Trinity Mirror profits rise despite “challenging” market

Trinity Mirror (LON:TNI) saw a 24 percent rise in annual profit margins, following the acquisition of paper group Local world.

Adjusted pre-tax profit in 2016 was £133.2 million, compared to £107.5 million a year previously. This follows the company’s October 2015 acquisition of Local World, in a deal worth £220 million.

The deal has ensured that any losses occurred by the newspaper firm’s failed venture – The New Day – a daily national newspaper, were avoided. Nevertheless, the company acknowledged that the climate for the newspaper print industry remained “challenging”. It noted that the purchase of Local World had encouraged £25 million in cost reduction for the year, ahead of its own £10 million target.

Print advertising revenues fell by 17.9 percent for the year to January 1st, alongside a 10.7 percent drop in total revenues for its papers. Specifically, sales of the Daily Mirror were down 10.8 percent in Scotland alone, as opposed to a 5.1 percent drop across the UK tabloid market collectively.

Addressing the evident decline in print advertising across the media industry, the company noted that it intends to focus its efforts upon further consolidation of its business.

“We see ourselves as a consolidator in the newspaper industry and will continue to do so subject to tight financial returns,” commented the group chief executive Simon Fox.

“We are on the way, but it’s difficult because the market changes incredibly quickly,” he added, regarding future outlook.

This follows last week’s decision to drop out of negotiations for further collaboration across newspaper groups in the UK in favour of focusing upon further consolidation efforts. Similarly, in January Daily Mail owner DMGT (LON:DMGT) also announced their departure from discussions.

“We announced last week we would not be involved in the next phase of discussions,” Mr Fox stated. “We have left the door open for rejoining it at a later date. If we can collaborate as news brands that’s for the good of the industry and I wish it well.”

The Trinity Mirror group are currently the largest newspaper company in the UK, following their buy-out of Local World in 2015. Its headquarters are located in London’s Canary Wharf, and its titles include Sunday Mirror and Daily Record.

Currently, shares in Trinity Mirror plc are down 6.43 percent as of 14.58PM (GMT)