 18 months."
He added that Trinity has already taken a hit from the weak pound, which has increased the cost of newsprint.
The firm warned last month that it would take "mitigating actions" to support profits in the wake of the Brexit vote.
The group added on Monday that the referendum outcome has created "increased macroeconomic uncertainty", saying that while the impact is hard to assess, "based on current UK growth forecasts there is a risk that our revenues could be lower than expectations".
"In addition, there are other related factors which affect the group; for example, the impact of a tougher UK business environment on interest rates and therefore long-term bond yields and the deficit in the group's defined benefit pension schemes," the company said.
Trinity made the announcement alongside its first-half results, which saw adjusted pre-tax profit rise 42% to £66.9 million on revenues of £374.7 million.
Like-for-like sales from the firm's digital offering grew 14.4% to £39.7 million, with average monthly page views rising 19% to 770 million. However, revenue from print fell 10.3%, with Trinity flagging "increased challenges" in the advertising market.
Trinity's pension deficit increased by £120.8 million to £426 million, driven by a fall in long-term interest rates.
Revenue was boosted by the acquisition of rival Local World last year, which it snapped up for £187 million and is proving a success for the group.
This is in contrast to Trinity's doomed newspaper launch New Day, which folded after just two months. The venture is thought to have cost the company up to £7 million.
Mr Fox said: "We are already seeing the benefits from our acquisition of Local World last year and continue to tightly manage the cost base across the group.
"Our strategic focus remains to grow digital audience and revenue whilst protecting print revenue and profit."