LONDON (Reuters) - Media group Trinity Mirror TNI.L is to start a 175 million pound share buyback programme following clearance from the pensions regulator for a return of capital to shareholders.
To secure clearance from the regulator, Trinity Mirror said on Wednesday it had agreed to make immediate one-off payments totalling 108 million pounds into the group’s pension schemes.
“We believe the cash return may be slightly higher than consensus expectations of around 150 million pounds and estimate that overall the disposals and cash return will be marginally accretive to earnings,” UBS analysts said in a research note.
The move follows Trinity Mirror’s review of the business and the sale of some assets including regional and sports titles.
The owner of the Daily Mirror tabloid said it was committed to funding the remaining deficits in its defined pension scheme — which bases payments on workers’ final salaries.
It said the 175 million pounds was more than 30 million pounds higher than the net proceeds from the disposals, after deduction of the pensions contribution, and reflected the board’s confidence in the group’s ongoing cashflows.
“The group’s strong balance sheet after this return of capital will provide continuing financial flexibility for investment to create shareholder value going forward,” the company said.
Trinity shares eased 0.2 percent to 337.75 pence by 8:48 a.m. when the DJ Stoxx European media index .SXMP was up 0.2 percent.
Reporting by Kate Holton; additional reporting by Gavin Haycock; Editing by Louise Ireland