Trinity Mirror plc (LON:TNI) (LSE:TNI.L) has released a trading update today. It continues to make good progress against its strategic initiatives and is confident that performance for the full year will be marginally ahead of expectations. It anticipates that its profitability and strong cash flows will cause net debt to decline to around £35 million by year end. This is much better than forecasts.
LFL revenue is forecast to fall by below 8% in Q4 compared to a decline of 9% in Q3. Publishing revenue is due to slide by 8% in Q4, with print declining by 10% and digital growing by 8%. Print advertising and circulation sales are anticipated to fall by 17% and 5% respectively. Although classified digital revenues are still under pressure, Trinity Mirror expects to record strong growth in digital display and transactional revenue of 18%.
Under the £10 million share buyback scheme announced in August, 2.5 million shares have been acquired by the company. It has also disposed of its office building in Cardiff for a sum of £7.8 million.
Over 80% of civil claims from phone hacking have been settled. However, provisions for these historic matters have risen to £11.5 million, but they are not expected to undermine the delivery of the company’s strategy.
Trinity Mirror currently yields 6.9%, which is ahead of a number of popular dividend shares. For example, it is a higher yield than those offered by Aviva plc (LON:AV) (LSE:AV.L), National Grid plc (LON:NG) (LSE:NG.L), Imperial Brands PLC (LON:IMB) (LSE:IMB.L) and Lloyds Banking Group PLC (LON:LLOY) (LSE:LLOY.L). National Grid yields 4.8%, Imperial Brands has a yield of 5.1%, Aviva’s yield is 4.9% and Lloyds currently yields 5.1%.
In my view, Trinity Mirror has appeal as an income stock. However, its higher yield must be balanced against the challenges it faces as a business, particularly in its Print division. Therefore, I feel that there are more reliable dividends available elsewhere, but that Trinity Mirror continues to offer long term appeal from an income perspective.