In a trading update for the three months to 25 September the media group separated out the September figures due to the impact of the Monarch’s passing.
Reach said that Q3 and September revenue performance was “distorted by impact of the passing of HM The Queen which benefited circulation but significantly reduced advertising due to the blackout during national mourning”.
Newspaper circulation in September was up 4.3% reflecting the one-off uplift, with sales at The Express and The Mirror up by around 30% on the day following the Queen's death, and on the day after her funeral.
“This upside was more than offset by an associated reduction in print advertising, which was down by 17% in July and August, but 32.2% in September.”
Reach also reported more stability in the cost of newsprint during the period.
The group’s newsprint bill in the first half of the year ballooned by 54% to £38.8m, and it cut paginations and print runs as part of measures to try and mitigate the increase.
Digital revenue for the period was up 1.1%. It rose by 5.9% in July and August, but declined by 8.1% in September was due to the industry-wide reduction in advertising spend, with multiple brands deferring or cancelling scheduled campaigns during the period of national mourning.
CEO Jim Mullen commented: “We have made further good strategic progress as we continue to deliver quality content to a growing and increasingly engaged digital audience.
“I am particularly proud of our teams who worked so tirelessly over recent weeks to produce such comprehensive, respectful, and sensitive coverage of the Queen's passing, a truly once in a generation event.”
He said that actions on costs were helping to mitigate inflationary pressures “and while macro uncertainty persists, improved revenue trends during Q3 are a positive”.
“The strength of our balance sheet underpins ongoing investment in the strategy, as we continue to transition to an increasing mix of higher quality digital earnings.”
At the same time as the trading update, Reach also announced changes to its executive team with the departure of CFO Simon Fuller by mutual agreement.
He will step down at the end of the year in order to allow for an orderly transition, and will leave the business following a period of gardening leave. He joined Reach three-and-a-half years ago.
Fuller will be replaced by Darren Fisher, most recently group director of finance at ITV.
Mullen said that Fuller had played an important role at the group, helping to steer the business through the worst of the Covid-19 pandemic.
“On behalf of all the board I would like to thank Simon for his valuable contribution, hard work and commitment,” he said.
“I am delighted to welcome Darren to Reach. He brings a strong set of financial, operational and strategic skills to the board. I am confident that he will make a strong contribution to our leadership team and the group. Darren is joining Reach at an important time, and I very much look forward to working with him to continue to execute our Customer Value strategy.”
