Reach, the London-listed publisher which owns titles including the Mirror, Express and Star, reported declining profit and revenue as print and digital advertising continues to struggle.
In its full-year results up to 31 December, the print giant reported a decline in both profit and revenue for the year, as it warned about the “sector-wide decline in referral traffic” in months to come, pegging back online advertising.
Reach’s revenue was at £568.6m, down 5.4 per cent on the previous year, while its operating profit dropped by nine per cent, to dip below £100m.
Within the decline in revenue, it said print fell to £438.8m down two per cent, while digital dropped a worrying 15 per cent.
The company said however that there was “strong print circulation performance”, with revenue for that up by two per cent, in line with historical volumes, However, print advertising revenue dropped by 12 per cent to £76m.
It added that digital revenues such as open market programmatically-driven advertising dropped by 24 per cent, citing a “sector-wide decline of platform referred traffic to newsbrands”.
Reach also announced that its 2019 and 2022 Pension Triennial valuations had concluded, there was now an “agreed pathway to fully funding the schemes and from 2028 pension commitments are expected to reduce by £40m.”
It added the firm had also been given “clarity” following December’s High Court judgment with the Duke of Sussex, which “provides a resolution on time limitation for Historical Legal Issues.”
“This means that a significant number of outstanding claims can be resolved, and this should largely bring an end to future claims. The expected cost of settling has reduced by £20.2m”
Jim Mullen, Reach’s chief executive said: “This year we have successfully gained clarity on two significant long-term uncertainties in pension funding and Historical Legal Issues. With the end of these issues in sight, we have significantly reduced our obligations and have a clear path forward for the business.”
“The success of our strategy also came to the fore this year. Despite the macroeconomic pressures, we have continued to build a stronger digital business with an increasing portion of much higher yielding revenues, reducing our reliance on the open market.
“At the same time, we have expertly managed our print business, maintaining circulation revenues as well as delivering necessary cost and efficiency plans across the Group.
Looking ahead, Reach said the focus was on “building a more resilient growing digital business and delivering efficiencies”.
The industry has seen thousands of job cuts in the last few years, as newspapers grapple with spiralling costs and falling demand, in addition to the rise of free digital media.
This has led to strikes at some reach publications and even the embrace of influencers on TikTok in a bid to drive ad traffic.
Its share price in the last year has dropped by more than 35 per cent.
Reach said it is on track to deliver a reduction in operating costs of between five to six per cent this year.
“The sector-wide decline in referral traffic will impact Q1 2024 and we expect growing momentum across our digital business thereafter”, it added.