Trinity Mirror falls from grace

Andy Viner, Head of Media, at BDO talks about media companies removal from the FTSE in the quarterly reshuffle:

“Given the volatility of Trinity Mirror’s share price over the past few months, it is little wonder that they join a number of other companies in being relegated from the FTSE 250.

“Trinity appears to have been hit by a ‘quadruple whammy’ of significant declines in classified advertising, the impact of the move towards digital advertising, the downturn in consumer spending which is limiting opportunities to increase cover priced and lastly a fall in circulation figures.”

“Trinity Mirror has tried to rectify the situation by undergoing a restructure which has included cutting jobs, but the question is – will this be enough?” he continues.

“Newspapers have been hit particularly hard by the current climate and many are seeing declines in advertising of up to 20 per cent.  2009 looks set to bring little relief with many media companies battening down the hatches to prepare for further declines in advertising,” warns Viner.

“The industry is currently in a cyclical decline and quite probably long term structural decline. Therefore, we would expect some defensive consolidation in the near future - provided the competition authorities would allow such a move,” concludes Viner.

ENDS

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