Trinity Mirror raises guidance

published 2 August 2012

Trinity Mirror, the publisher of the Daily Mirror and a host of regional titles, has upgraded its full year forecasts despite warning that circulation will fall.

Trinity Mirror has experienced a turbulent six months that have seen the departure of its Chief Executive, Sly Bailey, in a shareholder revolt over pay, while its two leading editors were also sacked.

Richard Wallace of the Daily Mirror and Tina Weaver of the Sunday Mirror were both escorted from the building as the group sought to slash costs and move the two papers into a single, seven days a week operation.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

The cost reduction efforts appear to have paid off. Operating profits rose to £52.5m, up 11.5% on the first half of 2011 while profits before tax came in at £35.1m, compared to £28.9m last year.

Revenues have fallen, however, from £371m to £356m.

It will not come as a surprise that circulation has fallen, as Trinity Mirror benefited from the closure last year of its red top rival, the News of the World, but New International has now begun publishing the Sun on Sunday.

Circulation revenue dropped 0.6% against the prior year. The real concern will be advertising revenue which dropped 10.5% to £151.1m.

Nevertheless, with net debt reduced by £40.3m to £180.9m in the last six months, Trinity Mirror can plausibly say it is weathering the current macro economic storms.

In its outlook statement, the firm says the outcome for 2012 will be "ahead of expectations".

At 10:17, the share price had risen 23.5%.