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Trinity Mirror writes down value of regional titles

Newspaper publisher Trinity Mirror has written down the value of a series of regional titles it bought in the mid-1990s by hundreds of millions pounds.

The company’s financial results for 2013 will include two large non cash impairment charges of £700m and £225m due to thje fact that some of its assets are now worth substantially less than the company paid for them.

The group said the impairment charges related to the prior acquisitions by the then Trinity Plc of Thomson Regional Newspapers in 1995 and the subsequent merger of Trinity plc and Mirror Group plc in 1999.

While the regional titles included in the deal remain profitable, the charges reflect their loss of value in the 19 years since they were originally purchased.

Titles which were sold to Trinity as part of the Thomson deal included the Western Mail, South Wales Echo, Newcastle Evening Chronicle, The Journal and Teesside Evening Gazette.

The write-down of the assets was made after an annual review by Trinity Mirror and its statement said this had been affected by a “change in assumptions” around certain figures.

The £225m impairment charge will not impact on the group’s adjusted results when they are released next month but will reduce its statutory profits.

And the £700m impairment charge will result in a negative profit and loss account reserve of £520m in the company’s balance sheet – but will not affect statutory or adjusted financial results for 2013.

The statement by the company yesterday ahead of its full 2013 results due next month show that operating profits are expected to be around 4pc ahead of market expectations.

It also showed that digital revenues for its publishing division were up 32pc year-on-year in November and December and that the company expects to make cost savings of £10m this year.

Chief executive Simon Fox said: “I am pleased with the Group’s performance for 2013, which is ahead of our expectations following a better than anticipated end to the year.

“The impairment charges are driven by technical accounting requirements. 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. In the meantime trading for the start of 2014 is in line with our expectations.”