'Daily Mirror' may be put up for sale by Trinity

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The Independent Online

Sly Bailey, the chief executive of Trinity Mirror, has opened the door for a long-awaited sale of the company's flagship national newspaper titles, the Daily Mirror and Sunday Mirror, after launching an "all-encompassing" review of its operations.

Ms Bailey said it was too early to speculate about whether the company will decide to split its regional and national publishing assets, but a sale of its troubled Mirror titles is now a definite possibility. "We do not rule anything in, we do not rule anything out. It is time for a good hard look at what we do," she said. Ms Bailey argued there was no single catalyst for the review and added there have been no approaches from another party to buy either of its divisions. "This is about us being on the front foot," she said, adding that the review will be complete by the end of the year.

Trinity Mirror has long refused to entertain the prospect of a sale of its Mirror titles, which also include The People, despite pressure from investors. Yet the departure of former chairman Sir Victor Blank, who fervently rejected the notion of unwinding the 1999 merger of Trinity's regional titles and the national Mirror papers, is believed to be a factor in clearing the path for a potential break-up of the company.

Like many of its peers, Trinity Mirror has struggled to cope with a marked downturn in advertising spend as circulation has fallen and more classified advertising has moved to the internet. Ms Bailey added that slowing GDP growth, sluggish consumer spending and higher unemployment rates have also hindered its progress. Excluding acquisitions, Trinity Mirror's revenue fell 7 per cent during the first half of the year, while pre-tax profit decreased 13 per cent to £98.1m.

The company also booked an impairment charge of £250m related to the carrying value of its regional titles that recorded a near 10 per cent decline in advertising revenue. Numis Securities said: "Clearly a write-down of this magnitude is negative, particularly as it follows on from Daily Mail General Trust's decision to sell its regional portfolio, which was subsequently pulled when the offers failed to meet expectations."

Ms Bailey's strategy has been to rapidly reduce its cost base, with £16.7m sliced out in the first half alone. A major part of the strategic review will be to reduce costs further but Ms Bailey argued any action would be more focused on improving efficiency as opposed to significant job cuts. While cutting costs, Trinity Mirror has been investing heavily in online advertising. It has launched or purchased 227 websites over the past eight months, predominantly in the regional classified advertising sector for the recruitment, property and motoring markets.

Bridgewell Securities said in a note that the review would "crucially reignite speculative M&A interest. Certainly a Trinity Mirror excluding national newspapers is more attractive to the venture capital community than it is at present".