Reach signals digital recovery despite financial falls
Reach, the UK’s largest newspaper publisher is seeing a ‘strong recovery’ in digital advertising following revenue falls of 17.5% to £290.8 million for the first half of the year.
The company, which publishes the Daily Express, the Daily Star, The Sunday People, the Daily Mirror and the Sunday Mirror, revealed six-month profits of £28.9 million compared with £63.7 million last year.
However, it now says it is performing “materially ahead of market expectations” despite the coronavirus crisis.
The results show that despite print revenue falling by 20% to £241 million, circulation revenue declining by 11.5% and print advertising recording a 31.9% drop, digital revenue only decreased by 1% during the 26-week period to 28 June. In Q3, digital revenues grew by almost 13%.
By comparison, circulation revenue declined by 12.7% year-on-year during Q3 - although still a significant improvement from the 18.2% year-on-year decline seen during Q2 when the COVID-19 impact was at its worst.
During the first six months of 2020, Reach also exceeded its target of two million registered users on its websites, with three and a half million readers signing up – representing around 8% of its audience.
Reach chief executive Jim Mullen (pictured), said: “We have seen a strong recovery in the digital advertising market since the worst impacts of COVID-19 in April, which has driven a return to healthy digital revenue growth since July, assisted by increased customer engagement and loyalty.
“This illustrates the significant potential of the customer value strategy as our websites, apps and newsletters attract increased page views from our scale audience, helping to drive forward digital revenues. Circulation sales have also stabilised and shown a gradual recovery during Q2 and Q3.”
In July, Reach announced 500 anticipated job losses from within its editorial, commercial and central departments. The publisher expects this ‘transformation programme’ to save £35 million per year.
“Following the implementation of the major parts of the transformation programme, Reach now has a strong foundation to drive the next phase of the customer value strategy with increased efficiency and agility in our advertising and editorial operations,” Mullen said.