Print decline slows at Reach

By Rhys Handley, Friday 14 December 2018

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Reach is expecting further declines in its circulation and publishing print advertising revenue for Q4, even as group revenue is boosted by the acquisition of Northern & Shell.

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Fox: performance will be "marginally ahead of expectations"

In a trading update released this morning (14 December), the publisher, formerly Trinity Mirror, announced a boost in group revenue by 23%, attributed to the acquisition of the Express and Star newspapers along with further assets from its new purchase, acquired for nearly £200m back in February.

However, group revenue was predicted on a like-for-like basis to be set to fall by 5%, when Northern & Shell’s pre-acquisition performance is accounted for. This decline incorporates a 4% fall in circulation revenue and a 15% fall in publishing print advertising, although the latter drop was kinder than Q3’s 20% decline.

Publishing digital revenue, however, is expected to grow by 5%, with display and transaction boosting by 8%.

Reach continues to integrate Northern & Shell into the wider group – a process it described as “progressing well” – and its integration is expected to deliver £3m of synergy savings, which is a boost on the £2m expectation laid down in October’s Q3 update.

Chief executive Simon Fox said: “I am pleased with the improved trading in the final quarter. This coupled with continued tight management of the business provides me with confidence that performance for the year is expected to be marginally ahead of expectations.

“We head into 2019 having made good progress with the integration of Express and Star and with clear plans in place for driving digital growth in the year ahead.”

The group also anticipates a fall in its net debt from £81m at the half-year to £55m by year-end, in part due to the disposal of vacant properties in Liverpool and Cardiff which generated £5m in proceeds.

Shares in Reach dropped to 57p as trade opened, though they had recovered to 64p at the time of writing.

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