finance

Reach plc says trading is ahead of expectations, driven by digital momentum



Media group Reach Plc said its performance was ahead of expectations driven by momentum in its digital business.

In a six-month trading update, the Daily Record and Sunday Mail publisher reported digital revenue growth of 16.2% for the five months to 22 November, aided by increased customer engagement.

Circulation sales have remained resilient despite the recent lockdowns, Reach said, supported by management action on availability and increased cross-promotion of national and regional titles. Overall, for the five months to 22 November 2020, a decline in print revenue of 19.6% contributed to a group revenue decline of 13.9%.

The publisher, which owns insider.co.uk and Scottish Business Insider, said it expects these trends of strong digital growth and resilient circulation to continue into December.

Reach said it had introduced a new, more efficient operating model with significantly reduced group costs, underpinned by the transformation programme.

Given the cost focus and increasing digital contribution, it expects the operating margin in the second half is expected to be materially ahead of the first half.

The group is consulting on recently announced plans to consolidate its printing operation, which would involve closure of two of its six printing sites.

The group has also just completed the acquisition of the remaining 50% of the Irish Daily Star, having received regulatory approval.

This addition brings the group publishes in Ireland – north and south – to eight, plus one female lifestyle magazine and six online titles.

Reach chief executive Jim Mullen said: “The passion and talent of our people continue to take the group and its news brands forward to its digital future.

“Reach has continued to deliver great content and continues to drive increased customer loyalty and engagement.

“The headwinds from COVID-19 have been considerable, but while we remain mindful of potential impacts from the current lockdowns, we approach the end of the year with a strong and growing digital business, resilient print circulation sales, and a new, efficient operating model.”

Mullen added: “Our customer value strategy is now entering a new phase, with an increased focus on business intelligence and insight.

“The launch of the Reach ID, which will deliver a single view of customer activity across our national and regional network, is on track for December.”



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