Key facts
- Reach's share price dropped 19.5% to 47.4p amid declining print and digital revenues.
- Group revenue fell 9% to £232.9m, impacted by a 22% drop in print circulation volumes.
- Digital revenue declined 11.4% to £54.2m, attributed to a significant drop in Google referrals.
- The company halved its interim dividend to 1.4p per share.
- Reach is implementing cost-saving measures, including staff reductions and contract terminations.
London-listed publisher Reach experienced a significant drop in its share price, falling 19.5% in early trading to 47.4p, as the company grapples with declining print circulation and digital engagement. The owner of titles including the Daily Express and Liverpool Echo reported a 9% decrease in revenue to £232.9m for the period, down from £256m the previous year.
Both print and digital segments contributed to the revenue slide. Print revenue declined by £16.1m to £178m, with circulation volumes falling 22%, a decrease attributed by the company to two price hikes and ongoing cost-of-living pressures. Print advertising revenue saw an 11.1% drop to £24.6m, though commercial spending related to the World Cup and other campaigns partially offset this.
Despite investments in its digital capabilities, revenue from the digital arm fell 11.4% to £54.2m. This downturn was largely due to a 40% reduction in on-platform views stemming from fewer Google referrals, alongside a 16.2% decline in off-platform revenue, even with efforts to improve monetization.
In response to the challenging trading conditions, Reach has decided to cut its interim dividend to 1.4p per share, down from 2.8p in the prior year. The company also plans to implement cost-saving measures in the second half of the year, including reductions in some teams and the termination of third-party contracts, alongside consolidating print manufacturing facilities.
Piers North, chief executive of Reach, stated the company is focusing on producing original content distinctive to its brands with a more targeted approach. This strategy has attracted 40,000 paid subscribers, moving towards a target of 75,000. Studio revenue also saw a 37% increase, with plans to invest further in video production.
Analyst Duncan Ferris noted the accelerated revenue deterioration and worsening digital challenges, particularly the impact of declining Google referrals on programmatic advertising. He suggested that while cost-cutting can preserve profits, there is a limit to its effectiveness, and shareholders may become impatient with leaner returns as Reach tests its less Google-dependent business model.