Soured by the arrest of four Mirror journalists in phone-hacking investigations dating back to 2003, Trinity Mirror (TNI) shares fell 15 per cent after these results. But, behind the front-page story of falling advertising and circulation revenues, there is good news - not least improved adjusted operating profits, reduced net debt and a strategy to drive the business forward.
New chief executive Simon Fox spies "significant unrealised potential" in the business and is delivering some pragmatic plans to realise this. A principal part of his new five-point plan, the 'One Trinity Mirror' concept brings national and regional news arms within a new single publishing division. Mr Fox foresees increased efficiency and a top line boosted by a more attractive advertising proposition and "better journalism".
Other strategic aims include sprucing up the core print titles, a "relentless" focus on efficiency that aims to add a further £10m of structural savings to the £25m made last year and the acceleration of digital capabilities. Also, £8m has been allocated to build new digital business around existing "areas of distinctive content", namely sport, local, news and politics.
A non-cash impairment charge from the online recruitment business dented reported profits, but on an adjusted basis pre-tax profits increased 7 per cent. Although the pension deficit rose 29 per cent to £298m, good cash generation means Trinity Mirror can more easily meet its repayment obligations and continue to reduce debt. So, analysts at Numis see potential for considerable value creation and upgraded pre-tax profit forecasts by almost £3m to £90.7m, giving EPS of 27.6p.
Trinity Mirror (TNI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 102p | MARKET VALUE: | £280m | |
| TOUCH: | 101.5-102p | 12-MONTH HIGH: | 123p | LOW: 24.25p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 11 | |
| NET ASSET VALUE: | * | NET DEBT: | £157m | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 0.87 | -73.5 | -22.6 | nil |
| 2009 | 0.76 | 42.0 | 11.5 | nil |
| 2010 | 0.76 | 123.7 | 44.6 | nil |
| 2011** | 0.76 | 74.4 | 31.4 | nil |
| 2012 | 0.71 | 18.9 | 9.6 | nil |
| % change | -7 | -75 | -69 | - |
*Negative shareholders' funds of £639m, includes intangible assets of £0.91bn, or 354p a share ** restated | ||||
