Reach Plc Regulatory News (RCH)

3 May 2018

Trinity Mirror plc

Trading Update

Trinity Mirror plc is issuing a trading update for the 4 month period from 1 January 2018 to 29 April 2018 ('the period'), ahead of its 2018 Annual General Meeting later today.

Outlook

The Board anticipates performance for the year to be in line with market expectations*.

Publishing assets of Northern & Shell in the UK ('Express and Star')

The acquisition of Express and Star was completed on 28 February 2018. As announced on 2 March 2018, the Competition and Markets Authority ('CMA') has launched a merger investigation. It has now been confirmed that the phase 1 review is expected to be completed by 7 June 2018. On 1 May 2018, the Secretary of State referred the acquisition to the CMA and Ofcom for a review on public interest considerations. We expect this review to be conducted in parallel with the CMA phase 1 merger investigation. The Board remains confident that the acquisition does not present any competition or media plurality issues.

As the CMA has imposed an initial enforcement order ("hold separate" order) for the period of their review, the Group only has access to limited financial information for Express and Star. Therefore, the like for like trends in this trading update exclude the performance of Express and Star which is separately disclosed.

Revenue trends

Group (excluding Express and Star)

On a like for like** basis Group revenue for the period fell by 9%. Print advertising trends were marginally better in March and April but this was offset by the severe weather conditions during March which negatively impacted circulation revenue.

Publishing revenue for the period fell by 9% on a like for like** basis, with print declining by 11% and digital growing by 2%. Publishing print advertising revenue fell by 17% and circulation revenue fell by 7%. Improved national advertising performance over Easter resulted in print advertising revenue falling by a reduced 15% in March and April.

We continue to grow digital display and transactional revenue which grew by 7% during the period. Digital classified advertising, which is predominantly upsold from print, fell by 16% during the period.

Express and Star

For the period, revenue for Express and Star is estimated to have fallen by 5% on a like for like** basis with print falling by 8% and digital growing by 40%. Revenue trends since completing the acquisition on 28 February 2018 are estimated to be better than the trends for the period pre acquisition.

Net debt

The Group continues to generate strong cash flows with net debt at the end of April estimated to be £85 million. This is after payments of £88 million in relation to the acquisition of Express and Star and increased pension contributions but before the payment of the 2017 final dividend of £10 million.

Simon Fox, Chief Executive, commented:

"I am pleased with the actions we have taken to protect print profitability whilst continuing to build our digital revenue. Our tight management of the business, the completion of the acquisition of the UK publishing assets of Express and Star, and appropriate investment in building our digital business make me confident that 2018 will be another year of progress."

Enquiries

The statement on future performance is given as at the date of this announcement and is subject to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in the statement. The Company undertakes no obligation to update this forward-looking statement.

* The market consensus range for adjusted PBT for the 52 weeks ended 30 December 2018 is £131.7 million to £133.9 million. This range only includes estimates from analysts that have updated forecasts since our annual results announcement on 5 March 2018. Adjusted PBT excludes operating adjusted items (costs in relation to restructuring charges in respect of cost reduction measures, pension administrative expenses, amortisation of intangible assets and transaction costs in relation to the acquisition of Express and Star) and the pension finance charge.

** The like for like trends for 2018 exclude from the 2017 comparative the impact of portfolio changes.