Tag Archives: Trinity Mirror

First Group (FGP) Half year results Wednesday

A little rally from FGP in the last couple of days as we get closer to half year results on Wednesday. I bought these after their drop on news their West Coast franchise win had been revoked due to problems with the bid process. The drop seemed too much and at 190p seems to be the floor for the past 6 months. Forecast EPS puts them on a low P/E rating of around 6.9 which seems too low for a very large profit making company. The yield is large and in the last trading statement 2nd October the board affirms its commitment to continue increasing dividend by 7%.

“…the Board remains committed to its current policy of dividend growth of 7.0% through to the end of the financial year 2012/13.”

This was said only a month before half year results and declaration of the interim dividend. The risk of course is that with lower profits the dividend cover has dropped. Historically it looks like it’s been covered about twice over, at present this looks to be about only 25-30% cover.  I am hoping for half year results in line with expectations and a dividend increase of 7% maintained.

Prudent management perhaps would focus on paying back some of the large debt rather than maintaining a progressive dividend policy. Perhaps this signals management confidence. Either way I am looking for a rise over the next month before I sell.

Also, Trinity Mirror (TNI) interim management statement on Thursday. I want to buy and I’m confident long term holders of TNI will make a profit…I’d just rather try and judge how low the share price might go with regard to the phone hacking allegations. I will do some more thinking today about buying in before a potentially bullish management statement on Thursday.

Trinity Mirror (TNI) – Superb value, just when to buy?

A favourite value share amongst private investors is Trinity Mirror – owner of the Mirror newspaper and various regionals.

The share price has languished in the twenties this year before taking off and reaching the seventies. The funny thing is, this company is still stupidly cheap with a P/E of just over 2! A great write up can be found here, it’s a little old but the value case still holds true. So why not pile in?

My only quibble is the emergence of phone hacking allegations against the company. Until now TNI has not been prosecuted of sued for these claims. Very recently a lawyer has launched civil claims representing a handful of minor celebrities against TNI. The financial damage is likely to be small, especially when compared to TNI’s cash flow but the fresh allegations sent the share price down 20%. It has since recovered most of that but I am nervous to buy in now, knowing that developments in these allegations could present even better buying opportunities in the coming months.

I’m waiting on the sidelines with interest.