Trinity Mirror Share Discussion Threads

[smicker] 11/11/2016 15:05

gfrae,
I think its clearly a price support mechanism. The shares bought arent cancelled either.

[onwego] 11/11/2016 14:24

TNI just totally battered by the Pension deficit which far eclipses the market value of the equity.

Agree with the positives listed above on cash flow, debt reduction and earnings, although have not checked the non-current (property) assets on the bal sheet.

Isn't the next triennial pensions review in 2017? In which case, the trustees may be asking for higher annual top-ups than the existing £36mio or so.

If long term rates continue to rise, this should be a good investment I think, but it's clearly risky.

[gfrae] 11/11/2016 09:14

It almost seems as if the lower the price the less they buy in. I thought you were supposed to buy low ? Maybe the machine needs tweaking ?

[extrader] 10/11/2016 22:38

Hi pvee,

...still can't understand why the board has decided to do a share buyback programme instead of funding the pension deficit ......

AIUI, they're doing both : funding the pension deficit because they have to please the Trustees (if they want to pay dividends)....and buying back shares because they have the cash-flow to do so (AFTER paying dividends) and want to please the shareholders....

ATB

[pvee] 10/11/2016 20:05

My biggest holding but still can't understand why the board has decided to do a share buyback programme instead of funding the pension deficit if quite cumbersome and holding back the share price.

Maybe the underlying reason for the weakness although starting to pick up

[dazzaa] 10/11/2016 14:11

Never been one for charts my self however they can (Chartists) spot trends before they become apparent to many so how long will it be before the price hits 65/70 as we are well on the way and has been for some time almost tracking itv's fall.As always I could be wrong.

[patience a virtue] 10/11/2016 13:37

Appreciate your points CJohn. Pension deficit can fluctuate and with interest rates more likely going up than down the deficit might be a lot less in the future.
The Local World purchase was part funded by share issue at much higher price and the remainder in debt which is disappearing quickly.
TNI has a niche market, no competition in the regional papers and the circulation of The Mirror is holding up well.
The newspaper industry is like I said before in decline but the pace of decline is far slower than many had anticipated.
The property portfolio is worth hundreds of millions in the last valuation if I remember correctly.

[cjohn] 10/11/2016 12:34

HI Kazoom, the 426m déficit doesn't include the recent further cut in interest rates.

Without the déficit, it would be fair to value these on a PE basis and, then, in spite of the poor business prospects, they would be a clear buy. However, on an enterprise to earnings basis, they don't look to me to be particularly undervalued. Funding requirements for the pension may well need to be increased at the next review. At 36m a year, they are already a significant drain on cash flow.

There have always been boosters of the digital side of the bueiness on this BB. By buying up the remaining 80% or so of Local World, they have now got an annual turonver of close to a hundred million in digital, about 13% of total revenue. However, digtial growth rates have, of course, moderated, and are now close to single figures. And, in my view, are likely to fall further. ((Further elements of the specialist digital división are rightly, also likely to be sold off. The specialist división has never added economic value and is a drain on capital.)) So digital is simply not big enough, let alone grwoing fast enough, to reverse the trend in revenue declines. This is the case now and it has been for years.

Strategy? They will doubtless use any sapre cash to try to acquire scale in digital. The problem is that digital media is increasingly commoditised. Competition is ferocious.

Any pluses here: cash flow rightly mentioned by all posters.

And there's the interesting matter of barriers to entry to industries in (terminal) decline. New Day is an example of what will happen to any outfit foolish enought to launch a competng daily. So TNI is spared further entrants to the market, preserving margins longer than might otherwise be expected. The same logic applies to local media. What new company in their right mind would buy into local newspapers. Hence, less competition for TNI.

Should TNI continue trying to buy up assets of a limited life in a rapidly declining industy? It depends on the rpice paid. The inital purchase of Local World, back in 2012 from memory - was a brilliant move. However, they over-paid last year in my view. 3 times the 2012 Price. What were they thinking of? They need better negotiators.

all the best to all on here and good luck to holders.

[patience a virtue] 10/11/2016 12:10

Good post kazoom, agree with all your points. The newspaper industry is in decline but it will not be dead by tomorrow, in fact I expect it to last for many many more years. TNI has many quality national and local papers people like to read.
Pension deficit is an issue affecting many UK companies, including some ftse 100 companies.

[dazzaa] 10/11/2016 12:02

Yes kazoom not a bad analysis of where it is at the moment. In terms of profit contribution of the mirror and its pension deficit is that definable from the regionals profit and deficit?

[kazoom] 10/11/2016 11:49

I wouldn't say I see it as the Holy Grail and I'm not too familiar with the comparison with JPR.

When you say here "buck the obvious" - I presume that you mean the continue decline in newspaper circulation. I certainly don't count on TNI bucking this (although they are clearly making progress with generating digital revenue - I don't begin to estimate the long term value of this.) Even on a "run down" basis it seems to me that the business is worth significantly more than the current share price, even accounting for the fact that they cannot be expected to bring down costs in line with revenues for ever.

On Debt : over the six months to 3rd July they reduced net debt BY £45m TO £48m - so yet debt free soon is a very real prospect (although being debt free is not necessarily the most efficient business position).

This does NOT though include the pension deficit, which increased by a stonking £120m to £426m (and maybe this is the primary reason for the share price weaknes?), driven by a fall in long term interest rates. And this may now be worse if the most recent BoE rate reduction was not included in that valuation.

So it is a significantly longer road to become debt free including the pension scheme, but certainly not beyond the horizon.

"Sometime" of course also the interest rate trajectory will reverse and the deficit will flip. To be fair I have been making this argument for some time, but perhaps now the likelihood of inflation and interest rates rising is more in sight.

That's just a bit of a potted view of the investment case - I might dust off and update my more detailed in due course.

[patience a virtue] 10/11/2016 11:49

Buy when it is out of love. Doubt it will get much lower, I have been adding anyway.

[dazzaa] 10/11/2016 11:42

Ahh then it's a buy, now or when the price flattens some more though the share repurchases are not making much of a difference.

[patience a virtue] 10/11/2016 10:58

Dazzaa, TNI much bigger business than JPR, making 75m profit a year, debt will be nil next year, 6.5% dividend yield, P/E at 2.3! lots of freehold properties, good management, hacking issues no longer an uncertainty, digital business motoring ahead, pension deficit can be reduced with the rise of interest rates in the future (36m per year payment required as pension contribution), advertising may improve as general economy grows. JPR has a huge debt, cannot see it reduced much hence no shareholder value. DYOR

[dazzaa] 10/11/2016 10:45

I would think the sector in general does not owe us any favours but it has some way to catch JPR in trend (SP)

But why if I may ask does all here think TNI is the Holy Grail and can buck the obvious but it does I must admit have better management than JPR though debt seems a problem here too, did I read something somewhere about being debt free soon (like JPR) would that include pension problem too?

[kazoom] 09/11/2016 18:29

Could be Extrader, but looked at another way (longer term) if 76(ish)p is broken on the downside, there is no support until the high 20s!

I would love that - having sold some of my position to early back then.

I don't seriously believe that will happen, but I wish I knew what is driving the current weakness (and I don't buy the argument that it is clumsy selling of a large position).

[extrader] 07/11/2016 16:01

Hi all,

May be fanciful on my part - and talking my own book - but we look (maybe, just maybe), to be near the right leg of a humongous 'W'.....

ATB

[patience a virtue] 07/11/2016 11:17

keep adding

[s34icknote] 07/11/2016 10:59

still slipping

[spoole5] 06/11/2016 11:51

At 80p the yield is closer to 6.5%. These are priced to go bust but generate enough cash to buyback their own shares. Debt free next year and any increase in interest rates and long term gilt yields will help close the pension deficit.

[mrx9000] 06/11/2016 11:31

From a technical viewpoint, TNI looks like it is forming a double bottom. It is still a bit to early at present to see if it does a double bottom reversal, but when you look at the financials and see that it is generating a lot of cash, doing some very nice streamlined sites e.g. Manchester, paying a nice reasonable 5% yield, doing a small share buyback etc, etc I do see these getting rerated before next April and yes I do see TNI doing a double bottom reversal in the not to distant future.

[fewdollarsmore] 04/11/2016 11:51

They buy upto value of £10m or 28.5m shares so the lower the price the better for the repurchase programme.

[patience a virtue] 03/11/2016 10:35

x dividend today.

[freddie ferret] 01/11/2016 16:51

Possibly, but if they were at 8p the company would have still more incentive to do the buyback.