Trinity Mirror Share Discussion Threads

[harry_david] 27/10/2017 07:29

There is so much rubbish talked about interest rates and this article is a perfect example. UK rates would be higher already if it were not for Brexit. Rates are almost certain to continue their recent rise entirely because internationally they are rising. The fundamental position is that the World economy is improving faster than economists and forecasters ( who are all in denial)are willing to accept and with it inflation is now showing the first signs of Spring.

[gfrae] 26/10/2017 21:44

You can believe that if it makes you happy !

[freddie ferret] 26/10/2017 18:46

The reality is that there are lags between policy change and a material effect on the real economy. You change rates now for what you are expecting in the future not just how things look today.
Econometrics is a little talked of science these days, but the govt has powerfull computers crunching the equations all the time.

[cityconindex] 26/10/2017 08:54

If this comes to pass will it affect the TNI share price? and by what degree?

Cheers

[cjohn] 24/10/2017 11:12

In the short-term and médium term, they will acquire new revenue streams. That's the only way to do it quickly enough to balance declines in analogue revenue.

Look at how overall revenue is dropping off. Double digit percentage declines translates to around 80-90m sterling a year. No one surely seriously believes - including management - that they can balance such declines with growth from existing digital plus organic new revenue streams.

(Perhaps in the sixth or tenth year from now, however, with annaul revenue from analogue seriously reduced, and hence the annual sterling decline in analogue revenue serioulsy reduced , growth from digital and new revenue streams could then balance the annual decline. But that is scarcely a strategy!!)






PS I have a football-mad friend who says that Trinity's new online digital site, football London, is excellent. Whether it's generating much revenue is another question.

[kazoom] 23/10/2017 12:24

Important to note that the description from the company is that :

"In the medium term, growth from digital and new revenue streams will outstrip print declines"

Now medium term to me infers 3-5 years and it should be clear to everyone (including the board) that the current run rates of print decline and digital growth do not support this. So it's crystal clear that the plan is not entirely 'organic'.

We don't, AFAIK, have a clear view from the board on this trajectory and what these "new revenue streams" are over the "medium term". To be frank that would probably be regarded as commercially sensitive, so you have to in some degree take this view as something of an "act of faith". As such you'd want to apply a degree of risk to any valuation based on this transformation.

My view remains that in fact the run down of the traditional declining business in itself supports a significantly higher share price than we currently see, so imho the transformation piece is valued at less than nothing.

So I think there is substantial upside if they deliver on this "in the medium term" (personally though my investment case currently is more based on the fact that there is some upside in the current price even if they don't deliver on that.)

Anyway it's also worth noting that the 4% growth in 'digital' (from the October update) is not a homogeneous number. "Digital display and transactional" revenues grew by 14% (but slowing), whereas "classified digital" (effectively an extension of traditional print classifieds) was "under pressure". (my guess being about -15-20%).

I don't personally expect the December update to tell us too much more to join the dots on this ; but I do expect it to be a pretty much steady as she goes statement with a likely small beat on the FY profit number - dull and boring will do for me for now.

[cjohn] 23/10/2017 09:33

The digital business is of course important; it represents about 11% of total turnover.


What would its valuation be as a stand alone business? We'd really need to know what the profit margins are.

Some of the individual revenue streams within the rubric of digital come from pretty commoditised businesses.. Profit margins are going to be under pressure in those áreas of digital. And ultmately in all, I believe. There are not the same barriers to entry as in the declining analogue busienss.

The specialist digital división is really a collection of not very enticing businesses. Several, as I'm sure you are aware have been sold off or have folded.

The strongest point I'm tyring to make is that salvation - in terms of stabilising total revenue - willl not come from digital. TNI have got to go for intelligent diversification, however problematic that might be, as Philjeans has pointed out.

[gfrae] 23/10/2017 08:46

Cjohn,I take your point that digital is not growing as fast as many had hoped,but it is still a significant business to TNI and with turnover of £80million ,and presumably very high marginal profit, could itself justify a significant market cap.

[cjohn] 22/10/2017 17:13

Hi PhilJeans,

They have some years of life left, sweating the existing business and acting as a sector consolidator.

But to survive beyond that, they are going to have to diversify. That doesn't mean it will be easy to do it successfully. it won't. It will be easy to get it wrong, as you have pointed out

But as an example, they have dipped their toe in to events management. You can see how this connects to their existing advertising businesses and it may prove positive...or not.


BTW You say digital is "rapidly coming good". In fact, in the most recent update, digital growth rate is down to 4%. So it manifestly isn't coming good, either rapidly or very rapidly. I simply don't get the hype about digital. It should be judged and analysed like the other parts of the business.

Together, the digital businesses have a turnover of just over 80m sterling. The current digital growth rate implies an increase in revenue of about 3.5m sterling annually.

[ccraig69] 22/10/2017 13:21

I can see them being landlords in cities as a good route

[cityconindex] 20/10/2017 20:34

Phil on reflection you are right,
History proves your point cheers.

[gfrae] 20/10/2017 12:07

I agree,philjeans.

[cityconindex] 20/10/2017 11:40

Guardian have an obit on the deal.

[cjohn] 20/10/2017 11:21

Well-spotted, cityconindex. Thanks.

[cityconindex] 19/10/2017 16:08

Uncanny that today the Guardian has done just that, investing in companies to increase its earnings stream.

[cjohn] 19/10/2017 11:02

You have hit on a key point, Twixy, and one I've made several times on here.

In a sector in decline, there are serious barriers to entry. Precisely becasue of that decline, no one new wants to risk capital in a doomed sector. .We've seen at TNI itself the difficulty of establishing a new national newspaper, for example.)

So new competitiors are kept out. This means TNI's operating margins are very decent indeed. (It helps too that much of the property they opérate from is not leasehold, but freehold.)

The question is can they exploit this barren field successfully? They must be conslidators. The Express takeover makes good strategic sense.

But they've also got to find a path for diversification. So far, they've not come up with anything convincing.

[twixy] 19/10/2017 10:02

I would prefer they focus on the core business and consolidate in line with their stated strategy, which includes revenue growth in the 'medium term' - whether that is as a consolidator of print services or information provision or similar. The barriers to entry in the market are growing all the time, which can only benefit TNI.

[cityconindex] 18/10/2017 20:47

Kazoom Associated British Foods for eg own Primark nothing to do with Food. but earning good add on profits.

I am not saying Clothing specific, could be anything. Cut price computer maintenance or phone care etc.

[kazoom] 18/10/2017 19:57

Diversify how? And why?

[cityconindex] 18/10/2017 19:10

hxxp://investors.morningstar.com/ownership/shareholders-overview.html?t=TNI&region=gbr&culture=en-US

Here is the full listing of big share holders for viewing

Personally TNI should diversify in a couple of new ventures to bring on another income stream. With minimal investment.

[kazoom] 18/10/2017 18:35

So Aviva sold 4.8m shares.

The still have nearly 2.5 times that amount left.

This is the first sale they have made since April, so I would say it is not clear whether they are still selling right now or taking a breather again.

Conclusion of the trade is reported as 13-October and certainly there was an unusually high volume of shares traded that day 5.3m compared with a daily turnover that can be as low as 100k.

Two big trades featured on the 13th :

2,600,000 @ 84.25 marked as a "sell"
2,527,517 @ 84.46 marked as a "buy"

Additionally there was a big trade the following trading day (16-Oct)

2,643,312 @ 83.782 marked as a "buy"

These trades don't precisely add up to the right number in any combination, but I would guess they make up somehow the sale of the Aviva shares and the purchase of slightly more than half (just short of 1% of the total cap) of them by someone else (probably not the buyback programme as that is much smaller in size).

It is a little hard therefore to see what is going on, but from this it is not entirely obvious to me that the Aviva sale was the reason for the recent share price "weakness" (we've been trading below 90p for about 6 weeks and below a pound for over 2 months).

So whilst I would tentatively agree that if we know (or surmise) that Aviva want to sell the lot, every time they sell is "good news" in that it clears some of the overhang; I'm certainly not going to be swinging from the rafters at this news.

This is certainly not the sole or even main reason for the "low" share price (for those of us that believe it is in fact low).

As a predominantly "value investor" I know that I shouldn't really be interested in market sentiment and "fads", but nevertheless whilst I still think there is substantial value here on a "hold to infinity basis", I'm sorely tempted to conclude that there is no imminent trigger for revaluation and the same value I see today, might still well be available in a couple of years time.

Not trimming my position yet, but certainly thinking about it!