Trinity Mirror Group shares plunged as much as 30 per cent after it issued a stark profits warning due to double-digit declines in advertising revenues.
“We have seen a marked year on year decline in advertising revenues across our businesses during May and June and this is expected to continue for the remainder of the year,” the company said in a trading update.
Declines in advertising revenues more than doubled in the last nine weeks, falling by 12.6 per cent. However, the group said its online advertising revenues grew 24 per cent in the 26 weeks till the end of June.
Trinity, which publishes the Daily Mirror and 150 regional titles, now expects its full year operating profit to be some 10 per cent lower than expected.
As a result it has cancelled £67m of its £175m share buy back scheme and the dividend is also under review. Landsbanki analyst Andrew Walsh forecast an 11 per cent decline in earnings per share .
“Both the tone of this unscheduled update and uncertainty over the dividend suggests the share will go weaker notwithstanding the fall in recent days,” he said.
Barclays Wealth analyst Amanda Purton said newspapers are likely to be worst hit by the deteriorating market. She said: “This highlights the problems in the UK ad market, with the financial and motor sectors reducing spending. Newspapers are likely to be the worse hit.”
Trinity shares have more than halved in the last six months.