Digital growth and cost reductions at Trinity Mirror (TNI) failed to offset further declines in newspaper sales and print advertising revenues, fuelling a 5 per cent decline in adjusted operating profit to just under £48m. An extra £16m set aside for phone-hacking costs helped push statutory profits down even further. But the Daily Mirror publisher stole the headlines by swinging to a maiden net cash position and reinstating its half-year dividend: cheering investors sent its shares up more than a tenth.
Average monthly unique visitors to the group's websites soared by more than half to over 95m; that sent digital publishing sales up 27 per cent to £19m. But a worsening newspaper market meant underlying revenues from publishing and printing slumped 9 per cent and 14 per cent, respectively. In response, management slashed adjusted operating costs by 12 per cent and doubled planned cost savings to £20m this year, but expects to spend £15m on restructuring to hit that target.
Robust cash generation meant the group amassed a substantial net cash pile despite pension, dividend and settlement costs. It also pruned its portfolio, replacing six smaller titles with the Manchester Weekly News. And the underlying fall in print advertising revenue slowed to 9 per cent in July, compared with double-digit declines in May and June.
Numis Securities expects pre-tax profit of £100m this year, giving EPS of 32p, from £102m and 32.8p in 2014. The broker forecasts a dividend of 5p a share in 2015.
| TRINITY MIRROR (TNI) | ||||
|---|---|---|---|---|
| ORD PRICE: | 144p | MARKET VALUE: | £370m | |
| TOUCH: | 144-145.5p | 12-MONTH HIGH: | 215p | LOW: 127p |
| DIVIDEND YIELD: | 3.5% | PE RATIO: | 10 | |
| NET ASSET VALUE: | * | NET CASH: | £23.9m | |
| Half-year to 28 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 324 | 50.5 | 18.4 | nil |
| 2015 | 289 | 12.1 | 4.0 | 2.00 |
| % change | -11 | -76 | -78 | - |
Ex-div: 1 Oct Payment: 30 Nov *Negative shareholders' funds | ||||
