TRINITY MIRROR is facing a £925m impairment hit, as it revalues its assets and investments.
The Daily Mirror publisher, in its trading update on performance in the last calendar year, revealed a £225m impairment charge for its goodwill and intangible assets.
It also faces a £700m impairment for the discount rate increasing on the assumption value of its investment in subsidiaries. The impairment would result in a negative balance on the profit and loss account of £520m.
The publisher will seek a court-approved capital reduction to eliminate the deficit on the company’s P&L after announcing its audited results for 2013, in order to “maintain future flexibility” to consider the return of capital to shareholders.
The impairment charges do not impact Trinity Mirror’s financial covenants.
“The impairment charges are driven by technical accounting requirements,” said Trinity Mirror chief executive Simon Fox in the stock exchange statement. “They do not relate to or impact the progress we are making with our strategy and I continue to believe that the business has significant long term potential.”
Aside from the impairments, trading in the last two months of the year was better than expected, with digital revenues increasing 32% – expectations for the group’s performance in 2014 remain unchanged.
Its share price has climbed ten pence in this morning’s trading, to 185.5 pence, valuing the company at £478m.
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