City analysts have warned that further slides in advertising revenues could put it in breach of its bank covenants next year. Jonathan Barratt, of broker Kaupthing, predicts that Trinity Mirror's ad revenue estimates have to fall by just 5% in 2009 to breach its covenant.
The City is also concerned that the company may struggle to raise funds to meet the demands of its pension scheme, which has gross liabilities of around £1.5bn.
In June, Trinity Mirror issued a statement to the City which warned that for the nine weeks to 30 June, its advertising revenue was down by 12%. This included a fall of 6.5% at its UK nationals and 6% at its regionals.
But the publisher of the Daily Mirror issued a statement this afternoon insisting that it is "trading comfortably" within its banking covenants and that it does not expect to require any increase in its pension contribution this year beyond those already agreed.
It added that it had secured a new £210m bank facility in June and that no cash has yet been drawn from it.
The company's share price, which plunged dramatically in recent weeks, following a profit warning two weeks ago, has stabilised today, with its shares rising to 50.25p at 2pm.
United Kingdom
Trinity Mirror plays down pension fund top-up speculation
LONDON - Trinity Mirror has refuted speculation in the City that it may require a significant cash top-up into its pension fund, following a recent drop in its ad revenue and a subsequent profits warning.
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