Why Shares In Trinity Mirror plc Surged Today


Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

What: The share price of Trinity Mirror (LSE: TNI) — Britain’s biggest newspaper group — is currently up 10.6%, following publication of a half-year financial report for the 26 weeks to 29 June 2014.

So What:  The company said that despite a 2.3% year-on-year fall in revenue, there had been a gradual improvement in the trend over the first half, with a decline of just 1.4% year-on-year in May and June 2014.

It also reported that its digital audience had grown by 91% year-on-year, with average unique users per month now stranding at 61.3m, and average monthly page views were up 132% year-on-year at 440.2m.

Trinity Mirror said that a 2.2% fall in pre-tax profit, down to £48.2m, was attributable to increased investment and an increase in the price of newsprint. But a fall in the rate of corporation tax helped earnings per sher grow marginally, rising 0.6%, to 15.5 pence.

What Now: Trinity Mirror says that its strategy “remains on track”, with print revenues declining more slowly, “continued tight management” of costs, and strong growth in its digital audience and revenues being driven by increased investment.

 As a result of what it describes “increased financial flexibility“, the board has said that it intends to recommend reintroducing a dividend payment, starting with a final dividend of 3p per share for 2014, and that its expects to pay a total dividend of around 5p per share from 2015. 

Commenting on the interim results, CEO Simon Fox said:

The Group continues to make good progress with the delivery of our strategic initiatives as clearly demonstrated in the performance for the first half of 2014. This momentum gives the Board confidence that our performance for the year will be marginally ahead of expectations. The strengthened financial position of the business together with continued strong cash flows also support the Board’s intention to reinstate dividends at the end of this year. This will be the first dividend paid by the Group since 2008.

Despite this morning’s jump, at 197.75p, Trinity Mirror’s share price is still trailing the FTSE 100 so far in 2014, down 3% versus a 0.6% rise by the index. Over the medium term, the newspaper group is beating the index, with a strong post-credit-crunch recovery of 174% over the past five years, compared to a 49% rise in the FTSE.

But longer-term shareholders will be more than somewhat disappointed with Trinity Mirror’s 67% fall over the last decade, whilst the FTSE 100 has risen 57% over the same period.

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Jon Wallis has no position in any shares mentioned. The Motley Fool has no position in any of the shares mentioned.