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Trinity Mirror leaves the emergency ward

RESULTS: Trinity Mirror's digital business is expanding, and print losses are narrowing, but growth at group level remains some way off.
July 28, 2014

Perennial print declines continue to weigh on Daily Mirror publisher Trinity Mirror (TNI), but at least digital investment and cost-cutting are helping slow the fall. Half-year results reflecting this encouraged investors to bid its shares up 10 per cent. Even so, operating profit - adjusted for one-off items and restructuring charges - fell 5 per cent to £50.3m.

IC TIP: Buy at 200p

Profits were hit by falling print-publishing revenues, down 4 per cent; a 10 per cent rise in newsprint prices; and £3m of investment in digital offerings. On the plus side, Trinity managed to cut its operating costs by 2 per cent to £277m by outsourcing its IT services and reorganising the business. It expects to deliver full-year structural cost savings of £10m or more.

The pace of group sales declines more than halved from the start of the year to 1.4 per cent in May and June. Moreover, Trinity's websites attracted 61m unique visitors a month over the period, helping digital publishing revenues grow by almost a half to £15m. Those gains reflect a new editorial structure, designed to produce content at peak viewing times, and the hiring of social media editors and other specialist staff. It also saw print improvements: the repositioning of the Daily Mirror as the "intelligent tabloid" may have helped its circulation outperform the shrinking market.

Broker Numis expects full-year pre-tax profits of £100m, giving EPS of 32p, falling to £97.5m and 30.6p in 2015.

TRINITY MIRROR (TNI)
ORD PRICE:200pMARKET VALUE:£516m
TOUCH:200-202p12-MONTH HIGH:239pLOW: 101p
DIVIDEND YIELD:PE RATIO:na
NET ASSET VALUE:*NET DEBT:£56m

Half-year to 29 JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)†
201333230.39.6nil
201432450.518.4nil
% change-2+67+92-

*Negative shareholders' funds

†Trinity intends to recommend a final dividend of 3p a share