Blue chip: Trinity sees a boost in Mirror

EXCITEMENT for investors in Trinity International (560p) last week, as news emerged of a possible tie-up with Mirror Group Newspapers. Those talks have since been shelved, although there is every possibility that Trinity will end up with a sizeable chunk of any disposals in the shape of MGN's regional titles, if a bid emerges.

The shares have been on an upward trend since 1995, with a bounce last week in the wake of the aborted talks. While the shares still lag the market over the past five years, they have still been a sound investment.

Whatever the outcome, Trinity has shown it is prepared to sit at the top table in the battle for control of Britain's regional newspaper market. And why not? Its management has the approval of the City, and its track record is second to none. The shares lag behind some of its peers, chiefly, it would appear, on concerns over a slowdown in advertising revenues. That may well be the case, but there is always a chance of this happening in the media sector: the point is how well Trinity can weather the storm. If one goes back to the last advertising recession, Trinity's regional newspaper profits held up well.

The group is well placed to grow through acquisition, with cashflow good enough to support debt-financed deals. Brokers Charterhouse Tilney reckon the company can turn in pre-tax profits of pounds 71m this year and pounds 78m in 1999, from the pounds 63.3m struck last year. That feeds through to a prospective price/earnings ratio of 15 times. That is substantially below the sector, where the likes of Southnews and Johnston Press trade on 17 and just over 15 times respectively. For anyone who wants a slice of the regional pie, Trinity is probably one of the best buys available right now.