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Trinity Mirror plans to consolidate the UK newspaper industry

Amid falling print revenue, the Daily Mirror owner is planning to join forces with fellow publishers
February 28, 2017

Launching the UK's first new daily newspaper in three decades when demand for print publishing is falling was, in hindsight, an error for Trinity Mirror (TNI). The paper - New Day - lasted just nine weeks on the shelf. But management seems to have learnt a valuable lesson and is now aiming to diversify revenue streams and grow digital audiences.

IC TIP: Buy at 110p

Digital publishing revenue rose by 13 per cent thanks to larger online audiences: average monthly page views increased 15 per cent to 636m. This helped soften the blow caused by a rapid decline in the larger print publishing division, although like-for-like revenue still fell 8 per cent at the group level.

Reported numbers, however, were buoyed by the acquisition of Local World, completed in November 2015. The integration of this local paper publisher is progressing ahead of expectations and management thinks 2017 annual cost savings will come in at £15m, £3m ahead of target.

Consolidation is another tranche of the group's strategy. Trinity is in early-stage talks to take a stake in Northern & Shell, the parent company of the Express newspaper titles. But last week it became the second publisher to pull out of the UK newspapers initiative to share advertising costs, following DMGT's departure in January.

Broker Numis expects EPS will fall to 34.8p in the year to December 2017, from 38.1p in FY2016.

TRINITY MIRROR (TNI)

ORD PRICE:110.3pMARKET VALUE:£309m
TOUCH:110-110.5p12-MONTH HIGH:161pLOW: 73p
DIVIDEND YIELD:4.9%PE RATIO:3
NET ASSET VALUE:*NET DEBT£30.5m

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201270710.06.8nil
2013664-161.0-39.0nil
201463682.028.13.00
201559367.233.95.15
201671376.538.15.45
% change+20+14+12+6

Ex-div: 11 May

Payment: 9 Jun

*Negative shareholders' funds