Trinity Mirror trading statement: slower declines

graeme at 3:30 p.m. Thu 12 Nov 2009

The rates of revenue decline a Trinity Mirror have slowed a little, as reported in today’s trading statement, but the outlook still seems to be pretty bleak.

The last second half so far (to the 25th October) has seen a lower revenue decline than in the first half, down 12% on the previous year compared to 17%. The drop in ad revenue as still steep (20%) but better than in the first half (28%), and it should start recovering next year as the economy turns around.

Circulation revenue continued to drop slowly (H1 4%, H2 to date 3%), as newspapers continue their slow slide into oblivion.

The groups “digital revenues” fell more sharply than in H1, down 22%, worse than the overall fall in ad revenues. Given that internet advertising has been holding up fairly well, this is worrying. This is not a major problem for Trinity Mirror, but it does mean that its only growth business is under-performing.

Another four local newspapers have been closed, bringing the total closed this year to 26.

Trinity Mirror looks very cheap if you just look at PE, especially historical PE, but a company with a declining business that is not paying a dividend deserves to be cheap.

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