Tumbling Share Prices See Trinity Mirror and Johnston Press Fall From FTSE 250

They were two of the country’s biggest publishing companies and both were known for returning high margins to shareholders and investors. But now Trinity Mirror (LSE: TNI) and Johnston Press are set to fall out of the FTSE 250 list of the country’s most valuable companies after months of ever-decreasing share prices and huge revenue losses. Trinity exited the FTSE 100 index of blue chip stocks in September and as Guardian.co.uk reports, a London Stock Exchange Committee is meeting this afternoon to decide whether it and Johnston deserve relegating further, based on their overall value. UK-listed European newspaper publisher Mecom also faces ejection from the FTSE 250.

The drop in these companies’ fortunes is staggering. Trinity’s shares closed at 56p today, a seventh of the 52-week high price of £3.54, ten times less than the March 2007 price. As for Johnston, its shares have in recent weeks fallen to as low as 7.15p but closed trading today at 12p — quite a reduction from its April 2007 price of £4.84. Both have invested millions in transforming their newsrooms, re-training journalists and making the transition to online publishing as print circulation races downward. Like Newsquest and DMGT, they are both cost-cutting, reducing headcount and unnecessary outgoings, partly in response to the economy and partly as an acknowledgment that old-style, once-a-day newspaper publishing is over.

But one thing is clear from looking at the companies’ earnings: while digital revenue growth is expanding, the rate of growth is not nearly enough to replace the money lost from print classifieds and display advertising — and that’s the main reason why their stock continues to fall. Daily Mail (LSE: DMGT) and General Trust, considered by many in the City to be more robust due to its non-print assets and B2B titles, remains a FTSE 250 company but was itself relegated from the FTSE 100 a year ago.

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