* Full-year adjusted earnings per share up 12 pct
* Print revenue down 10.7 pct, digital revenue up 12.8 pct
* says print markets volatile and challenging
* Shares fall 5 pct
(Adds CEO comments, analyst reaction, shares)
By Paul Sandle
LONDON, Feb 27 British newspaper group Trinity
Mirror said it would focus on growing its digital
advertising sales to cope with "challenging and volatile"
markets after reporting a 10.7 percent drop in full-year print
The owner of the Daily Mirror, which has been ripping out
costs to counter the fall in circulation and print advertising,
saw particularly weak demand from retail customers for display
ads, and a drop in classified recruitment postings.
Trinity, which also publishes the Sunday Mirror and The
People, said print markets were challenging and volatile.
"The print environment is challenging, we are under no
illusions about that," Chief Executive Simon Fox said. "But we
continue to do a good job of managing the business as
efficiently as we can."
January and February offered no respite, with like-for-like
revenue expected to fall 9 percent, it said, a deterioration on
the roughly 7 percent drop in the final quarter of 2016.
Fox, however, said it was a relatively short period and not
an especially significant part of the year. "We are where we
expect to be at this stage of 2017," he said in an interview.
Cost control and the acquisition of more local newspapers
enabled Trinity to post a 12 percent rise in adjusted earnings
per share and to say it was confident it would deliver
sustainable growth in revenue, profit and cash flow over the
Shares in the group, which have climbed 39 percent from
four-year lows in July, were trading 4 percent lower at 113.5
pence at 1145 GMT.
Barclays, which has an "equal weight" rating on the shares,
said it was impressed by the performance on reducing debt.
"We have concerns, however, that print advertising can
deteriorate further, given the power of Facebook and Google, and
we struggle to pin down where revenues can go and whether
declines could still be offset by savings," the bank said.
Fox said he had set some "stretching" targets, including at
least 15 percent growth in digital revenue growth, and print
advertising at least in line with national market trends.
The publisher would have missed both targets last year, but
Fox said growth in digital display advertising would boost
numbers this year, and he saw opportunities to do more in video.
Fox said Trinity Mirror had withdrawn from talks on an
industry-wide initiative to collaborate on ad sales.
The company is pursuing a tie-up with Richard Desmond's
titles, including the Daily Express and Daily Star, as revealed
Fox had no update on the talks, but he said Trinity had a
strong track record in integrating acquisitions.
"We are good consolidators, we know how to make the most of
common back office, and if similar organisations come together
there are opportunities," he said.
(Additional reporting by Kate Holton, editing by Louise Heavens
and Susan Thomas)