The publisher of the Daily Mirror has reassured investors that its business remains on track despite the market uncertainty following the UK’s Brexit vote.
Trinity Mirror said that its half-year results will be in line with expectations, but that it is prepared to take action if Brexit starts to impact its business.
In a trading update ahead of its half-year results on 1 August, the company said: “We will continue to invest in digital growth and take the necessary mitigating actions to support profits given the increased uncertainty arising from the outcome of the UK’s referendum on EU membership.”
Encouragingly, the publisher saw a slight improvement in the turbulent print advertising market with a 14% fall in the second quarter.
While the market remains extremely tough this is nevertheless a significant improvement over a 19% fall in the first four months.
The publisher said that trends have improved slightly across the year with a 9% group revenue fall in the first quarter improving slightly to a 7% dip in the second quarter.
Total print revenues, including advertising and circulation income, fell 12% in the first quarter and an improved 9% in the second quarter.
Analysts interpreted the market update as good news for the company.
“Against a backdrop of Brexit-related uncertainty, Trinity Mirror has put out a brief, but reassuring, first half update,” said Alex DeGroote, analyst at Peel Hunt.
Like most media companies Trinity Mirror has seen huge falls in its share price, down 40% in the last six months, as investors already concerned about a tough market for publishers took fright at the potentially destabilising effect of Brexit.
DeGroote described the tough print media market as “friendless” but said that Trinity Mirror has a “hard-won” reputation for resilience and profit protection.
“[There has been] no impact to date from advertising cancellations [since the Brexit vote], although clearly it is very early days,” says DeGroote. “Print media is clearly friendless at present. However, we remind investors that Trinity Mirror has a hard-won reputation for profit protection, significant freehold property assets, and option value from further industry consolidation, if competitors fall by the wayside.”
Earlier this week, Trinity Mirror announced it was cutting about 15 jobs but stressed that it was not a response to turmoil in the market or the recent closure of the New Day newspaper.
