View from City Road: Burden lifted from MGN

AS A business, ignoring all the frauds and thefts, Mirror Group Newspapers is doing a lot better without Robert Maxwell. True, as predicted in these pages in August, the group made a tactical error by increasing the Daily Mirror's cover price in July. But Maxwell was a poor manager, cutting costs in unsubtle ways and having little idea how to build revenue. Without him, MGN should be able to develop the company to be one of the UK's premier newspaper publishing groups.

The trouble is that 54 per cent of MGN's shares are in the hands of Arthur Andersen, the administrator of the Maxwell private companies. And though it has to sell the stake eventually, thus giving control to someone else, Andersen is giving no indication of selling in the short term. The management of MGN live in constant fear of a new buyer who will get rid of them all when he takes over. This does not make for progressive management, and the group seems to be letting its minor titles such as the Sunday People drift while it clings on to Maxwell era initiatives, such as the pounds 113m Anderston Quay printing works project in Glasgow.

The group's half-year results seem to show a company breathing a sigh of relief that a weight has been taken from its back. Operating profits of pounds 49.4m comfortably cover the interest charge of pounds 22.9m and a pounds 9m contribution to the pension funds.

This leaves pre-tax profits of pounds 15.3m, earnings of 2.6p, but no dividend, as MGN's bankers will not allow one. There are no sensible figures to compare these with from last year.

In the second half of the year MGN will have the benefit of the Mirror price rise, despite its depressing effect on circulation, and pre-tax profits should rise to at least pounds 35m, giving earnings of about 6p a share. Simply multiplying this by 15 to give a slight market premium would push the shares to 90p, compared with 63p, down 2p, where they stood yesterday.

At 90p the group would be worth pounds 370m. But any purchaser would have to refinance the company's pounds 260m of debts, insecure in the knowledge that MGN's cash position will deteriorate due to the Anderston Quay investment. Anyone buying for an eventual bid may have to be patient.

Start your day with The Independent, sign up for daily news emails
Sport
tennisLive: Follow all the updates from Melbourne as Murray faces Czech Tomas Berdych in the semi-final
Arts and Entertainment
'The Archers' has an audience of about five million
radioA growing number of listeners are voicing their discontent; so loudly that even the BBC's director-general seems worried
Arts and Entertainment
Henry VIII played by Damien Lewis
tvReview: Scheming queens-in-waiting, tangled lines of succession and men of lowly birth rising to power – sound familiar?
Arts and Entertainment
Taylor Swift is applying to trademark song lyrics from 1989
musicYou'll have to ask Taylor Swift first
PROMOTED VIDEO
News
Joel Grey, now 82, won several awards for his role in Cabaret
people
Sport
Harry Kane celebrates scoring the opening goal for Spurs
footballLive: All the latest transfer news as deadline day looms
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker
Why the league system no longer measures up

League system no longer measures up

Jon Coles, former head of standards at the Department of Education, used to be in charge of school performance rankings. He explains how he would reform the system
Valentine's Day cards: 5 best online card shops

Don't leave it to the petrol station: The best online card shops for Valentine's Day

Can't find a card you like on the high street? Try one of these sites for individual, personalised options, whatever your taste
Diego Costa: Devil in blue who upsets defences is a reminder of what Liverpool have lost

Devil in blue Costa is a reminder of what Liverpool have lost

The Reds are desperately missing Luis Suarez, says Ian Herbert
Ashley Giles: 'I'll watch England – but not as a fan'

Ashley Giles: 'I'll watch England – but not as a fan'

Former one-day coach says he will ‘observe’ their World Cup games – but ‘won’t be jumping up and down’
Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness