Annual Results for 52 weeks ended 27 December 2015

RNS Number : 4146Q

Trinity Mirror PLC

29 February 2016

Annual Results Announcement

For the 52 weeks ended 27 December 2015

Key Highlights

· Increase in adjusted ⁽¹⁾ operating profit, profit before tax and earnings per share

Adjusted operating profit grew by 3.9%, adjusted profit before tax grew by 5.1% and adjusted earnings per share grew by 3.4% as a result of strong cost control including structural cost savings of £20 million.

Group revenue fell by 6.9% with underlying ⁽²⁾ revenue falling by 7.8%. Underlying publishing digital revenue grew by 21.9% and underlying publishing print revenue fell by 9.5%.

· Continued growth in digital audience and revenue

Excluding Local World, average monthly unique users and average monthly page views ⁽³⁾ grew year on year by 34% to 98 million and by 42% to 725 million respectively. Underlying publishing digital revenue grew by 21.9% with display advertising and other revenue growing by 32.6% and 38.5% respectively partially offset by classified advertising falling by 3.8%.

· Acquisition of Local World

The Group completed the acquisition of the 80.02% of Local World not previously owned on 13 November 2015 at an implied enterprise value for 100% of £220 million. Local World revenue and adjusted operating profit for the full year 2015 were £208.2 million and £41.4 million respectively. The Board has also concluded not to proceed with the on sale of certain titles of Local World which was announced at the time of the acquisition.

· Provision for dealing with historical legal issues

Provision charged in the year of £29 million in relation to the civil claims arising from phone hacking. Criminal investigations against journalists and the Group's subsidiary, MGN Limited, have ceased.

· Strong cash generation

Strong net cash inflows of £63.8 million before net cash payments relating to the acquisition of Local World of £137.4 million. Net debt ⁽⁴⁾ increased by £73.6 million to £92.9 million.

· Board proposes a final dividend of 3.15 pence per share

A final dividend of 3.15 pence per share is proposed bringing the total dividend for 2015 to 5.15 pence per share (2014: final dividend of 3.00 pence per share).

· Strategy remains on track and good progress is being made on integration of Local World

Our strategy remains to grow digital audience and revenue whilst protecting print revenue and supporting profits through the tight management of the cost base. In addition we are making good progress with the integration of Local World. We have targeted structural cost savings of £15 million, including synergy savings, in 2016.

Results	Adjusted results ⁽¹⁾		Statutory results
	2015	2014	2015	2014
	£m	£m	£m	£m
Revenue - actual	592.7	636.3	592.7	636.3
Revenue - underlying ⁽²⁾	572.1	620.7	-	-
Operating profit	109.6	105.5	82.2	98.6
Profit before tax	107.5	102.3	67.2	81.6
Earnings per share	33.9p	32.8p	30.2p	28.1p
Dividends per share	-	-	5.15p	3.00p

(1) Adjusted items relate to the exclusion of non-recurring items, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the pension administrative expenses, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the impact of tax legislation changes. Set out in note 17 is the reconciliation between the statutory results and the adjusted results.

(2) Underlying revenue excludes revenue from Local World in 2015 (£20.6 million being external revenue of Local World of £21.2 million less £0.6 million now being accounted for as internal printing revenue) and in 2014 from title closures in the South (£4.5 million) and newsprint supply to the Independent and i (£11.1 million) which ceased at the end of 2014.

(3) Average monthly unique users and page views for the Publishing division (excluding Local World) across web, mobile and apps for January to December 2015 versus January to December 2014.

(4) On a contracted basis assuming that the private placement loan notes and related cross-currency interest rate swap is not terminated prior to maturity.

Commenting on the annual results for 2015, Simon Fox, Chief Executive, Trinity Mirror plc, said:

"I am pleased with the profit growth we delivered in 2015 despite the challenging print environment.

Our significant efforts on improving our balance sheet over the past three years enabled the transformational acquisition of Local World. We are delighted to welcome the Local World team to Trinity Mirror and are making good progress with the integration of the two companies and finding opportunities to benefit from best practice.

Whilst we expect print markets to remain difficult in 2016, the continued implementation of our strategy gives the Board confidence in our performance for the year ahead.

We have today launched, The New Day. It is an exciting and innovative initiative which we believe fills a gap in the market for a daily newspaper designed to co-exist in a digital age."

Enquiries

Trinity Mirror

Simon Fox, Chief Executive 020 7293 3553

Vijay Vaghela, Group Finance Director 020 7293 3553

Brunswick

Mike Smith, Partner 020 7404 5959

Jon Drage, Director 020 7404 5959

Investor presentation

A presentation for analysts will be held at 9.30am on Monday 29 February 2016. The presentation will be live on our website: www.trinitymirror.com at 9.30am and a playback will be available from 2.00pm.

Annual Report

The Annual Report for the 52 weeks ended 27 December 2015 is available on the Company's website at www.trinitymirror.com and at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP and will be sent to shareholders who have elected to receive a hard copy by the end of March 2016.

Statutory and adjusted basis

In the Management Report, performance is stated on an adjusted basis to provide a more meaningful comparison of the Group's performance. The adjusted results aim to demonstrate the performance of the Group without the volatility created by non-recurring items, restructuring charges in respect of cost reduction measures and accounting items such as the amortisation of intangible assets, the pension administrative expenses, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the impact of tax legislation changes. Set out in note 17 is the reconciliation between the statutory results and the adjusted results.

Underlying revenue trend

The year on year revenue trends are distorted by the closure of a number of regional titles in the South and the cessation of the newsprint supply agreement for the Independent and i print contract at the end of 2014 and by the acquisition of Local World on 13 November 2015. The titles closed in the South and the newsprint supply to the Independent and i contributed revenue of £4.5 million and £11.1 million respectively in 2014. Local World post acquisition contributed revenue of £20.6 million (external revenue of Local World of £21.2 million less £0.6 million now being accounted for as internal printing revenue). Underlying trends exclude these items.

Forward looking statements

Statements contained in this Annual Results Announcement are based on the knowledge and information available to the Company's directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Annual Results Announcement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Annual Results Announcement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward-looking statements.

Management Report

Operational Performance

The Group delivered a robust performance in 2015 despite print markets being more challenging than expected. Strong cost control including structural cost savings of £20 million and the acquisition of Local World resulted in adjusted operating profit up 3.9%, adjusted profit before tax up 5.1% and adjusted earnings per share up 3.4%.

Group revenue fell by 6.9%. Underlying revenue declined by 7.8% with publishing digital revenue growing by 21.9% and publishing print revenue declining by 9.5%. Increased volatility and challenges in print advertising markets were driven by a slowdown in retail spend, in particular from supermarkets, but we also saw reduced spend in the telecoms, motors and entertainment categories. Strong digital audience growth drove increased publishing digital revenues.

The Group completed the acquisition of the 80.02% of Local World not previously owned on 13 November 2015. Total consideration of £183.0 million was funded through £34.5 million raised from placing 22.4 million shares, £5.9 million from the issue of 3.4 million of shares as part consideration, £80.0 million from a new 5 year term loan, £57.4 million from cash balances in 2015 with the balancing £5.2 million outstanding at the reporting date. A reconciliation of the total consideration to the implied enterprise value for 100% of £220.0 million is shown in note 16. Local World revenue and adjusted operating profit for the full year 2015 were £208.2 million and £41.4 million respectively, with the revenue and adjusted operating profit post acquisition being £21.2 million and £2.7 million respectively.

The benefit of structural cost savings of £20.0 million and the cessation of newsprint supply to the Independent and i of £11.1 million together with cost mitigation actions and lower newsprint prices have contributed to a material reduction in adjusted operating costs.

Our adjusted share of results of associates fell by £0.1 million to £6.0 million with Local World falling by £0.1 million to £5.1 million and PA Group in line with the prior year at £0.9 million. Our adjusted share of results of Local World would have been £5.5 million if we had not acquired the remaining 80.02% on 13 November 2015. Dividends from associates of £16.3 million were received in the first half of the year comprising £12.0 million from Local World and £4.3 million from PA Group.

Cost savings exceeded the reduction in revenue and this together with the contribution from Local World post acquisition, delivered an increase in adjusted operating profit of £4.1 million or 3.9%.

Adjusted earnings per share increased by 1.1 pence or 3.4% with the impact of the higher adjusted operating profit, lower interest costs and the benefit of a fall in the rate of corporation tax being partially offset by the issue of shares for the acquisition of Local World.

Statutory operating profit fell by £16.4 million to £82.2 million being impacted by restructuring charges in respect of cost reduction measures of £15.3 million and a non-recurring charge of £5.7 million compared to restructuring charges in respect of cost reduction measures of £14.0 million and a non-recurring credit of £15.2 million in the prior year.

Non-recurring items in 2015 comprised a £29.0 million increase in the provision for dealing with and resolving civil claims arising from phone hacking, transaction costs in relation to the acquisition of Local World of £5.6 million, a £3.4 million charge relating to the closure of two print plants and our share of non-recurring items in associates of £1.3 million substantially offset by a £33.6 million gain on the accounting deemed disposal of the 19.98% interest in Local World on 13 November 2015.

Although statutory profit before tax fell year on year, statutory earnings per share increased by 2.1 pence to 30.2 pence benefiting from a £17.2 million deferred tax credit from the announced reduction in future corporation tax rates.

Financial Flexibility

Net debt on a contracted basis was £92.9 million, an increase of £73.6 million over the £19.3 million at the prior year end. The Group generated net cash inflows of £63.8 million before the net cash payments of £137.4 million relating to the acquisition of Local World.

Contracted debt comprised the outstanding US$ denominated private placement loan notes totalling £68.3 million which are not due for repayment until June 2017 and the £80.0 million amortising term loan entered into in connection with the acquisition of Local World which has the first repayment of £15.0 million in October 2016.

The deficit on the defined benefit pension schemes increased marginally by £4.0 million from £301.2 million to £305.2 million. Net of deferred tax the deficit is £250.2 million. The Group made contributions of £20.0 million to fund pension scheme deficits in 2015 (having pre paid contributions of £16.5 million in 2014) and payments of £35.7 million are expected in 2016 (having pre paid contributions of £0.5 million in 2014).

The strong cash flows of the Group provide continued financial flexibility to pay dividends and pursue investment opportunities alongside appropriately funding the deficits in the pension schemes.

Dividends

A final dividend of 3.15 pence per ordinary share is proposed bringing the total dividend for 2015 to 5.15 pence per ordinary share. This is in line with the dividend policy aligned to the free cash generation of the Group and the investment required to deliver sustainable growth in revenue and profit over the medium term. The final dividend for 2015 will be paid on 10 June 2016 to shareholders on the register on 13 May 2016.

Historical Legal Issues

As previously announced we have charged a provision of £29.0 million in 2015 for dealing with and resolving civil claims arising from phone hacking. This comprises a £16.0 million charge on 21 May 2015 following the judgment of Mr Justice Mann and a £13.0 million charge on 17 December 2015 following the judgment of the Court of Appeal.

The judgment released on 17 December 2015 by the Court of Appeal upheld the judgment handed down by Mr Justice Mann on 20 May 2015 following the conclusion of the civil trial for the assessment of damages for eight representative claimants arising from phone hacking. We continue to believe that the basis used for calculating damages is incorrect and have applied for permission to appeal to the Supreme Court the judgment of the Court of Appeal in relation to civil claims arising from phone hacking.

The Group has been notified that all criminal investigations against journalists and the Group's subsidiary, MGN Limited, have ceased.

Although there remains uncertainty as to how these matters will progress, the Board remains confident that the exposures arising from these historic events are manageable and do not undermine the delivery of the Group's strategy.

Outlook

Our strategy remains on track and the Group is making good progress with the integration of Local World. The Group continues to focus on digital investment and growth whilst protecting print revenue and supporting profits through the tight management of the cost base. We have targeted structural cost savings of £15 million, including synergy savings, in 2016.

Revenue in the first two months, including Local World, increased by 24%. On a like for like basis, assuming Local World was owned from the beginning of 2015, revenue fell by 9%. Whilst print markets, in particular advertising revenue trends, are expected to remain challenging, the delivery of our strategy provides the Board with confidence in the Group's performance for 2016.

The launch of our new national newspaper, The New Day, is an exciting and innovative initiative which builds on our confidence in print media. If successful, the title is expected to move into profit by the end of the year. We will provide regular updates on this investment as we progress through the year.

2016 will be a 53 week year with an additional weeks trading accounted for in the first half of the year.

Strategic Update

We continue to make progress towards delivering our vision of being "a dynamic and growing media business that is an essential part of our customers' daily lives". Our strategic objective to deliver sustainable growth in revenue and profit over the medium term will be delivered through four key areas of strategic focus:

· Protecting and revitalising our core brands in print;

· Growing our existing brands onto digital delivery channels;

· Continuing our relentless focus on efficiency and cost management; and

· Launching, developing, investing in or acquiring new businesses built around distinctive content or audience.

Key highlights of progress on each area of strategic focus in the year were:

Protecting and revitalising our core brands in print

We continue to enhance and adapt our portfolio to support circulation volumes and optimise revenues and profits.

· The Daily Mirror circulation declined by 9.2% compared to the UK national daily tabloid market decline of 8.0% and the UK national daily popular tabloid market decline of 9.6%. The market for our other titles remains challenging with some individual titles performing well relative to the market.

· The Daily Mirror print advertising volume market share in the UK national daily tabloid market was 18.3% and in the UK national daily popular tabloid market was 35.0%. The Sunday Mirror, Sunday People, Daily Record and Sunday Mail advertising volume shares were 17.5%, 11.3%, 15.9% and 26.6% respectively. Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.

Strategic Update continued

Protecting and revitalising our core brands in print continued

· In April we launched Britain's biggest free weekly newspaper, the Manchester Weekly News, with a distribution of 265,000 across Greater Manchester and The Visiter, a new free newspaper covering the entire Sefton region.

· The Liverpool Echo was re-launched in June and the Birmingham Mail was re-launched in October with other regional brands to follow. The new design reflects the changing media consumption habits of our readers with less focus on crime, more reporting on things to do in the city and improved coverage in areas such as football.

· The Trinity Mirror Solutions team delivered a series of road shows with live midday editorial conferences hosted by Trinity Mirror Editor-in-Chief Lloyd Embley and the introduction of Modal Britain, Trinity Mirror's mass-market audience which our brands represent, to our advertising clients.

Growing our existing brands onto digital delivery channels

· Excluding Local World, publishing average monthly unique users and average monthly pages views grew year on year by 34% and 42% respectively and digital display advertising revenue grew year on year by 33%.

· We have increased our operational investment across our digital activities during the year. Mobile continues to be an increasingly important component of digital revenue growth and we are enhancing our products and advertising formats to take advantage of the ongoing opportunity in this area. The Mirror's new app, launched earlier in the year, has been rolled out to other core sites.

· We are publishing onto Apple News, Facebook Instant Articles and will be ready for Google's new Accelerated Mobile Pages format.

· We are evolving the organisation of our regional newsrooms to be even more focused on building a highly engaged local audience.

· Trinity Mirror Solutions continued to build capabilities within their Inventions team to fully benefit from the rising interest in content marketing from our advertisers. In the year, they have delivered fully integrated digital and print creative solutions for clients including Kellogg's, the NHS and Boots.

Continuing our relentless focus on efficiency and cost management

· Structural cost savings of £20 million were delivered in the year, £10 million ahead of our initial target. Key actions included editorial and advertising changes to produce greater efficiency, the closure of our small print plants in Scotland (Blantyre) and Newcastle, consolidation of pre press operations for the regional titles into Liverpool and rationalisation of the property portfolio enabling the sublet of space in Glasgow and Cardiff and the closure of smaller offices.

· For 2016, our structural cost savings target is £15 million including synergy savings from the integration of Local World. Annualised synergy savings of £12 million are being targeted for 2017. The targeted structural cost savings will result in restructuring costs of some £20 million in 2016.

· Capital expenditure is expected to be £16 million in 2016. This includes capital expenditure relating to Local World, including the commencement of the process of integrating IT systems.

Launching, developing, investing in or acquiring new businesses built around distinctive content or audience

· The Group completed the acquisition of the 80.02% of Local World not previously owned on 13 November 2015.

· The Group's Sport Media team were the Official Match Day Programme and Pre-Tournament Magazine Licensee for Rugby World Cup 2015 in England. The team produced and distributed, in print and electronic format, all 48 Match Day Programmes plus the Official Pre-Tournament Magazine.

· We continue to drive forward Pinpoint, our app-based mobile advertising network enabling advertisers to reach a geo-targeted audience through their mobile devices and launched a Local Government statutory notice smartphone app Notiz with seven local authorities.

· The Group launched two digital only brands during the first half, 'getreading' and 'Belfast Live'. Both sites are making good progress on building audience.

The Group is today launching a new daily paid-for national newspaper called, The New Day, published Monday to Friday. This new newspaper has been developed through detailed consumer insight and aims to fill a gap in the market for a modern, optimistic and politically neutral week day read. The title will utilise a very efficient operating model that leverages our editorial, advertising, printing and other infrastructure across the Group.

The Board is confident that its strategy to grow revenue and profit over the medium term remains on track despite the difficult print advertising market conditions.

Group Review

Income statement	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Revenue
Publishing	528.8	554.0	528.8	554.0
Print	485.9	521.6	485.9	521.6
Digital	42.9	32.4	42.9	32.4
Printing	44.9	64.5	44.9	64.5
Specialist Digital	15.4	14.5	15.4	14.5
Central	3.6	3.3	3.6	3.3
Revenue	592.7	636.3	592.7	636.3
Costs	(512.7)	(568.3)	(489.1)	(536.9)
Associates	2.2	30.6	6.0	6.1
Operating profit	82.2	98.6	109.6	105.5
Financing	(15.0)	(17.0)	(2.1)	(3.2)
Profit before tax	67.2	81.6	107.5	102.3
Tax	9.8	(11.8)	(21.1)	(21.0)
Profit after tax	77.0	69.8	86.4	81.3
Earnings per share	30.2p	28.1p	33.9p	32.8p

The results have been prepared for the 52 weeks ended 27 December 2015 (2015) and the comparative period has been prepared for the 52 weeks ended 28 December 2014 (2014). The results are presented on a statutory and adjusted basis to provide a more meaningful comparison of the Group's performance. Set out in note 17 is the reconciliation between the statutory results and the adjusted results.

Group revenue, which includes the trading for Local World post acquisition, fell by £43.6 million or 6.9% to £592.7 million. Underlying revenue fell by £48.6 million or 7.8% to £572.1 million. Further details on the revenue trends for each division are shown in the Divisional Review.

Costs comprised:

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Labour	(195.8)	(196.1)	(195.8)	(196.1)
Newsprint	(63.8)	(97.5)	(63.8)	(97.5)
Depreciation	(22.4)	(24.5)	(22.4)	(24.5)
Other	(230.7)	(250.2)	(207.1)	(218.8)
Non-recurring items	(4.4)	(12.0)	-	-
Restructuring charges in respect of cost reduction measures	(15.3)	(14.0)	-	-
Amortisation of intangible assets	(1.8)	(2.2)	-	-
Pension administrative expenses	(2.1)	(3.2)	-	-
Other	(207.1)	(218.8)	(207.1)	(218.8)
Costs	(512.7)	(568.3)	(489.1)	(536.9)

Statutory costs fell by £55.6 million or 9.8% to £512.7 million. Non-recurring items in 2015 comprised a £29.0 million increase in the provision for dealing with and resolving civil claims arising from phone hacking (2014: £12.0 million), costs of £5.6 million relating to the acquisition of Local World and a £3.4 million charge related to the closure of two print plants substantially offset by a £33.6 million gain on the accounting deemed disposal of the 19.98% interest in Local World on 13 November 2015.

Adjusted operating costs, fell by £47.8 million or 8.9% to £489.1 million. This reflects the benefit of structural cost savings of £20 million, the cessation of newsprint supply to the Independent and i of £11.1 million together with ongoing cost mitigating actions and the benefit from reduced newsprint prices which have more than offset the inclusion of Local World costs post acquisition, increased investment in digital and inflationary cost increases in labour and other overheads.

Group Review continued

The Group has a 21.53% investment in PA Group and up to 13 November 2015, prior to acquiring the entire business, held a 19.98% investment in Local World, accounted for as associated undertakings.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Result before amortisation and non-recurring items	6.0	6.1	6.0	6.1
Amortisation of intangible assets	(2.5)	(2.7)	-	-
Non-recurring items	(1.3)	27.2	-	-
Share of results of associates	2.2	30.6	6.0	6.1

The statutory share of the post tax profits from associates fell by £28.4 million to £2.2 million. Non-recurring items in 2014 included our £27.5 million share of the gain on the disposal by PA Group of its weather forecasting business, MeteoGroup. Adjusted share of the post tax profit from associates fell by £0.1 million to £6.0 million with Local World falling by £0.1 million to £5.1 million and PA Group in line with the prior year at £0.9 million. Our adjusted share of results of Local World would have been £5.5 million if our 19.98% interest had been equity accounted for the full year. During the first half of 2015, dividends of £16.3 million were received from associated undertakings with £12.0 million from Local World and £4.3 million from PA Group.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Operating profit pre associates	80.0	68.0	103.6	99.4
Associates	2.2	30.6	6.0	6.1
Operating profit	82.2	98.6	109.6	105.5

Statutory operating profit fell by £16.4 million to £82.2 million with adjusted operating profit increasing by £4.1 million or 3.9% to £109.6 million. Adjusted operating profit margin pre associates increased by 1.9 percentage points from 15.6% to 17.5%.

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Investment revenues	0.6	0.3	0.6	0.3
Pension finance charge	(10.9)	(11.2)	-	-
Finance costs	(4.7)	(6.1)	(2.7)	(3.5)
Interest on bank overdrafts and borrowings	(2.7)	(3.5)	(2.7)	(3.5)
Fair value gain/(loss) on derivative financial instruments	0.3	(0.3)	-	-
Foreign exchange loss on retranslation of borrowings	(2.3)	(2.3)	-	-
Financing	(15.0)	(17.0)	(2.1)	(3.2)

Statutory financing costs which include the pension finance charge, the change in derivative financial instruments and the foreign exchange changes on retranslation of foreign currency borrowings fell by £2.0 million to £15.0 million. Adjusted financing costs fell by £1.1 million to £2.1 million reflecting the benefit of the material fall in long term debt during 2014 and the continued benefit of the low interest rate environment partially offset by interest costs on the new £80.0 million term loan procured to partially finance the acquisition of Local World.

The statutory tax credit of £9.8 million (2014: £11.8 million charge) comprises a current tax charge of £8.9 million (2014: £13.8 million) and a deferred tax credit of £18.7 million (2014: £2.0 million). The statutory effective tax rate is lower than the standard rate of corporation tax for the reasons set out in the reconciliation:

Reconciliation of tax charge	2015 %	2014 %
Standard rate of corporation tax	(20.3)	(21.5)
Items not deductible in determining taxable profit (non qualifying depreciation/transaction costs)	(2.6)	(1.1)
Items not taxable in determining taxable profit (utilised tax losses/gain on deemed disposal)	10.9	-
Prior period adjustment (current and deferred tax)	0.4	0.1
Deferred tax rate change (from future reduction in corporation tax rate)	25.6	-
Tax effect of share of results of associates (brought in post tax)	0.6	8.0
Tax credit/(charge) rate	14.6	(14.5)

The adjusted tax charge of £21.1 million (2014: £21.0 million) represents 19.6% (2014: 20.5%) of adjusted profit before tax and reflects the benefit of the reduction in the rate of corporation tax from 21.0% to 20.0% on 1 April 2015.

Group Review continued

	Statutory results		Adjusted results
	2015	2014	2015	2014
	£m	£m	£m	£m
Profit after tax	77.0	69.8	86.4	81.3
Weighted average number of shares (000's)	254,936	248,108	254,936	248,108
Earnings per share	30.2p	28.1p	33.9p	32.8p

Statutory earnings per share increased by 2.1 pence or 7.5% to 30.2 pence. Adjusted earnings per share increased by 1.1 pence or 3.4% to 33.9 pence with the impact of the higher adjusted operating profit, lower interest costs and the benefit of a fall in the rate of corporation tax being partially offset by the higher weighted average number of shares. The increase in the weighted average number of shares year on year primarily reflects the impact of the 8.7% equity placing on 28 October 2015 and the issue of shares representing 1.3% of equity on 13 November 2015 relating to the acquisition of Local World.

Divisional Review

The Group has four operating segments, each of which is a division, that are regularly reviewed for the purposes of allocating resources and assessing performance. The divisional review that follows is presented on an adjusted basis and there is no difference between the operating profit by division and the segment result of each operating segment that is shown in note 3.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the Publishing segment and to third parties; Specialist Digital which includes our acquired digital recruitment classified business and our digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates. After completing the acquisition of the 80.02% of Local World not previously owned on 13 November 2015, Local World is included in the Publishing division. Prior to 13 November 2015 the Group's 19.98% interest was equity accounted for as an associated undertaking and included in the Central division.

The revenue and adjusted operating profit by operating segment is presented below:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Publishing	528.8	554.0	(25.2)	(4.5%)
Printing	44.9	64.5	(19.6)	(30.4%)
Specialist Digital	15.4	14.5	0.9	6.2%
Central	3.6	3.3	0.3	9.1%
Revenue	592.7	636.3	(43.6)	(6.9%)
Publishing	113.7	113.5	0.2	0.2%
Printing	-	-	-	-
Specialist Digital	2.6	2.0	0.6	30.0%
Central	(6.7)	(10.0)	3.3	33.0%
Adjusted Operating profit	109.6	105.5	4.1	3.9%

Excluding these items, revenue on an underlying basis is:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Publishing	507.6	549.5	(41.9)	(7.6%)
Printing	45.5	53.4	(7.9)	(14.8%)
Specialist Digital	15.4	14.5	0.9	6.2%
Central	3.6	3.3	0.3	9.1%
Underlying revenue	572.1	620.7	(48.6)	(7.8%)

The adjusted operating profit of Local World post acquisition was £2.7 million. The impact on operating profit from the cessation of newsprint supply to the Independent and i and closure of titles in the South in 2014 is immaterial.

Divisional Review continued

Publishing

The revenue and adjusted operating profit for the Publishing division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Print	485.9	521.6	(35.7)	(6.8%)
Circulation	271.7	279.8	(8.1)	(2.9%)
Advertising	182.0	209.2	(27.2)	(13.0%)
Other	32.2	32.6	(0.4)	(1.2%)
Digital	42.9	32.4	10.5	32.4%
Advertising	37.3	28.5	8.8	30.9%
Other	5.6	3.9	1.7	43.6%
Revenue	528.8	554.0	(25.2)	(4.5%)
Costs	(415.1)	(440.5)	25.4	5.8%
Adjusted operating profit	113.7	113.5	0.2	0.2%
Adjusted operating margin	21.5%	20.5%	1.0%	4.9%

Revenue fell by 4.5% or £25.2 million to £528.8 million with print revenue declining by 6.8% and digital revenue growing by 32.4%. On an underlying basis revenue fell by 7.6% with print revenue declining by 9.5% and digital revenue growing by 21.9%.

Continued tight management of the cost base ensured that costs fell by £25.4 million or 5.8% to £415.1 million. The fall in costs is after the inclusion operating costs of Local World post acquisition and increased investment in digital.

Operating profit increased by £0.2 million or 0.2% to £113.7 million with operating margin increasing by 1.0 percentage point from 20.5% to 21.5%.

Underlying circulation revenue fell by 5.0% compared to a decline of 2.1% in 2014. The increased rate of decline in circulation revenues reflects the delayed cover price increase of the Daily Mirror Monday to Friday edition which took effect in May 2015 whereas this was implemented in January in 2014.

The Daily Mirror declined by 9.2% compared to an 8.0% decline for the UK national daily tabloid market and a 9.6% decline in the UK national daily popular tabloid market. The Sunday Mirror and Sunday People declined by 11.6% and 15.3% respectively in a UK national Sunday tabloid market that declined by 9.4%.

The Daily Record was down 11.6% against an overall Scottish daily tabloid market decline of 9.7% and the Sunday Mail was down 12.7% against an overall Scottish Sunday tabloid market decline of 10.9%.

The market for our regional titles remains difficult with declines of 12.2% for paid-for dailies, 11.7% for paid-for weeklies and 16.4% for paid-for Sundays.

Underlying print advertising revenue fell by 16.6% with display declining by 18.3%, classified declining by 13.4% and other categories declining by 19.1%.

The Daily Mirror print advertising volume market share in the UK national daily tabloid market declined from 18.5% to 18.3% and in the UK national daily popular tabloid market increased from 33.8% to 35.0%. The Sunday Mirror share declined from 17.6% to 17.5% and the Sunday People share grew from 10.9% to 11.3%.

The Daily Record share grew from 15.0% to 15.9% and the Sunday Mail share grew from 26.3% to 26.6%.

Our regional titles continue to experience difficult advertising markets, particularly national advertising in our metropolitan titles.

Underlying other print revenue fell by 2.2% driven by continued pressure on leaflets, lower waste sales due to lower prices and lower third party services.

The print revenue of Local World post acquisition of £17.8 million comprised £10.7 million advertising, £6.5 million circulation and £0.6 million other. For the full year 2015, Local World print revenue of £178.1 million comprised £113.9 million advertising, £56.9 million circulation and £7.3 million other.

Divisional Review continued

Publishing continued

Digital

Underlying digital revenue grew by 21.9% driven by strong growth in our publishing digital audience with average monthly unique users increasing year on year by 34% to 98 million and with average monthly page views increasing year on year by 42% to 725 million. In December 2015, excluding Local World, monthly unique users were 100 million and monthly page views were 705 million. Underlying digital advertising revenue increased by 19.6% year on year with digital display revenue growing by 32.6% and classified falling marginally by 3.8%. Underlying digital other revenue increased by 38.5% benefiting from the growth in audience and new commercial partnerships.

The digital revenue of Local World post acquisition of £3.4 million comprised £3.2 million advertising and £0.2 million other. For the full year 2015, Local World digital revenue of £30.1 million comprised £28.1 million advertising and £2.0 million other. Local World's average monthly unique users increased year on year by 28% to 23 million and average monthly page views increased year on year by 54% to 158 million. In December 2015, Local World's monthly unique users were 23 million and monthly page views were 147 million.

The publishing unique users in December 2015 including Local World would be less than the aggregation of Trinity Mirror (excluding Local World) and Local World as a result of deduping. Publishing page views in December 2015 would be 852 million.

Printing

The revenue and adjusted costs of the Printing division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Contract printing	32.8	37.6	(4.8)	(12.8%)
Newsprint supply	9.9	24.3	(14.4)	(59.3%)
Other revenue	2.2	2.6	(0.4)	(15.4%)
Revenue	44.9	64.5	(19.6)	(30.4%)
External costs	(148.9)	(188.9)	40.0	21.2%
Publishing division recharge	104.0	124.4	(20.4)	(16.4%)
Adjusted operating result	-	-	-	-

Revenue fell by £19.6 million or 30.4% to £44.9 million. The fall in revenue reflects the impact of the cessation of the newsprint supply agreement to the Independent and i at the end of 2014 and the acquisition of Local World on 13 November 2015 which resulted in contract print revenue from Local World post acquisition being accounted for as internal revenue. Newsprint supply revenue from the Independent and i amounted to £11.1 million in 2014 and the acquisition of Local World resulted in revenue of £0.6 million now being accounted for as internal printing revenue. On an underlying basis revenue fell by 14.8% reflecting the impact of lower volumes and lower newsprint prices.

External costs fell by £40.0 million or 21.2% to £148.9 million due to cost reduction initiatives, the fall in newsprint prices, the cessation of the newsprint supply contract to the Independent and i and the reduction in costs associated with falling print volumes. The net cost recharged to the Publishing division was £104.0 million compared to £124.4 million in the prior year. This fall in the recharge reflects the impact of cost savings, the fall in newsprint prices and the reduced circulation volumes.

Specialist Digital

The revenue and adjusted operating profit of the Specialist Digital division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Advertising	5.0	4.8	0.2	4.2%
Other	10.4	9.7	0.7	7.2%
Revenue	15.4	14.5	0.9	6.2%
Costs	(12.8)	(12.5)	(0.3)	(2.4%)
Adjusted operating profit	2.6	2.0	0.6	30.0%

The Specialist Digital division includes Trinity Mirror Digital Recruitment, our digital classified recruitment vertical and Rippleffect and Communicator, our digital marketing services businesses.

Following the restructuring of the recruitment sites to focus on the three key brands of GAAPweb, SecsintheCity and TotallyLegal at the end of 2013, our recruitment revenues have grown by 4.2%. Our marketing services businesses delivered strong revenue growth of 7.2%. Tight management of costs ensured that operating profit grew by 30.0% or £0.6 million.

Divisional Review continued

Central

The revenue and adjusted operating loss of the Central division is as follows:

	2015	2014	Variance	Variance
	£m	£m	£m	%
Revenue	3.6	3.3	0.3	9.1%
Costs	(16.3)	(19.4)	3.1	16.0%
Associates	6.0	6.1	(0.1)	(1.6%)
Adjusted operating loss	(6.7)	(10.0)	3.3	33.0%

The Central division includes revenue and costs not allocated to the operational divisions and the share of results of associates. The result for the year was a loss of £6.7 million compared to a loss of £10.0 million in 2014.

Revenue primarily relates to rental income from surplus office space at the Group's main office at Canary Wharf which increased as more vacant space was leased to third parties.

Costs fell by £3.1 million from £19.4 million to £16.3 million reflecting numerous cost saving initiatives and tight management of the cost base.

Other Items

Pensions

The Group operates defined contribution pension schemes with contributions and associated costs charged to operating profit.

The defined benefit pension schemes operated by the Group were closed to future accrual in 2010. The Group now has five defined benefit pension schemes following the buyouts of the five smaller schemes in 2014.

The last actuarial funding valuations of the five remaining defined benefit pension schemes were as at 31 December 2013. The valuations were completed in December 2014 with deficit funding contributions agreed of circa £36 million per annum from 2015. In addition, the Group agreed additional contributions would be paid at 50% of the excess if dividends paid in 2015 were above 5 pence per share and if a greater than 10% annual increase thereafter. The next valuation date of the schemes is 31 December 2016 and valuations are expected to be finalised before March 2018.

In December 2014, the Group prepaid contributions for 2015 and 2016 of £16.5 million and £0.5 million respectively. Payments in 2015 were £20.0 million. Payments in 2016 are expected to be £35.7 million.

The accounting pension deficit increased during the year by £4.0 million from £301.2 million (£241.0 million net of deferred tax) to £305.2 million (£250.2 million net of deferred tax). The increase in the deficit primarily reflects changes in the discount rate, inflation and other assumptions more than offsetting asset returns and the contributions paid during the year. The increase in the accounting pension deficit has no immediate funding commitments and these will only be amended after completion of the 2016 funding valuations.

Cash and borrowings

Cash balances of £55.4 million were held at the reporting date and the Group has no drawings on its £60.0 million bank facility which is committed until July 2018. Contracted debt comprised the outstanding private placement loan notes totalling £68.3 million which are not due for repayment until June 2017 and the £80.0 million amortising term loan entered into to partially fund the acquisition of Local World. The first instalment of the term loan of £15.0 million is due in October 2016.

Contracted net debt, assuming that the US$ denominated private placement loan notes and related cross-currency interest rate swap is not terminated prior to maturity, was £92.9 million, an increase of £73.6 million from £19.3 million at the prior year end. The £73.6 million increase was after net cash payments of £137.4 million in relation to the acquisition of Local World. Excluding these net cash payments, net cash inflows were £63.8 million.

Statutory net debt, which includes the US$ denominated private placement loan notes at the reporting date exchange rate and the related cross-currency interest rate swap at fair value, increased by £75.6 million from £13.1 million to £88.7 million. The fair value of the Group's cross-currency interest rate swap was an asset of £3.5 million and the Sterling equivalent of the US$ denominated private placement loan notes was £67.6 million.

Related party transactions

Local World became a wholly owned subsidiary on 13 November 2015. Other than the dividends received from associates there were no material non trading transactions during the year.

Other Items continued

Principal risks and uncertainties

There is an ongoing robust process for the identification, evaluation and management of the principal risks and uncertainties faced by the Group. Appropriate management actions are in place to minimise the impact of the risks and uncertainties which are identified as part of the risk process. During the year, the Board undertook a review of the Group's appetite for risk and how this manifests itself in the way the Group conducts its business.

The principal risks and uncertainties are the same as last year as follows:

· Strategy - the overall strategy or elements of the strategy are inappropriate and the delivery of the strategy is badly executed;

· Revenue loss - faster than anticipated loss of revenue from print and failure to deliver new revenue streams to offset print decline and drive revenue growth;

· Historical legal issues - damage to reputation arising from historical events, direct financial impact from legal claims and distraction of senior management time from delivering the strategy; and

· Pensions - pension deficits grow at such a rate so as to affect the viability of the Group itself or so that the annual funding costs consume a disproportionate level of cash flow.

These principal risks and uncertainties, the risk appetite in relation to these and the progress made during the year are set out in the Trinity Mirror plc 2015 Annual Report.

Assessment of the Group's prospects

The directors have assessed the Group's prospects, both as a going concern and its longer term viability.

Going concern statement

The directors consider it appropriate to adopt the going concern basis of accounting in the preparation of the Group's annual consolidated financial statements.

In accordance with LR 9.8.6(3) of the Listing Rules, and in determining whether the Group's annual consolidated financial statements can be prepared on a going concern basis, the directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowing facilities and the principal risks and uncertainties relating to its business activities.

Having considered all the factors impacting the Group's businesses, including downside sensitivities, the directors are satisfied that the Group will be able to operate within the terms and conditions of the Group's financing facilities for the foreseeable future.

The directors have reasonable expectations that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Group's annual consolidated financial statements.

Viability statement

The directors have a reasonable expectation that the Company and the Group will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment.

The directors assessed the prospects of the Group over a three year period which reflects the budget and planning cycle adopted by the Group. The assessment takes into account the Group's current position and the principal risks and uncertainties facing the Group including those that would threaten the business model, future performance, solvency or liquidity.

Sensitivity analysis is applied to the projections to model the potential effects should principal risks and uncertainties actually occur, individually or in combination. The Board also assessed the likely effectiveness of any proposed mitigating actions.

It is understood that such future assessments are subject to a level of uncertainty that increases with time and, therefore, future outcomes cannot be guaranteed or predicted with certainty. Also, this assessment was made recognising the principal risks and uncertainties that could have an impact on the future performance of the Group and also the financial risks described in the notes to the consolidated financial statements.

Further information concerning the review of going concern and viability are set out in the Trinity Mirror plc 2015 Annual Report.

Other Items continued

Local World

Following the acquisition of Local World, the Group remains on track to deliver annualised synergy savings of £12 million in the full year 2017.

At the same time as the acquisition of Local World, the Company signed Heads of Terms with Edward Richard Iliffe ("ERI") which set out the principal terms and conditions on which ERI would acquire the businesses and assets of certain local newspaper titles in the Local World portfolio. The key terms of the agreement were:

· Consideration of £15.8 million (calculated on a debt-free, cash-free and working capital-free basis) payable in cash in full upon completion;

· The businesses and assets of one daily title, the Cambridge News, and around nine weekly titles located around Cambridge and Hertfordshire, together with the websites, trade names, domain names and associated intellectual property associated with those titles; and

· In certain circumstances a break fee of £2.0 million would be payable to Iliffe Print Cambridge Limited (an Iliffe family company) if the disposal is not completed.

After extensive work on separation of the business over the past three months, the Board concluded that it was in the best interests of the Company not to proceed with the disposal and therefore pay a break fee of £2.0 million to Iliffe Print Cambridge Limited. This will be paid in 2016 and accounted for as a non-recurring item.

Board changes

There have been a number of changes to the Board during 2015 and in January 2016. Donal Smith left the Board on 7 May 2015 and Jane Lighting left the Board on 27 December 2015. Steve Hatch joined the Board on 1 December 2015 and Olivia Streatfeild joined the Board on 15 January 2016.

Statement of directors' responsibilities

The directors are responsible for preparing the Annual Results Announcement in accordance with applicable laws and regulations. The responsibility statement below has been prepared in connection with the Company's full Annual Report for the 52 weeks ended 27 December 2015. Certain points thereof are not included within this Annual Results Announcement.

The directors confirm to the best of their knowledge:

a) the consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole; and

b) the Management Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties they face.

By order of the Board of directors

Simon Fox Vijay Vaghela

Chief Executive Group Finance Director

Consolidated income statement

for the 52 weeks ended 27 December 2015 (52 weeks ended 28 December 2014)

	notes	2015 £m	2014 £m

Revenue	3,4	592.7	636.3
Cost of sales		(300.3)	(329.9)
Gross profit		292.4	306.4
Distribution costs		(67.2)	(67.5)
Administrative expenses:
Non-recurring items	5	(4.4)	(12.0)
Restructuring charges in respect of cost reduction measures		(15.3)	(14.0)
Amortisation of intangible assets		(1.8)	(2.2)
Pension administrative expenses	13	(2.1)	(3.2)
Other administrative expenses		(121.6)	(139.5)
Share of results of associates:
Results before non-recurring items and amortisation		6.0	6.1
Non-recurring items	5	(1.3)	27.2
Amortisation of intangible assets		(2.5)	(2.7)
Operating profit	3	82.2	98.6
Investment revenues	6	0.6	0.3
Pension finance charge	13	(10.9)	(11.2)
Finance costs	7	(4.7)	(6.1)
Profit before tax		67.2	81.6
Tax credit/(charge)	8	9.8	(11.8)
Profit for the period attributable to equity holders of the parent		77.0	69.8

Statutory earnings per share		2015 Pence	2014 Pence
Earnings per share - basic	10	30.2	28.1
Earnings per share - diluted	10	29.6	27.4

Adjusted* earnings per share		2015 Pence	2014 Pence
Earnings per share - basic	10	33.9	32.8
Earnings per share - diluted	10	33.2	32.0

* Adjusted items relate to the exclusion of non-recurring items, restructuring charges in respect of cost reduction measures, the amortisation of intangible assets, the pension administrative expenses, the retranslation of foreign currency borrowings, the impact of fair value changes on derivative financial instruments, the pension finance charge and the impact of tax legislation changes. Set out in note 17 is the reconciliation between the statutory results and the adjusted results.

Consolidated statement of comprehensive income

for the 52 weeks ended 27 December 2015 (52 weeks ended 28 December 2014)

	notes	2015 £m	2014 £m

Profit for the period		77.0	69.8

Items that will not be reclassified to profit and loss:
Actuarial losses on defined benefit pension schemes	13	(11.0)	(52.8)
Tax on actuarial losses on defined benefit pension schemes	8	2.2	10.6
Deferred tax charge resulting from the future change in tax rate	8	(6.0)	-
Share of items recognised by associates		(3.2)	-
Other comprehensive costs for the period		(18.0)	(42.2)

Total comprehensive income for the period		59.0	27.6

Consolidated cash flow statement

for the 52 weeks ended 27 December 2015 (52 weeks ended 28 December 2014)

	notes	2015 £m	2014 £m
Cash flows from operating activities
Cash generated from operations	11	62.6	90.1
Income tax paid		(9.7)	(17.3)
Net cash inflow from operating activities		52.9	72.8
Investing activities
Interest received		0.6	0.3
Dividends received from associates		16.3	16.0
Proceeds on disposal of subsidiary undertaking		-	0.9
Proceeds on disposal of property, plant and equipment		-	0.2
Purchases of property, plant and equipment		(3.6)	(6.4)
Acquisition of subsidiary undertaking	16	(148.2)	-
Net debt acquired on acquisition of subsidiary undertaking	16	(11.9)	-
Net cash (used in)/received from investing activities		(146.8)	11.0
Financing activities
Dividends paid		(12.5)	-
Interest paid on borrowings		(1.7)	(3.9)
Increase in/(repayment of) borrowings		80.0	(44.2)
Issue of ordinary share capital		34.5	-
Purchase of shares for LTIP		-	(2.2)
Net cash received from/(used in) financing activities		100.3	(50.3)

Net increase in cash and cash equivalents		6.4	33.5

Cash and cash equivalents at the beginning of the period	12	49.0	15.5
Cash and cash equivalents at the end of the period	12	55.4	49.0

Consolidated statement of changes in equity

for the 52 weeks ended 27 December 2015 (52 weeks ended 28 December 2014)

	Share capital £m	Share premium account £m	Merger reserve £m	Capital redemption reserve £m	Retained earnings and other reserves £m	Total £m

At 29 December 2013	(25.8)	(1,121.6)	-	(4.3)	580.0	(571.7)

Profit for the period	-	-	-	-	(69.8)	(69.8)
Other comprehensive costs for the period	-	-	-	-	42.2	42.2
Total comprehensive income for the period	-	-	-	-	(27.6)	(27.6)

Capital reduction	-	514.8	-	-	(514.8)	-
Charge to equity for equity-settled share-based payments	-	-	-	-	2.2	2.2
Purchase of shares for LTIP	-	-	-	-	2.2	2.2
Reclassification	-	0.1	-	(0.1)	-	-
At 28 December 2014	(25.8)	(606.7)	-	(4.4)	42.0	(594.9)

Profit for the period	-	-	-	-	(77.0)	(77.0)
Other comprehensive costs for the period	-	-	-	-	18.0	18.0
Total comprehensive income for the period	-	-	-	-	(59.0)	(59.0)

Issue of shares	(2.5)	-	(37.9)	-	-	(40.4)
Credit to equity for equity-settled share-based payments	-	-	-	-	(1.8)	(1.8)
Dividends paid	-	-	-	-	12.5	12.5
At 27 December 2015	(28.3)	(606.7)	(37.9)	(4.4)	(6.3)	(683.6)

Consolidated balance sheet

at 27 December 2015 (at 28 December 2014)

	notes	2015 £m	2014 £m
Non-current assets
Goodwill		104.5	12.0
Other intangible assets		799.8	668.9
Property, plant and equipment		300.1	317.7
Investment in associates		19.2	41.4
Retirement benefit assets	13	29.4	17.8
Deferred tax assets		55.2	62.1
Derivative financial instruments	12	3.5	3.2
		1,311.7	1,123.1
Current assets
Inventories		6.2	7.0
Trade and other receivables		121.8	103.3
Cash and cash equivalents	12	55.4	49.0
		183.4	159.3
Total assets		1,495.1	1,282.4
Non-current liabilities
Borrowings	12	(132.6)	(65.3)
Retirement benefit obligations	13	(334.6)	(319.0)
Deferred tax liabilities		(175.9)	(178.0)
Provisions	14	(7.2)	(6.9)
		(650.3)	(569.2)
Current liabilities
Trade and other payables		(94.3)	(83.0)
Borrowings	12	(15.0)	-
Current tax liabilities		(8.4)	(12.0)
Provisions	14	(43.5)	(23.3)
		(161.2)	(118.3)
Total liabilities		(811.5)	(687.5)
Net assets		683.6	594.9

Equity
Share capital	15	(28.3)	(25.8)
Share premium account	15	(606.7)	(606.7)
Merger reserve	15	(37.9)	-
Capital redemption reserve	15	(4.4)	(4.4)
Retained earnings and other reserves	15	(6.3)	42.0
Total equity attributable to equity holders of the parent		(683.6)	(594.9)

Notes to the consolidated financial statements

for the 52 weeks ended 27 December 2015 (52 weeks ended 28 December 2014)

1. General information

The financial information in the Annual Results Announcement is derived from but does not represent the full statutory accounts of Trinity Mirror plc. The statutory accounts for the 52 weeks ended 28 December 2014 have been filed with the Registrar of Companies and those for the 52 weeks ended 27 December 2015 will be filed following the Annual General Meeting on 5 May 2016. The auditors' reports on the statutory accounts for the 52 weeks ended 28 December 2014 and for the 52 weeks ended 27 December 2015 were unqualified, do not include reference to any matters to which the auditors drew attention by way of emphasis of matter without qualifying the reports and do not contain a statement under Section 498 (2) or (3) of the Companies Act 2006.

Whilst the financial information included in this Annual Results Announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. This Annual Results Announcement constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules (DTR). The Annual Report for the 52 weeks ended 27 December 2015 is available on the Company's website at www.trinitymirror.com and at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP and will be sent to shareholders who have elected to receive a hard copy by the end of March 2016.

The financial information has been prepared for the 52 weeks ended 27 December 2015 and the comparative period has been prepared for the 52 weeks ended 28 December 2014. Throughout this report, the financial information for the 52 weeks ended 27 December 2015 is referred to and headed 2015 and for the 52 weeks ended 28 December 2014 is referred to and headed 2014.

2. Accounting polices

The financial information has been prepared in accordance with IFRS as adopted by the European Union. These are subject to ongoing amendment by the International Accounting Standards Board and by the European Union and are therefore subject to change. As a result, the financial information contained herein will need to be updated for any subsequent amendment to IFRS or any new standards that are issued. The financial information has been prepared under the historical cost convention as modified by the revaluation of freehold properties which on transition to IFRS were deemed to be the cost of the asset and for derivative financial instruments and shared-based payments that have been measured at fair value.

The accounting policies used in the preparation of the consolidated financial statements for the 52 weeks ended 27 December 2015 have been consistently applied to all the periods presented except for the changes in accounting policy noted below and are set out in the Trinity Mirror plc 2015 Annual Report. These consolidated financial statements have been prepared on a going concern basis as set out in the Management Report in this Annual Results Announcement.

Changes in accounting policy

The same accounting policies, presentation and methods of computation are followed in the consolidated financial statements as applied in the Group's latest annual consolidated financial statements.

The Group has adopted IAS 19 (Amended) 'Employee Benefits' and IFRIC 21 (Issued) 'Levies' during the current financial period which had no impact on the Group.

The following amended standards, which have not been applied and when adopted will have no material impact on the Group, were in issue and will be effective for periods beginning on are after 1 January 2016:

· IFRS 10 (Amended) 'Consolidated Financial Statements'

· IFRS 11 (Amended) 'Joint Arrangements'

· IFRS 12 (Amended) 'Disclosure of Interests in Other Entities'

· IAS 16 (Amended) 'Property, Plant and Equipment'

· IAS 1 (Amended) 'Presentation of Financial Statements'

· IAS 27 (Amended) 'Separate Financial Statements'

· IAS 28 (Amended) 'Investments in Associates and Joint Ventures'

· IAS 38 (Amended) 'Intangible Assets'

Annual Improvements 2010-2012 cycle and 2011-2013 cycle have been implemented and had no material impact on the Group.

The following new and amended standards, which have not been applied and for which the impact on the Group is being assessed, were not yet endorsed by the EU and/or have no effective date:

· IFRS 9 (Issued) 'Financial Instruments' - effective for periods beginning on or after 1 January 2018

· IFRS 10 (Amended) 'Consolidated Financial Statements'

· IFRS 15 (Issued) 'Revenue from Contracts with Customers' - effective for periods beginning on or after 1 January 2018

· IFRS 16 (Issued) 'Leases' - effective for periods beginning on or after 1 January 2019

· IAS 28 (Amended) 'Investments in Associates and Joint Ventures'

Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

Provisions

There is uncertainty as to liabilities arising from the outcome or resolution of the ongoing historical legal issues. Provisions are measured at the best estimate of the expenditure required to settle the obligation based on the assessment of the related facts and circumstances at each reporting date.

2. Accounting polices (continued)

Key sources of estimation uncertainty (continued)

Retirement benefits

Actuarial assumptions adopted and external factors can significantly impact the surplus or deficit of defined benefit pension schemes. Valuations for funding and accounting purposes are based on assumptions about future economic and demographic variables. This results in risk of a volatile valuation deficit and the risk that the ultimate cost of paying benefits is higher than the current assessed liability value. Advice is sourced from independent and qualified actuaries in selecting suitable assumptions at each reporting date.

Critical judgements in applying the Group's accounting policies

In the process of applying the Group's accounting policies, described above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements:

Impairment of goodwill and other intangible assets

Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in use of the cash-generating unit to which these have been allocated. It also requires assessment of the appropriateness of the cash-generating unit at each reporting date. The value in use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Projections are based on both internal and external market information and reflect past experience. The discount rate reflects a long-term equity and debt mix based on the period end enterprise value assuming a long-term debt to EBITDA ratio of 2.5 times.

Identification of intangible assets acquired in business combinations

Significant judgement is involved in respect of the identification of intangible assets acquired in business combinations, such as publishing rights and titles, and in calculating their fair values. These judgements impact the amount of goodwill recognised on acquisitions. This involves consideration of the intangible assets acquired and the selection and application of a suitable valuation method and associated assumptions such as the discount rate and the useful economic life attributed to the assets. The Group has sufficient experience of valuations techniques and therefore performs the valuations internally.

3. Operating segments

Operating segments are identified on the basis of internal reports about components of the Group that are regularly reviewed by the Board and chief operating decision maker (Executive directors) to allocate resources to the segments and to assess their performance. The Group has four operating segments that are regularly reviewed by the Board and chief operating decision maker.

The operating segments are: Publishing which includes all of our newspapers and associated digital publishing; Printing which provides printing services to the Publishing segment and to third parties; Specialist Digital which includes our acquired digital specialist classified and our digital marketing services businesses; and Central which includes revenue and costs not allocated to the operational divisions and our share of results of associates. After completing the acquisition of the 80.02% of Local World not previously owned on 13 November 2015, Local World is included in the Publishing division. Prior to 13 November 2015, the Group's 19.98% interest was equity accounted for as an associated undertaking and included in the Central division.

The accounting policies used in the preparation of each segment's revenue and results are the same as the Group's accounting policies. The Board and chief operating decision maker are not provided with an amount for total assets by segment. The Group's operations are primarily located in the UK and the Group is not subject to significant seasonality during the year.

Segment revenue and results

52 weeks ended 27 December 2015	Publishing 2015 £m	Printing 2015 £m	Specialist Digital 2015 £m	Central 2015 £m	Total 2015 £m
Revenue
Segment sales	528.8	148.9	16.2	3.6	697.5
Inter-segment sales	-	(104.0)	(0.8)	-	(104.8)
Total revenue	528.8	44.9	15.4	3.6	592.7
Segment result	113.7	-	2.6	(6.7)	109.6
Non-recurring items					(5.7)
Restructuring charges in respect of cost reduction measures					(15.3)
Amortisation of intangible assets					(4.3)
Pension administrative expenses					(2.1)
Operating profit					82.2
Investment revenues					0.6
Pension finance charge					(10.9)
Finance costs					(4.7)
Profit before tax					67.2
Tax credit					9.8
Profit for the period					77.0

3. Operating segments (continued)

Segment revenue and results (continued)

52 weeks ended 28 December 2014	Publishing 2014 £m	Printing 2014 £m	Specialist Digital 2014 £m	Central 2014 £m	Total 2014 £m
Revenue
Segment sales	554.0	188.9	15.8	3.3	762.0
Inter-segment sales	-	(124.4)	(1.3)	-	(125.7)
Total revenue	554.0	64.5	14.5	3.3	636.3
Segment result	113.5	-	2.0	(10.0)	105.5
Non-recurring items					15.2
Restructuring charges in respect of cost reduction measures					(14.0)
Amortisation of intangible assets					(4.9)
Pension administrative expenses					(3.2)
Operating profit					98.6
Investment revenues					0.3
Pension finance charge					(11.2)
Finance costs					(6.1)
Profit before tax					81.6
Tax charge					(11.8)
Profit for the period					69.8

4. Revenue

	2015 £m	2014 £m

Circulation	271.7	279.8
Advertising	224.3	242.5
Printing	44.9	64.5
Other	51.8	49.5
Total revenue	592.7	636.3

The Group's operations are located primarily in the UK. The Group's revenue by location of customers is set out below:

	2015 £m	2014 £m

UK and Republic of Ireland	589.6	632.7
Continental Europe	2.8	3.5
Rest of World	0.3	0.1
Total revenue	592.7	636.3

5. Non-recurring items

	2015 £m	2014 £m

Provision for historical legal issues (a)	(29.0)	(12.0)
Closure of print sites (b)	(3.4)	-
Local World acquisition transaction costs (c)	(5.6)	-
Gain on deemed disposal of Local World associate interest (d)	33.6	-
Non-recurring items included in administrative expenses	(4.4)	(12.0)
Non-recurring items included in share of results of associates (e)	(1.3)	27.2
Total non-recurring items	(5.7)	15.2

(a) Provision of £29.0 million (2014: £12.0 million) to cover the costs of dealing with historical legal issues in relation to phone hacking. It remains uncertain as to how these matters will progress, whether further allegations or claims will be made, and their financial impact. Due to this uncertainty a contingent liability has been highlighted in note 18.

(b) Costs associated with the closure of the printing sites in Scotland (Blantyre) and Newcastle including the non-cash write off of fixed assets of £2.5 million.

(d) Gain on the accounting deemed disposal of the 19.98% interest in Local World on 13 November 2015.

(e) Group's share of transaction related costs incurred by Local World and restructuring costs incurred by PA Group and Local World. In 2014, the Group's share included a £27.5 million share of the gain on disposal by PA Group of its weather forecasting business, MeteoGroup.

6. Investment revenues

2015

£m

2014

£m

Interest income on bank deposits and other interest receipts

0.6

0.3

7. Finance costs

	2015 £m	2014 £m

Interest on bank overdrafts and borrowings	(2.7)	(3.5)
Total interest expense	(2.7)	(3.5)
Fair value gain/(loss) on derivative financial instruments	0.3	(0.3)
Foreign exchange loss on retranslation of borrowings	(2.3)	(2.3)
Finance costs	(4.7)	(6.1)

8. Tax

	2015 £m	2014 £m
Current tax
Corporation tax charge for the period	(9.8)	(14.0)
Prior period adjustment	0.9	0.2
Current tax charge	(8.9)	(13.8)
Deferred tax
Deferred tax credit for the period	2.1	2.1
Prior period adjustment	(0.6)	(0.1)
Deferred tax rate change	17.2	-
Deferred tax credit	18.7	2.0
Tax credit/(charge)	9.8	(11.8)

Reconciliation of tax charge	%	%
Standard rate of corporation tax	(20.3)	(21.5)
Tax effect of items that are not deductible in determining taxable profit	(2.6)	(1.1)
Tax effect of items that are not taxable in determining taxable profit	10.9	-
Prior period adjustment	0.4	0.1
Deferred tax rate change	25.6	-
Tax effect of share of results of associates	0.6	8.0
Tax credit/(charge) rate	14.6	(14.5)

Included in the 'tax effect of items that are not taxable in determining taxable profit' is the impact of the utilisation of unrecognised losses of £2.1 million (gross) and the impact of the non-taxable gain on the accounting deemed disposal of the 19.98% interest in Local World of £33.6 million.

The standard rate of corporation tax reduced from 21% to 20% on 1 April 2015. The blended rate for the accounting year is 20.25% being a mix of 21% up to 31 March 2015 and 20% from 1 April 2015 (2014: 21.5% being a mix of 23% up to 31 March 2014 and 21% from 1 April 2014). The current tax liabilities amounted to £8.4 million (2014: £12.0 million) at the reporting date. The opening deferred tax position is recalculated in the period in which a change in the standard rate of corporation tax has been enacted or substantively enacted by parliament. The change in rate from 20% to 18% has been accounted for in the current year resulting in a £17.2 million credit in the consolidated income statement and a £6.0 million charge in the consolidated statement of comprehensive income.

The tax on actuarial gains/(losses) on defined benefit pension schemes taken to the consolidated statement of comprehensive income is a credit of £2.2 million comprising a deferred tax credit of £0.8 million and a current tax credit of £1.4 million (2014: a credit of £10.6 million comprising a deferred tax credit of £9.8 million and a current tax credit of £0.8 million). The tax on share-based payments taken to equity is a credit of £0.5 million comprising a deferred tax charge of £1.1 million and a current tax credit of £1.6 million (2014: a charge of £3.3 million comprising a deferred tax charge of £3.7 million and a current tax credit of £0.4 million).

9. Dividends

		2015 Pence per share	2014 Pence per share
Dividends paid per share and recognised as distributions to equity holders in the period		5.00	-
Dividend proposed per share but not paid nor included in the accounting records		3.15	3.00

2015

Pence

per share

2014

Pence

per share

Dividends paid per share and recognised as distributions to equity holders in the period

5.00

Dividend proposed per share but not paid nor included in the accounting records

3.15

3.00

The Board proposes a final dividend for 2015 of 3.15 pence per share. An interim dividend for 2015 of 2.00 pence per share was paid on 30 November 2015 bringing the total dividend in respect of 2015 to 5.15 pence per share. The 2015 final dividend payment is expected to amount to £8.8 million. The 2015 interim dividend payment amounted to £5.0 million.

On 7 May 2015 the final dividend proposed for 2014 of 3.00 pence per share was approved by shareholders at the Annual General Meeting and was paid on 4 June 2015. The 2014 final dividend payment amounted to £7.5 million.

10. Earnings per share

	2015 £m	2014 £m

Profit after tax before adjusted* items	86.4	81.3
Adjusted items:
Non-recurring items (after tax)	1.5	17.6
Amortisation of intangibles (after tax)	(3.9)	(4.5)
Finance costs (after tax)	(1.6)	(2.1)
Restructuring charges (after tax)	(12.2)	(11.0)
Pension charges (after tax)	(10.4)	(11.5)
Tax legislation changes	17.2	-
Profit for the period	77.0	69.8
Weighted average number of ordinary shares	2015 Thousand	2014 Thousand

Weighted average number of ordinary shares for basic earnings per share	254,936	248,108
Effect of potential dilutive ordinary shares in respect of share awards	5,024	6,574
Weighted average number of ordinary shares for diluted earnings per share	259,960	254,682

Basic earnings per share is calculated by dividing profit for the period attributable to equity holders of the parent by the weighted average number of ordinary shares during the period. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue on the assumption of conversion of all potentially dilutive ordinary shares. The weighted average number of potentially dilutive ordinary shares not currently dilutive was 2,681,295 (2014: 4,679,307).

Statutory earnings per share	2015 Pence	2014 Pence

Earnings per share - basic	30.2	28.1
Earnings per share - diluted	29.6	27.4

Adjusted* earnings per share	2015 Pence	2014 Pence

Earnings per share - basic	33.9	32.8
Earnings per share - diluted	33.2	32.0

The basic earnings per share impact for each non-recurring item disclosed in note 5 are as follows:

	2015 Pence	2014 Pence

Provision for historical legal issues in relation to phone hacking	(9.1)	(4.1)
Closure of print sites	(1.1)	-
Local World acquisition transaction costs	(1.9)	-
Gain on deemed disposal of Local World associate interest	13.2	-
Profit/(loss) per share - non-recurring items included in administrative expenses	1.1	(4.1)
(Loss)/profit per share - non-recurring items included in share of results of associates	(0.5)	11.0
Profit per share - total non-recurring items	0.6	6.9

11. Notes to the consolidated cash flow statement

	2015 £m	2014 £m

Operating profit	82.2	98.6
Depreciation of property, plant and equipment	22.4	24.5
Amortisation of intangible assets	1.8	2.2
Share of results of associates	(2.2)	(30.6)
Charge/(credit) for share-based payments	1.5	(0.4)
Gain on deemed disposal of Local World associate interest	(33.6)	-
Write-off of fixed assets	4.0	0.9
Pension administrative expenses	2.1	3.2
Pension deficit funding payments	(20.0)	(18.2)
Operating cash flows before movements in working capital	58.2	80.2
Decrease in inventories	1.1	1.9
Decrease in receivables	13.7	6.4
(Decrease)/increase in payables	(10.4)	1.6
Cash flows from operating activities	62.6	90.1

12. Net debt

The statutory net debt for the Group is as follows:

	28 December 2014 £m	Cash flow £m	Derivative financial instruments* £m	Foreign exchange* £m	Loan drawn £m	27 December 2015 £m
Non-current liabilities
Loan notes	(65.3)	-	-	(2.3)	-	(67.6)
Term loan	-	-	-	-	(65.0)	(65.0)
	(65.3)	-	-	(2.3)	(65.0)	(132.6)
Current liabilities
Term loan	-	-	-	-	(15.0)	(15.0)
	-	-	-	-	(15.0)	(15.0)
Non-current assets
Derivative financial instruments	3.2	-	0.3	-	-	3.5
	3.2	-	0.3	-	-	3.5
Current assets
Cash and cash equivalents	49.0	(73.6)	-	-	80.0	55.4
	49.0	(73.6)	-	-	80.0	55.4
Net debt	(13.1)	(73.6)	0.3	(2.3)	-	(88.7)

* The impact on the loan notes of translation into Sterling at the settlement date or at the reporting date exchange rate and the impact on the derivative financial instruments of being stated at fair value at the settlement date or at the reporting date are included in the consolidated income statement within finance costs as set out in note 7.

The Group has a cross-currency interest rate swap to manage its exposure to foreign exchange movements and interest rate movements on the private placement loan notes. Fair value is calculated using discounted cash flows based upon forward rates available to the Group. The cross-currency interest rate swap is classed in level two of the financial instruments hierarchy. Level two fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly.

The contracted net debt for the Group, assuming that the private placement loan notes and the cross-currency interest rate swap is not terminated prior to maturity, is as follows:

	28 December 2014 £m	Cash flow £m	Loan drawn £m	27 December 2015 £m
Non-current liabilities
Loan notes	(68.3)	-	-	(68.3)
Term loan	-	-	(65.0)	(65.0)
	(68.3)	-	(65.0)	(133.3)
Current liabilities
Term loan	-	-	(15.0)	(15.0)
	-	-	(15.0)	(15.0)
Current assets
Cash and cash equivalents	49.0	(73.6)	80.0	55.4
	49.0	(73.6)	80.0	55.4
Net debt	(19.3)	(73.6)	-	(92.9)

The statutory net debt reconciles to the contracted net debt as follows:

	2015 £m	2014 £m

Statutory net debt	(88.7)	(13.1)
Loan notes at period end exchange rate	67.6	65.3
Loan notes at swapped exchange rate	(68.3)	(68.3)
Cross-currency interest rate swap	(3.5)	(3.2)
Contracted net debt	(92.9)	(19.3)

13. Retirement benefit schemes

Defined contribution pension schemes

The Group operates the Trinity Mirror Pension Plan (the 'TMPP Scheme'), which is a defined contribution pension scheme for qualifying employees. The assets of the TMPP Scheme are held separately from those of the Group in funds under the control of Trustees. Local World operates a Group Personal Pension Plan (the 'LW Plan'), which is a defined contribution pension scheme for qualifying employees where employees hold a personal pension policy directly with Scottish Widows.

The Group implemented the Auto Enrolment legislation from 1 July 2013. The TMPP Scheme has three sections, one for members who elected to join prior to 1 May 2013 which is now closed to new members, one for members who elect to join from 1 May 2013 and one for members from 1 July 2013 who are auto enrolled. Local World will implement the Auto Enrolment legislation in 2017.

The current service cost charged to the consolidated income statement of £13.3 million (2014: £13.9 million) represents contributions of £13.1 million paid to the TMPP Scheme by the Group at rates specified in the scheme rules and contributions post acquisition of £0.2 million paid into the LW Plan. All amounts that were due have been paid over to the schemes at all reporting dates.

Defined benefit pension schemes

Background

The defined benefit pension schemes operated by the Group were closed to future accrual in 2010. The Group now has five defined benefit pension schemes following the securing of members' benefits of the five smaller schemes by way of a buy-out with insurance companies without further contributions from the Group. As part of the winding up of these schemes, surplus assets have been transferred to one of the remaining schemes.

The remaining schemes are the Mirror Group Pension Scheme (the 'Old Scheme'), the MGN Past Service Pension Scheme (the 'Past Service Scheme'), the MGN Pension Scheme (the 'MGN Scheme'), the Trinity Retirement Benefit Scheme (the 'Trinity Scheme') and the Midland Independent Newspapers Pension Scheme (the 'MIN Scheme').

The Old Scheme and the Past Service Scheme cover the liabilities for service up to 13 February 1992 for employees and former employees who worked regularly on the production and distribution of Mirror Group's newspapers. The Old Scheme was closed on 13 February 1992 and the Past Service Scheme was established to meet any liabilities which are not satisfied by payments from the Old Scheme and the Maxwell Communications Pension Plan. No contributions have been paid to the Old Scheme since 1992. The disclosures contained in this note in respect of these two schemes are combined (the 'Old Scheme/Past Service Scheme').

Characteristics

The defined benefit pension schemes provide pensions to members which are based on the final salary pension payable normally from age 65 plus surviving spouses or dependents benefits following a member's death. Benefits increase both before and after retirement either in line with statutory requirements or in accordance with the scheme rules. Such increases are either at fixed rates or in line with retail or consumer prices but subject to upper and lower limits. All of the schemes are independent of the Group with assets held independently of the Group. They are governed by Trustees who administer benefits in accordance with the scheme rules and appropriate UK legislation. The schemes each have a professional independent trustee as their Chairman with half of the remaining Trustees nominated by the members and half by the Group.

Maturity profile and cash flow

Across the schemes, the invested assets at the reporting date are expected to be sufficient to pay the uninsured benefits due up to 2043, based on the reporting date assumptions. The remaining uninsured benefit payments, payable from 2044, are due to be funded by a combination of asset outperformance and the deficit contributions currently scheduled to be paid by 2025. The liabilities relate 50% to current pensioners and their spouses or dependants and 50% relate to deferred pensioners. The average term from the reporting date to payment of the remaining benefits was around 16 years. Uninsured benefit payments in 2015, excluding transfer value payments, were £44 million, projected to rise to an annual peak in 2039 of £82 million and reducing thereafter.

Funding arrangements

The funding of the Group's schemes is subject to UK pension legislation as well as the guidance and codes of practice issued by the Pensions Regulator. Funding targets are agreed between the Trustees and the Group and are reviewed and revised usually every three years. The funding targets must include a margin for prudence above the expected cost of paying the benefits and so are different to the liability value for IAS 19 purposes. The funding deficits revealed by these triennial valuations are removed over time in accordance with an agreed recovery plan and schedule of contributions for each scheme.

The valuations of the schemes as at 31 December 2013 were completed on 9 December 2014. The valuations showed deficits of £216.0 million for the Old Scheme/Past Service Scheme, £120.7 million for the MGN Scheme, £31.9 million for the Trinity Scheme and £26.7 million for the MIN Scheme. The next valuation date of the schemes is due as at 31 December 2016 with the valuations required to be completed by 31 March 2018.

As part of the agreement of the valuations, deficit funding contributions were agreed at £36.2 million for 2015, 2016 and 2017. Contributions remain at around £36 million from 2018 to 2023 and then reduce to around £21 million for 2024 and 2025 after which contributions are due to cease. The combined deficit is expected to be eradicated by 2027 by a combination of the contributions and asset returns.

In addition, the Group agreed that in respect of dividend payments in 2015, 2016 and 2017 that additional contributions would be paid at 50% of the excess if dividends in 2015 were above 5 pence per share. For 2016 and 2017 the threshold increases in line with the increase in dividends capped at 10% per annum.

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Funding arrangements (continued)

In December 2014, the Group prepaid contributions for 2015 and 2016 of £16.5 million and £0.5 million respectively. During 2015, contributions paid to the defined benefit pension schemes were £20.0 million (2014: £18.2 million). Payments were £11.0 million (2014: £9.2 million) to the Past Service Scheme, £3.3 million (2014: £3.7 million) to the MGN Scheme, £3.7 million (2014: £2.7 million) to the Trinity Scheme and £2.0 million (2014: £2.6 million) to the MIN Scheme.

Risks

Valuations for funding and accounting purposes are based on assumptions about future economic and demographic variables. This results in risk of a volatile valuation deficit and the risk that the ultimate cost of paying benefits is higher than the current assessed liability value.

The main sources of risk are:

· Investment risk: a reduction in asset returns (or assumed future asset returns);

· Inflation risk: an increase in benefit increases (or assumed future increases); and

· Longevity risk: an increase in average life spans (or assumed life expectancy).

These risks are managed by:

· Investing in insured annuity policies: the income from these policies exactly matches the benefit payments for the members covered, removing all of the above risks. At the reporting date the insured annuity policies covered 19% of total liabilities;

· Investing a proportion of assets in government and corporate bonds: changes in the values of the bonds broadly match changes in the values of the uninsured liabilities, reducing the investment risk. At the reporting date this amounted to 39% of assets excluding the insured annuity policies;

· Investing a proportion in equities: with the aim of achieving outperformance and so reducing the deficits over the long term. At the reporting date this amounted to 50% of assets excluding the insured annuity policies; and

· The gradual sale of equities over time to purchase additional annuity policies or bonds: to further reduce risk as the schemes, which are closed to future accrual, mature.

The Group is not exposed to any unusual, entity specific or scheme specific risks. There were no plan amendments, settlements or curtailments in 2015 or during 2014 which resulted in a pension cost.

Actuarial projections at the 2015 year end showed removal of the accounting deficit by 2024 due to scheduled contributions and asset returns.

Results

For the purposes of the Group's consolidated financial statements, valuations have been performed in accordance with the requirements of IAS 19 with scheme liabilities calculated using a consistent projected unit valuation method and compared to the estimated value of the scheme assets at 27 December 2015.

The assets and liabilities of the schemes as at the reporting date are:

	Old Scheme/Past Service Scheme £m	MGN Scheme £m	Trinity Scheme £m	MIN Scheme £m

Present value of uninsured scheme liabilities	(598.6)	(484.3)	(300.5)	(98.0)
Present value of insured scheme liabilities	(175.3)	-	(75.5)	(101.4)
Total present value of scheme liabilities	(773.9)	(484.3)	(376.0)	(199.4)
Invested and cash assets at fair value	390.0	388.6	329.9	67.7
Value of insurance contracts	175.3	-	75.5	101.4
Total value of scheme assets	565.3	388.6	405.4	169.1
Net scheme (deficit)/surplus	(208.6)	(95.7)	29.4	(30.3)

Based on actuarial advice, the assumptions used in calculating the scheme liabilities and the actuarial value of those liabilities are:

	27 December 2015	28 December 2014
Financial assumptions (nominal % pa)
Discount rate	3.65	3.70
Retail price inflation rate	3.05	3.05
Consumer price inflation rate	1.85	1.85
Rate of pension increase in deferment	1.85	1.85
Rate of pension increases in payment	3.85	3.85
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65	22.0	22.0
Female currently aged 65	24.0	23.9
Male currently aged 55	22.9	22.8
Female currently aged 55	24.9	24.8

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

The estimated impact on the IAS 19 liabilities and on the IAS 19 deficit at the reporting date, due to a reasonably possible change in key assumptions over the next year, are set out in the table below:

	Effect on liabilities £m	Effect on deficit £m
Discount rate +/- 0.5% pa	-135/+148	-121/+133
Retail price inflation rate +/- 0.5% pa	+25/-25	+18/-18
Consumer price inflation rate +/- 0.5% pa	+43/-41	+43/-41
Life expectancy at age 65 +/- 1 year	+71/-69	+64/-62

The effect on the deficit is usually lower than the effect on the liabilities due to the matching impact on the value of the insurance contracts held in respect of some of the liabilities. Each assumption variation represents a reasonably possible change in the assumption over the next year but might not represent the actual effect because assumption changes are unlikely to happen in isolation.

The estimated impact of the assumption variations make no allowance for changes in the values of invested assets that would arise if market conditions were to change in order to give rise to the assumption variation. If allowance were made, the estimated impact would likely be lower as the values of invested assets would normally change in the same directions as the liability values.

The amount included in the consolidated income statement, consolidated statement of comprehensive income and consolidated balance sheet arising from the Group's obligations in respect of its defined benefit pension schemes is as follows:

Consolidated income statement	2015 £m	2014 £m

Pension scheme administrative expenses	(2.1)	(3.2)
Pension scheme finance charge	(10.9)	(11.2)
Defined benefit cost recognised in income statement	(13.0)	(14.4)

Consolidated statement of comprehensive income	2015 £m	2014 £m

Actuarial gain/(loss) due to liability experience	23.9	(7.9)
Actuarial loss due to liability assumption changes	(16.0)	(90.6)
Total liability actuarial gain/(loss)	7.9	(98.5)
Returns on scheme assets (less)/greater than discount rate	(18.9)	45.7
Total loss recognised in statement of comprehensive income	(11.0)	(52.8)

Consolidated balance sheet	2015 £m	2014 £m

Present value of uninsured scheme liabilities	(1,481.4)	(1,492.4)
Present value of insured scheme liabilities	(352.2)	(370.8)
Total present value of scheme liabilities	(1,833.6)	(1,863.2)
Invested and cash assets at fair value	1,176.2	1,191.2
Value of insurance contracts	352.2	370.8
Total value of scheme assets	1,528.4	1,562.0
Net scheme deficit	(305.2)	(301.2)

Non-current assets - retirement benefit assets	29.4	17.8
Non-current liabilities - retirement benefit obligations	(334.6)	(319.0)
Net scheme deficit	(305.2)	(301.2)

Net scheme deficit included in consolidated balance sheet	(305.2)	(301.2)
Deferred tax included in consolidated balance sheet	55.0	60.2
Net scheme deficit after deferred tax	(250.2)	(241.0)
Movement in net scheme deficit	2015 £m	2014 £m

Opening net scheme deficit	(301.2)	(252.2)
Contributions	20.0	18.2
Consolidated income statement	(13.0)	(14.4)
Consolidated statement of comprehensive income	(11.0)	(52.8)
Closing net scheme deficit	(305.2)	(301.2)

13. Retirement benefit schemes (continued)

Defined benefit pension schemes (continued)

Changes in the present value of scheme liabilities	2015 £m	2014 £m

Opening present value of scheme liabilities	(1,863.2)	(1,816.1)
Interest cost	(67.5)	(76.5)
Actuarial gain/(loss) - experience	23.9	(7.9)
Actuarial (loss)/gain - change to demographic assumptions	(4.5)	41.6
Actuarial loss - change to financial assumptions	(11.5)	(132.2)
Benefits paid	89.2	79.7
Buy-out	-	48.2
Closing present value of scheme liabilities	(1,833.6)	(1,863.2)

Changes in the fair value of scheme assets	2015 £m	2014 £m

Opening fair value of scheme assets	1,562.0	1,563.9
Interest income	56.6	65.3
Actual return on assets (less)/greater than discount rate	(18.9)	45.7
Contributions by employer	20.0	18.2
Benefits paid	(89.2)	(79.7)
Administrative expenses	(2.1)	(3.2)
Buy-out	-	(48.2)
Closing fair value of scheme assets	1,528.4	1,562.0

Fair value of scheme assets	2015 £m	2014 £m

UK equities	181.7	219.6
US equities	192.8	189.3
Other overseas equities	210.7	251.2
Property	20.4	26.8
Corporate bonds	308.7	248.7
Fixed interest gilts	70.9	56.3
Index linked gilts	81.2	79.0
Cash and other	109.8	120.3
Invested and cash assets at fair value	1,176.2	1,191.2
Value of insurance contracts	352.2	370.8
Fair value of scheme assets	1,528.4	1,562.0

All of the scheme assets have quoted prices in active markets. Scheme assets include neither direct investments in the Company's ordinary shares nor any property assets occupied nor other assets used by the Group.

14. Provisions

	Share-based payments £m	Property £m	Restructuring £m	Other £m	Total £m

At 28 December 2014	(1.4)	(9.0)	(3.6)	(16.2)	(30.2)
Charged to income statement	(0.2)	(0.1)	(15.3)	(30.1)	(45.7)
Utilisation of provision	1.3	2.4	16.1	9.2	29.0
Acquisition of subsidiary undertaking	-	(2.9)	(0.9)	-	(3.8)
At 27 December 2015	(0.3)	(9.6)	(3.7)	(37.1)	(50.7)

The provisions have been analysed between current and non-current as follows:

	2015 £m	2014 £m

Current	(43.5)	(23.3)
Non-current	(7.2)	(6.9)
	(50.7)	(30.2)

The share-based payments provision relates to National Insurance obligations attached to the future crystallisation of awards.

The property provision relates to onerous property leases and future committed costs related to occupied, let and vacant properties. This provision will be utilised over the remaining term of the leases.

The restructuring provision relates to restructuring charges incurred in the delivery of cost reduction measures. This provision is expected to be utilised within the next year.

The other provision relates to legal and other costs relating to historical litigation and other matters expected to be utilised within the next year.

15. Share capital and reserves

During the year, the Company placed 22,398,041 shares (at 158.0 pence) and issued 3,371,010 shares (at 174.3 pence) relating to the acquisition of Local World. The total share capital increased to 283,459,571 allotted, called-up and fully paid ordinary shares of 10p each. The share premium account reflects the premium on issued ordinary shares. The merger reserve comprises the premium on the shares allotted in relation to the acquisition of Local World net of £0.8 million of issue costs. The Group obtained court approval at the end of April 2014 for a reduction in the share premium account of £514.8 million to eliminate the deficit on the Company's profit and loss account reserve.

The capital redemption reserve represents the nominal value of the shares purchased and subsequently cancelled under share buy-back programmes. Cumulative goodwill written off to retained earnings and other reserves in respect of continuing businesses acquired prior to 1998 is £25.9 million (2014: £25.9 million). On transition to IFRS, the revalued amounts of freehold properties were deemed to be the cost of the asset and the revaluation reserve has been transferred to retained earnings and other reserves.

Shares purchased by the Trinity Mirror Employee Benefit Trust (the 'Trust') are included in retained earnings and other reserves at £3.7 million (2014: £11.4 million). During the prior year the Trust purchased 1,391,620 shares for a cash consideration of £2.2 million and received a payment of £2.2 million from the Company to purchase these shares. During the year, 5,929,939 shares were released to senior managers relating to grants made in prior years (2014: 3,408,484).

During the year 665,287 awards were granted to Executive Directors on a discretionary basis under the Long Term Incentive Plan (2014: 935,709). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to the continued employment of the participant and satisfaction of certain performance conditions and are required to be held for a further two years. During the year 893,873 awards were granted to senior managers on a discretionary basis under the Senior Management Incentive Plan (2014: nil). The exercise price of the granted awards is £1 for each block of awards granted. The awards vest after three years, subject to the continued employment of the participant and satisfaction of certain performance conditions. During the year 120,543 awards were granted to Executive Directors, including one former Executive Director, under the Restricted Share Plan (2014: 96,245). The awards vest after three years, subject to the continued employment of the participant.

16. Acquisition of subsidiary undertaking

On 13 November 2015, the Group acquired the 80.02% of the issued share capital of Local World Holdings Limited not previously owned. The acquisition is included in the Publishing segment in continuing operations.

The fair value of the consideration is as follows:

			£m
Cash paid to sellers			146.2
Cash settled on behalf of sellers			2.0
Equity issued to sellers			5.9
80.02% equity acquired			154.1
19.98% equity interest			38.5
Fair value of consideration			192.6

The provisional fair value of net assets acquired and the goodwill arising is as follows:

Local World Holdings Limited			£m
Other intangible assets			132.7
Fixed assets			5.1
Deferred tax			(17.2)
Provisions			(3.8)
Working Capital			(4.8)
Net debt			(11.9)
Fair value of net assets			100.1
Goodwill			92.5
Fair Value of consideration			192.6

There were no provisional fair value adjustments. Other intangible assets relates to publishing rights and titles. Working capital includes gross receivables of £34.4 million less provision for doubtful debts of £1.2 million. Goodwill arising on the acquisition is attributed to the anticipated profitability and synergies.

The acquisition of Local World Holdings Limited contributed £20.6 million of revenue (external revenue of Local World of £21.2 million less £0.6 million now being accounted for as internal printing revenue) and £2.7 million of operating profit post acquisition. The revenue and operating profit of the Group would have increased by £181.3 million (external revenue of Local World of £187.0 million less £4.9 million being accounted for as internal printing revenue and £0.8 million being accounted for as internal commission revenue) and £28.5 million (operating profit of Local World of £30.2 million less £1.7 million share of results of associates) respectively if the acquisition had been made at the beginning of the year.

The total consideration for the 80.02% of Local World not previously owned reconciles to the implied enterprise value for 100% of £220.0 million as follows:

			£m
Enterprise value			220.0
Debt and debt like items assumed at time of acquisition			(27.4)
Equity value			192.6
80.02% of equity value			154.1
Actual debt and debt like items			23.3
Transaction costs			5.6
Total consideration			183.0

16. Acquisition of subsidiary undertaking (continued)

The total consideration for the acquisition has been satisfied as follows:

			£m
Proceeds from issue of equity			34.5
Draw down from new £80.0 million term loan			80.0
Utilisation of cash balances			57.4
Consideration paid in 2015			171.9
Net cash payable in 2016 and beyond			5.2
Total cash consideration			177.1
Equity issued as part consideration			5.9
Total consideration			183.0

Consideration for the acquisition totalled £183.0 million and was funded through £34.5 million raised from placing 22.4 million shares, £5.9 million from the issue of 3.4 million of shares as part consideration, £80.0 million from a new five year term loan, £57.4 million paid through cash balances in 2015 with the balancing £5.2 million outstanding at the reporting date.

Net cash payments relating to the acquisition are as follows:

			£m
Cash paid to directly to sellers			146.2
Cash settled on behalf of sellers			2.0
			148.2
Net debt repaid			11.9
			160.1
Transaction costs paid			5.4
Debt like items paid			6.4
Cash payments in 2015			171.9
Proceeds from issue of equity			(34.5)
Net cash payments in 2015			137.4
Net cash payable in 2016 and beyond			5.2
Net cash payments			142.6

17. Reconciliation of statutory results to adjusted results

52 weeks ended 27 December 2015

	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Pension charges (c) £m	Restructuring charges (d) £m	Finance costs (e) £m	Tax items (f) £m	Adjusted results £m
Revenue	592.7	-	-	-	-	-	-	592.7
Operating profit	82.2	5.7	4.3	2.1	15.3	-	-	109.6
Profit before tax	67.2	5.7	4.3	13.0	15.3	2.0	-	107.5
Profit after tax	77.0	(1.5)	3.9	10.4	12.2	1.6	(17.2)	86.4
Basic EPS (p)	30.2	(0.6)	1.5	4.1	4.8	0.6	(6.7)	33.9

52 weeks ended 28 December 2014

	Statutory results £m	Non-recurring items (a) £m	Amortisation (b) £m	Pension charges (c) £m	Restructuring charges (d) £m	Finance costs (e) £m	Tax items (f) £m	Adjusted results £m
Revenue	636.3	-	-	-	-	-	-	636.3
Operating profit	98.6	(15.2)	4.9	3.2	14.0	-	-	105.5
Profit before tax	81.6	(15.2)	4.9	14.4	14.0	2.6	-	102.3
Profit after tax	69.8	(17.6)	4.5	11.5	11.0	2.1	-	81.3
Basic EPS (p)	28.1	(6.9)	1.8	4.6	4.4	0.8	-	32.8

(a) Non-recurring items relate to the items charged or credited to operating profit as set out in note 5.

(b) Amortisation of the Group's intangible assets and amortisation included in share of results of associates.

(c) Pension finance charge and pension administrative expenses relating to the defined benefit pension schemes as set out in note 13.

(d) Restructuring charges in respect of cost reduction measures as set out in note 14.

(e) Impact of the translation of foreign currency borrowings and fair value changes on derivative financial instruments as set out in note 7.

(f) Tax items relate to the impact of tax legislation changes due to the change in the future corporation tax rate on the opening deferred tax position and prior year tax adjustments included in the taxation credit or charge as set out in note 8.

18. Contingent liabilities

There is potential for further liabilities to arise from the outcome or resolution of the ongoing historical legal issues. Due to the present uncertainty in respect of the nature, timing or measurement of any such liabilities it is too soon to be able to reliably estimate how these matters will proceed and their financial impact.

At the 2015 year end, the Group was engaged in the potential disposal of certain titles to Edward Richard Iliffe for which Heads of Terms were announced at the time of the acquisition of Local World. In the event the Group decides not to proceed with the disposal, a break fee of £2.0 million will become payable.

This information is provided by RNS

The company news service from the London Stock Exchange

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Annual Results for 52 weeks ended 27 December 2015

Consolidated statement of comprehensive income

Consolidated statement of changes in equity

Segment revenue and results

Publishing

Segment revenue and results (continued)

Publishing

The Group's operations are located primarily in the UK. The Group's revenue by location of customers is set out below:

Defined benefit cost recognised in income statement

Share-based payments

£m

Fair value of consideration

Local World Holdings Limited

£m

Fair Value of consideration

£m

Equity value

80.02% of equity value

Total consideration

£m

Total consideration

£m

Net cash payments

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