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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Reach plc    TNI   GB0009039941


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Trinity to accelerate digital strategy after print decline

02/27/2017 | 07:05am EST

LONDON (Reuters) - British newspaper group Trinity Mirror said it would focus on growing its digital advertising sales to cope with "challenging and volatile" markets after reporting a 10.7 percent drop in full-year print revenue.

The owner of the Daily Mirror, which has been ripping out costs to counter the fall in circulation and print advertising, saw particularly weak demand from retail customers for display ads, and a drop in classified recruitment postings.

Trinity, which also publishes the Sunday Mirror and The People, said print markets were challenging and volatile.

"The print environment is challenging, we are under no illusions about that," Chief Executive Simon Fox said. "But we continue to do a good job of managing the business as efficiently as we can."

January and February offered no respite, with like-for-like revenue expected to fall 9 percent, it said, a deterioration on the roughly 7 percent drop in the final quarter of 2016.

Fox, however, said it was a relatively short period and not an especially significant part of the year. "We are where we expect to be at this stage of 2017," he said in an interview.

Cost control and the acquisition of more local newspapers enabled Trinity to post a 12 percent rise in adjusted earnings per share and to say it was confident it would deliver sustainable growth in revenue, profit and cash flow over the medium term.

Shares in the group, which have climbed 39 percent from four-year lows in July, were trading 4 percent lower at 113.5 pence at 1145 GMT.

Barclays, which has an "equal weight" rating on the shares, said it was impressed by the performance on reducing debt.

"We have concerns, however, that print advertising can deteriorate further, given the power of Facebook and Google, and we struggle to pin down where revenues can go and whether declines could still be offset by savings," the bank said.

Fox said he had set some "stretching" targets, including at least 15 percent growth in digital revenue growth, and print advertising at least in line with national market trends.

The publisher would have missed both targets last year, but Fox said growth in digital display advertising would boost numbers this year, and he saw opportunities to do more in video.

Fox said Trinity Mirror had withdrawn from talks on an industry-wide initiative to collaborate on ad sales.

The company is pursuing a tie-up with Richard Desmond's titles, including the Daily Express and Daily Star, as revealed in January.

Fox had no update on the talks, but he said Trinity had a strong track record in integrating acquisitions.

"We are good consolidators, we know how to make the most of common back office, and if similar organisations come together there are opportunities," he said.

(Additional reporting by Kate Holton, editing by Louise Heavens and Susan Thomas)

By Paul Sandle

© Reuters 2017
Stocks mentioned in the article
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