Trinity Mirror improves results following acquisition

By Max Goldbart, Monday 27 February 2017

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Trinity Mirror has seen a boost in both print and digital revenue, with overall sales increasing for the full year by more than £100m.

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Trinity acquired Local World in late 2015

For the 53 weeks ending 1 January 2017, sales rose 20.2% on the previous year, from £592.7m to £713m. Operating profit rose by 25.5% (£109.6m to £137.5m), and pre-tax profits increased from £107.5m to £133.2m. Earnings per share increased by 12.4% (33.9p to 38.1p).

In last year's annual results, group revenue declined by 6.9%. 

The increase was in the main put down to Trinity’s acquisition of rival publisher Local World, which completed for £220m at the end of 2015. Local World publishes more than 100 print titles and has around 70 websites. 

However, Trinity finance director Vijay Vaghela said that on a like-for-like basis, which assumes Local World was owned from the beginning of 2015 and excludes revenue from the Independent print and distribution contract, which ceased in April 2016, overall revenues fell by 8%.

Print revenue experienced a rise of 19.6%, from £485.9m to £581m. Digital almost doubled, from £42.9m to £79m, leading to an overall increase in publishing revenue of 24.8%.

Contract print revenues fell by just shy of 20% to £36.2m, following the cessation of the contract to print the Independent and the acquisition of Local World, 

In a live webcast, Trinity chief executive Simon Fox said: “We delivered very positive financial performance in 2016. We have made strong progress during the year and our print brands performed well in a competitive marketplace.

“While we experienced volatility throughout the year, we are encouraged that trends were better in Q4. 2016 was also our first full year of ownership of Local World and I’m delighted with how well the integration of the business has gone.”

Trinity said it had made £10m of “synergy savings” during the integration process.

As part of the acquisition of Local World, Trinity initially agreed to sell a number of titles to Iliffe Media, but later changed its mind, incurring a break fee of £2m.

Fox added that Trinity had also rationalised its manufacturing and distribution and centralised production and pre-press activities. It closed its Cardiff print site at the end of last year, putting 33 jobs at risk, with costs associated with the closure of the site plus the closure of a press line in Cardonald, Scotland, reaching £10.7m (£9.1m on the write-off of fixed assets and £1.6m closure costs).

Print advertising revenue increased by 30%, from £182m to 236.6m, but fell on a like-for-like basis by 17.9%. Circulation increased by 14%, with like-for-like declines at 5.2%. Fox said declines were mitigated with cover price increases.

“We’re rigorous in ensuring that each one of our print titles meets the required profitability requirements and that is why we closed one paid and seven free titles this year,” added Fox. 

2016 saw Trinity launch The New Day, Britain’s first national newspaper for 30 years, which spent just nine weeks on the newsstands before being pulled.

Trinity’s pension deficit increased by £160.8m to £466m, driven by a fall in long-term interest rates and higher inflation expectations. The group paid £40.7m into the defined benefit pension scheme during 2016.

Vaghela also said the group was continuing to make progress with settling civil claims from phone hacking. 

Trinity was recently rumoured to have been in talks with media mogul Richard Desmond’s Northern & Shell on buying a number of its titles.

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