Trinity Mirror cancels £65m distribution contract

Trinity Mirror has cancelled its £65 million-a-year newspaper distribution contract with Dawson Holdings, following an announcement yesterday that the company plans to cease operating.

Dawson Holdings has been forced to close its entire magazine and distribution arm after losing several high-profile contracts, including a £81 million-a-year deal with News International.

Trinity Mirror pulled out after the company announced that it was set to lose a £52 million contract with Telegraph Media Group and a £84 million deal with Associated Newspapers.

Dawson Holdings is also expected to lose magazine contracts with Comag, the joint venture between Condé Nast and Natmags, and its contract with Seymour Distribution, the joint venture between Frontline and Monkey publisher, Dennis.

In an announcement earlier today, Dawson confirmed that Trinity Mirror’s contract would not be renewed when it expires in October.

It is the eighth major contract the company is set to lose over the next 18 months, a loss of around £528 million a year in revenue.

Dawson Holding’s chairman, Nigel Freer, said: “To achieve the preservation of value, we are taking a number of actions: an orderly run-down of the remaining contracts in [Dawson] News, as profitably and cash-generatively as possible.”

The company reported a loss before tax of £17.4m for the 26 weeks to 28 March and said that it will suspend dividend payments “for the immediately foreseeable future”.

Dawson Holding attributed the operating loss to a one-off impairment charge and reorganisation costs of £23.5m at Dawson News.