Trinity Mirror posts rise in 2017 earnings
● Performance driven by cost-cutting as publisher changes name to Reach
The publisher of the Daily Mirror saw profits rise last year as the benefits of a cost-cutting drive offset falling revenues, with the group also announcing a name change following a deal to buy the Daily Express.
Pre-tax profits at Trinity Mirror grew to £81.9 million in 2017 from £76.5m in the previous year, while revenues fell 12.6 per cent to £623.2m on the back of declining print advertising sales.
Print advertising revenue fell by about 25 per cent in the period, or 19.3 per cent on a like-for-like basis.
Classified advertising also came under pressure, Trinity added, with revenue falling by 25.1 per cent as it was dragged down by declines in recruitment and property.
As part of its update, Trinity also said it would change its name to Reach, which it said more accurately reflected the evolution of the company.
Chief executive Simon Fox said: “Through our content we reach millions of people every day. [This] extends across multiple platforms in both print and digital and across the cities and communities that we serve. We think this is a name which better reflects what we do and what our ambitions are.”
The group said it delivered £20m of cost savings in the year, £5m ahead of its initial £15m target. For 2018, Trinity is targeting an additional £15m of savings.
Fox said: “We once again delivered a strong financial performance in what remains adifficulttradingenvironment for the industry. I am pleased with the acquisition of the publishing assets of Northern & Shell in line with our strategicfocusonconsolidation,and I believe this presents significant opportunities to realise real value. Having made good progress with our strategy in 2017, we will build on this in the year ahead.”
Analyst Gareth Davies of Numisdeemedthe2017results “strong” overall, including a robust margin of 20 per cent. The latter by 0.7 percentage points on the back of continued focus on costs.
He also said his team had increased its 2018 pre-tax profit and earnings per share (eps) expectations to £134m and 36.7p respectively from £121m and 35.7p, with adjusted eps predicted to hit 42.1p in 2019. “Trinity shares are standout value at current levels, we reinstate our ‘buy’ and a 210p blended multiples based target,” Davies added.
The results come after Trinity last month struck a £126.7m deal to buy a string of titles from Northern & Shell, including the Daily Express, the Daily Star and OK! magazine.
It was announced that Trinity would stump up an initial payment of £47.7m to Northern & Shell, followed by £59m between 2020 and 2023 and a further £20m in shares to the privately owned firm.
The move marks a major shake-up of Britain’s media landscape, bringing together the politically left-leaning Sunday Mirror with more right-wing publications such as the Sunday Express.
Fox at the time ruled out a shift in editorial tone across the major titles, but said it would spark £20m a year in cost savings, driven in part by sharing stories across titles.