Trinity Mirror to sell some newspapers
LONDON --Trinity Mirror PLC, publisher of the Daily Mirror newspaper, said Thursday it intends to sell its sports titles and regional papers in central and southern England and return some of the net proceeds to shareholders.
The company said it intended to focus on its national newspaper titles, which also include the Sunday Mirror and The People, while disposing of sports papers including the Racing Post and regional titles in London and central and southeastern England.
The company said it expected annual cost savings of 20 million pounds ($39 million).
Bridgewell Securities said it believed "there is enough here in terms of cost savings and planned/achievable disposals to counteract the indifferent advertising market and potential downside earnings per share risk."
But Numis Securities questioned the logic of Trinity Mirror's plans.
"It falls short of the full demerger of the national and regional titles expected by some. It contains no 'trophy asset' valuation for the Mirror titles. We are unsure of the strategic logic of breaking up the regional newspaper division and it doesn't directly address the problem of rapid circulation declines at the Mirror," Numis said.
Trinity Mirror shares were up 0.5 percent at 500 pence ($9.85) on the London Stock Exchange.
The Daily Mirror's circulation of 1.55 million in November was a drop of 7.3 percent in a year, according to the Audit Bureau of Circulation. It was the biggest drop among the popular daily tabloids which all posted declines.
"The proposed disposals will enable us to concentrate on the heart of the group and adopt a new, technology-led operating model that will ensure we serve our advertisers and readers better from a significantly lower cost base," said Group Chief Executive Sly Bailey.
"The new integrated model will allow Trinity Mirror PLC to develop as a multi-platform media business and capitalize on the enormous strengths we have in our core markets."
In a trading update, the company said it expected full-year results to be in line with market expectations.
Through November, it said group advertising revenues on a like-for-like basis were down 9.6 percent. The national papers reported a 10.7 percent revenue drop. Group circulation revenue was down 0.8 percent.
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On the Net: http://www.trinitymirror.com
