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Regional newspapers add shine to Mirror results.

A strong performance in Mirror Group's regional newspaper operations, which include The Birmingham Post, contributed to a nine per cent rise in annual profits, the company revealed yesterday.

Mirror acquired Midland Independent Newspapers, publishers of The Post, Evening Mail and The Coventry Evening Telegraph, in 1997.

Yesterday's results - annual profits before tax and exceptional items climbed to pounds 100 million - include a full 12-month contribution from MIN and show advertising revenues reaching record levels in both Birmingham and Coventry.

Chief executive Mr John Allwood, who took over after the resignation of Mr David Montgomery in January, said the MIN titles had exceeded targets set out at the time of acquisition. He added that the current year had started well.

"Regional classified advertising is broadly in line with last year.

"We have seen some local reduction in recruitment advertising, but this has been more than offset by the strength of our other revenue streams."

Changes at The Post included the addition of two supplements to the Saturday paper, a new property section on Fridays, and the redesign of Wednesday's Post Style section, all of which boosted advertising and circulation, Mr Allwood said.

Mr Allwood also revealed plans to sell the group's 18.6 per cent holding in Scottish Media Group and Mirror's former headquarters site in central London. The moves will raise pounds 150 million to reinvest on the group's core national titles.

Analysts said the moves would increase Mirror's appeal to bidders. So far it has received offers from two regional newspaper groups, Trinity and Regional Independent Media. On Monday the Trinity bid valued Mirror at 210p per share, trumping RIM's previous offer of 200p a share in cash.

Gains in the Trinity share price since Monday mean its cash and shares offer has appreciated. Based on its 506p per share price yesterday the Trinity bid is now worth 217p per share, although this is still seen as inadequate by the Mirror board.

Mr Allwood repeated his view that neither bid represented a sufficient premium for control of Mirror.

Since an offer by Trinity or RIM would be subject to a routine regulatory review, it could be up to six months before any formal bid would be made to shareholders, Mr Allwood added. "There is no certainty that either of these companies will come back to us with an acceptable price at the end of the day. We are therefore running the company as an on-going independent company," Mr Allwood said.

He reported that the current year has started well, with trading in line with budget and national advertising ahead of expectations.

Mr Allwood said Mirror expects its non-core cable TV unit, MirrorTel, to break even next year. The company has meanwhile shelved plans to relaunch the Sporting Life newspaper.

"We're cleaning up some of the untidy bits in the group and we are then concentrating on developing our core businesses, which means that The Mirror and the national tabloids remain very strong," he said.
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Title Annotation:National
Author:City, GUY DRESSER
Publication:The Birmingham Post (England)
Date:Mar 5, 1999
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