Trinity rides regional newspaper upswing

The City has warmed to regional newspaper groups and yesterday's first-half results from Trinity International Holdings, the UK's biggest regional newspaper publisher, should have helped this confidence. But, as Cathy Newman reports, there are fears the advertising boom has peaked.
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Trinity, which owns titles such as the Liverpool Echo and the Chester Chronicle, beat analysts' expectations to turn in a 34 per cent increase in pre-tax profits to pounds 32m for the six months to the end of June.

Philip Graf, chief executive, said lower newsprint prices and strong advertising revenues had helped. But he added a note of caution about future advertising growth. "This year we've grown 10 per cent in advertising in the first half," he said. "I don't see that continuing next year." Mr Graf said he anticipated 4 per cent growth in 1998.

His comments, and City analysts' feelings that the advertising cycle may have peaked, sent the shares 2 per cent lower to close at 492p.

Mr Graf, who engineered the pounds 328m purchase of Thomson Regional Newspapers two years ago, said he remained ambitious about acquisitions. "I would hope we have the track record to do another Thomson-style acquisition if the opportunity arose," he added.

Analysts said Trinity could be interested in United Provincial Newspapers (UPN), the regional newspaper division of United News & Media.

Newsquest Media Group, which comes to the market later this year, said earlier this week it would look at UPN if it came up for sale.

Trinity said it had reinvested some of the costs saved on newsprint back into the business to improve the editorial product. The group has been experimenting with cutting the cover-prices in Belfast and south Wales to boost circulation. Mr Graf said that although weekly newspaper circulations were "on a par with or ahead of last year", daily circulation was "not as good as we would have wished".

He added that a strategic review of the group's American business would be complete by the end of the year. Analysts have been concerned about the future direction of the division, and some have hoped Trinity would focus on the UK. The company sold its Canadian newspapers at the beginning of the year.

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