Trinity Mirror (TNI) continues to endure a “difficult trading environment”, as reflected by a 12 per cent decline in first-half print publishing revenue to £255m, while print advertising revenue was “worse than the national market trends”. If that wasn't bad enough, the group raised its provision for legal costs relating to the phone hacking scandal by £7.5m to £15.4m in total. That said, the market reaction was muted – perhaps because the company's bad news was offset by improved digital publishing revenue (up 4 per cent). Or, indeed, because Trinity Mirror has raised its cost-cutting targets from £15m to £20m for the full year, having beaten expectations already.
These cost reductions drove Trinity Mirror’s operating margin up a full percentage point to 15 per cent, despite the hit to its top line. And the group successfully kept circulation revenue in single-digit decline with a 7 per cent fall on a like-for-like basis. Investors would have also been pleased that lower mortality assumptions facilitated a £59.2m reduction in the pension deficit to £406.8m, while net debt also fell.
There were signs of momentum in digital, with revenue from digital display and transactional publishing growing by 17 per cent because of more page views. As part of a strategy to simplify its digital portfolio, the digital brands gained through the Local World acquisition are being integrated into Trinity’s online platforms.
Analysts at Numis forecast adjusted pre-tax profit of £120m and EPS of 34.8p for FY2017, down from £133m and 38.1p, respectively, in 2016. Slight improvements are expected for FY2018.
| TRINITY MIRROR (TNI) | ||||
| ORD PRICE: | 105p | MARKET VALUE: | £290m | |
| TOUCH: | 104.8p-105.3p | 12-MONTH HIGH: | 124p | LOW: 75p |
| DIVIDEND YIELD: | 5.3% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 227p* | NET DEBT: | £22.4m | |
| Half-year to 2 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 375 | 45.2 | 12.8 | 2.10 |
| 2017 | 320 | 38.2 | 10.6 | 2.25 |
| % change | -15 | -15 | -17 | +7 |
| Ex-div: | 7 Sep | |||
| Payment: | 29 Sep | |||
| *Includes intangible assets of £901m, or 326p a share | ||||
