Trinity shareholders approve name change as revenues fall

Richard Stuart-Turner
Friday, May 4, 2018

Trinity Mirror will change its name to Reach next week after shareholders overwhelmingly backed the rebrand at the group’s Annual General Meeting, but sales at the publishing company have continued to slide.

Fox: I continue to believe that the business has significant long term potential
Fox: I continue to believe that the business has significant long term potential

In a trading update released yesterday (3 May), the group – excluding the publishing assets of Northern & Shell, which it acquired in February – said its revenue for the four-month period from 1 January to 29 April 2018 fell by 9% on a like for like basis – which exclude from the 2017 comparative the impact of portfolio changes.

It said print advertising trends were marginally better in March and April but this was offset by the severe weather conditions during March which negatively impacted circulation revenue.

Publishing revenue for the period fell by 9% on a like for like basis, with print declining by 11% and digital growing by 2%. Publishing print advertising revenue fell by 17% and circulation revenue fell by 7%.

Improved national advertising performance over Easter resulted in print advertising revenue falling by a reduced 15% in March and April.

The group said it continues to grow digital display and transactional revenue, which increased by 7% during the period. Digital classified advertising, which is predominantly upsold from print, fell by 16% during the period.

Trinity said it continues to generate strong cashflows with its net debt at the end of April estimated to be £85m. This is after payments of £88m in relation to the acquisition of Northern & Shell’s publishing assets – which the trading update refers to as Express and Star – and increased pension contributions, but before the payment of the 2017 final dividend of £10m.

Express and Star revenues are estimated to have fallen by 5% on a like for like basis in the period, with print falling by 8% and digital growing by 40%.

Revenue trends since completing the acquisition are estimated to be better than the trends for the period pre-acquisition.

The board anticipates the group’s performance for the year to be in line with market expectations. The company has adjusted its forecast pre-tax profits for the full-year to the £131.7m to £133.9m range. In March the business reported a pre-tax profit of £122.5m, down 8% from £133.2m the prior year.

Trinity Mirror chief executive Simon Fox said: “I am pleased with the actions we have taken to protect print profitability whilst continuing to build our digital revenue.

“Our tight management of the business, the completion of the acquisition of the UK publishing assets of Express and Star, and appropriate investment in building our digital business make me confident that 2018 will be another year of progress.”

Following the unanimous agreement by Trinity’s shareholders at yesterday’s Annual General Meeting to rebrand the company to Reach, it will change its name next Tuesday (8 May) and will trade under the ticker “RCH”.

An investigation into the competition aspects of Trinity’s acquisition of Northern & Shell’s publishing assets was launched last month by the Competition and Markets Authority (CMA). The phase 1 review of the investigation is expected to be completed by 7 June.

Subsequently, after culture secretary Matt Hancock said last week that he may be “minded to” intervene on the deal, he confirmed his decision to act earlier this week by referring the acquisition to the CMA and Ofcom for a review on public interest considerations.

Trinity said this is expected to be conducted in parallel with the CMA phase 1 merger investigation.

The group’s shares fell by 1.7% yesterday to 85p each but have since rallied to 85.5p at the time of writing.

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