Trinity Mirror suffers in comparisons with Rightmove, a web-only upstart now worth six times as much as the newspaper group
Company A employs 6,500 people and owns five national newspapers, 160 regional newspapers and 500 websites. Company B has 312 staff and one website. Question: which company has a stock market valuation six times greater than the other?
Nul points if you said A. That is Trinity Mirror, where the share price fell 22% on Thursday as a dividend failed to reappear; the market capitalisation is now a mere �160m. Company B is Rightmove, a web-only business where estate agents list houses for sale. The 10-year-old upstart is worth a cool �1bn ? call it the value of a service that negates the need to advertise in local newspapers such as Trinity's.
A comparison of market capitalisations is, of course, distorted by Trinity's borrowings of �266m and the deficit in its pension fund of �161m. But those facts are also terribly relevant ? they are reasons why Sly Bailey, the long-serving chief executive, feels she can't yet restore a dividend prop for the shares. Until she does, her warning about the UK economy's "volatile and slow" recovery will feel like a comment about Trinity itself.
Source: http://www.guardian.co.uk/business/2011/mar/03/viewpoint-trinity-mirror-rightmove-economy
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