2017 was an ugly year for the media firm (which will change its name to Reach if/when it integrates the Express and Star titles). Though it spiked above £1.20 a few times in the first half of the year, by the end of December the stock was trading at 79.5p, marking a near 25% decline from its £1.05 opening price.
It continued to fall in early 2018, hitting a 5 year-plus low of 66p at the start of February. It has recovered since then, however, climbing back above 89p by mid-March before settling at a current trading price of 84p.
That recovery was in part helped along by March’s full year figures, despite the results themselves being pretty bleak. A ‘weak print trading environment’ led to a 12.6% fall in group revenue to £623.2 million, while the decline in like-for-like revenue accelerated, plunging 8.8% against the previous year’s 8% drop. However, the saving grace was a 7% jump in statutory pre-tax profit to £81.9 million (admittedly on an adjusted basis pre-tax profit actually fell 8% to £122.5 million).
Investors also seemed reassured by CEO Simon Fox’s claim that the CMA involvement in the already completed purchase of the Express, Star and OK! titles was nothing to worry about, even if the regulatory body barred Trinity from integrating its newest additions as it considered a full investigation into the deal.
Yet there was more drama related to Trinity’s M&A action in April. Not only did the CMA confirm it would be launching a phase one inquiry to ascertain whether it would lead to a ‘substantial lessening of competition’, with a deadline of 7th June. The CMA also referred the deal to culture secretary Matt Hancock, who said towards the end of April that he was ‘minded’ to issue an intervention notice having considered a ‘broad range of evidence’.
Investors will be very keen to hear an update on all this, and further reassurances from Fox that the deal isn’t on the ropes. In terms of the company’s figures, back in March Trinity revealed that for the first 2 months of the new financial year like-for-like sales had fallen 9%, so investors will also be after an improvement on that number for Q1 as a whole.
Trinity Mirror (LON:TNI) has a consensus rating of ‘Buy’ alongside an average target price of £1.41.
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