Mirror looks for new acquisitions to boost growth

MIRROR Group, the newspaper and television company, said yesterday it was interested in making bolt-on acquisitions to boost its growth, particularly in its magazines and exhibitions business.

"There is still plenty of room for seeking out possible acquisitions or disposals," John Allwood, the finance director, said after the company reported annual results. Mirror said underlying pre-tax profits rose 12 per cent to pounds 92m, boosted by growth at its regional and national newspaper operations, in line with analysts' forecasts of pounds 89-94m.

Although Mr Allwood said Mirror was interested in making further acquisitions, he added that the company also had strong organic growth prospects. He said the size of any acquisition would be limited by the company's gearing level of 89 per cent after last year's pounds 300m acquisition of regional group Midland Independent Newspapers.

But the group declined to comment on reports that it plans to sell its 46 per cent stake in Newspaper Publishing, owner of The Independent and Independent on Sunday, to Independent Newspapers, the Irish media company that also has a 46 per cent stake.

David Montgomery, the chief executive, attributed the profit rise to strong results at The Mirror and Midland Independent, as well as increased trading profits from its magazines and exhibitions operations, that enjoyed strong growth, with pro forma operating profits rising 25 per cent to pounds 5m for the year.

Mirror has increased investments in television and regional newspapers to reduce its reliance on national papers, and last week confirmed it was in talks with Independent Newspapers over its stake in Newspaper Publishing.

Mr Montgomery said the Mirror's continuing makeover had paid off by gaining market share against The Sun, the UK's biggest-selling daily, owned by Rupert Murdoch's News Corp.

He also predicted better-than-expected cost savings from its pounds 300m acquisition of Midland Independent Newspapers. The group had initially expected cost savings of pounds 5m for the first full year after the acquisition.

"The figures were in line with expectations," said Lorna Tilbian, an analyst at Panmure Gordon & Co. "It's a very cheap stock, we've got a fair value of 250p." Mirror said advertising revenue at its national newspapers rose 6 per cent in 1997 and its television operations - which include Live TV and six city stations - are "making good progress" towards breaking even.

Mirror Group's shares closed up 7p at 186p.