Financial News

Trinity Mirror (LSE: TNI.L - news) , the newspaper group that owns the Daily Mirror, has announced plans to close nine local newspapers in the Midlands resulting in the loss of up to 120 jobs.

The news come amid a severe downturn in the advertising market and follows the closure of 27 titles over the past year and the sale of four regional newspapers. In this period headcount has been reduced by about 1,200.

The publisher will close a string of weekly papers around Coventry and across the Midlands. Its will also shut its offices in Burton on Trent and Walsall and close its printing presses in the Midlands.

The papers include the Loughborough Trader Xtra, Lichfield Post, Tamworth Times, Burton Trader, Ashby Trader & Echo, Coalville Echo and Walsall Observer newspaper.

It also plans to cease publication of the Bedworth Echo, Rugby Times and two niche publications, the Earlsdon Blog and Farm Ad. Trinity (A053070.KQ - news) has already entered into a period of consultation with its staff.

Georgina Harvey, the Trinity Mirror Regionals managing director, said: "These actions announced today are designed to protect our Midlands businesses. We are seeking volunteers from within affected groups in order to minimise any necessity for compulsory redundancies."

"In addition we are offering the opportunity for staff in other parts of our Midlands businesses not affected by these proposals to volunteer for redundancy."

Local newspapers are facing the threat of the internet which lures advertisers and undermines circulation revenue as well as the most severe advertising recession for decades.

Analysts say the regional newspaper industry will be able to survive only if it obtains sufficient scale by consolidating. If current merger laws are relaxed, this is likely to come about through nil premium mergers, rather than takeovers.

They also believe the "big four" regional newspaper groups - Trinity Mirror, Johnston Press (LSE: JPR.L - news) , Newsquest, owned by Gannett in the US, and Northcliffe, the regional arm of Daily Mail (LSE: DMGT.L - news) & General Trust - should become a big two.

Trinity Mirror is expecting to have a difficult year as advertising fell 30 per cent in January and February and is expected to get worse.

The company has scrapped its final dividend after reporting grim advertising revenues for the first two months of the year and impairment charges from 2008 that pushed the newspaper group into an annual loss.

Sly Bailey, chief executive, has likened the changes being made to its business to counter turbulent conditions to repairing a jumbo jet in mid-flight: "There is no room for error," she said. She hopes to achieve cost savings of £25m in 2009 having achieved £30m last year.

Trinity shares, which have fallen over 25 per cent in the past year, fell 2 per cent, or 1¼p, to 59¼p.