REG - Reach PLC - Reach plc - Half-year Report
24/07/2025 07:00
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RNS Number : 3219S Reach PLC 24 July 2025
Reach plc ("The Company") Half Year Results - 6 months ending 30 June 2025
24 July 2025
Reach plc ("Reach", the "Group"), the UK and Ireland largest commercial news
publisher announces its half year results for the 6 month period ending 30
June 2025.
Continued digital revenue and audience growth, new priorities launched
Piers North, Chief Executive:
"Today marks the beginning of a new chapter for our business, as we launch the
priorities that will fuel our growth. These include initiatives to reach new
audiences, increase our video content and accelerate our tech and AI
capabilities. Crucially, we'll do more work to diversify our revenues, putting
a serious focus on adding subscriptions to our revenue mix.
"Over the past six months we have performed well. Our audience growth has been
driven by our innovative content and distribution hubs, our in-house
recommender tools, and our US expansion. Digital revenue continues to grow,
supported by reliable print revenues, despite a challenging market and set
against a strong events comparator.
"With our market leading scale, editorial impact at both national and local
levels, and strong operating profit margin, we are confident that our
priorities will set us up for future success."
Teams delivering to plan
Financial Summary
6 months ending 30 June 25 Adjusted results((1)) Statutory results
HY25 HY24 Change HY25 HY24 Change
Revenue £m 256.0 265.0 (3.4)% 256.0 265.0 (3.4)%
Operating profit £m 44.8 44.5 0.6% 29.7 36.8 (19.1)%
Operating profit margin % 17.5 16.8 0.7% 11.6 13.9 (2.3)%
Earnings per share Pence 10.7 10.1 5.9% 6.6 7.8 (15.4)%
Net debt ((2)) £m (26.0) (12.3) 13.7 (26.0) (12.3) 13.7
Dividend per share Pence 2.88 2.88 - 2.88 2.88 -
· Revenue declined 3.4% to £256.0m, Print revenue of £194.1m (HY24: £204.0m)
was down 4.8%, while digital revenue continued to grow to £61.1m (HY24:
£60.0m), up 1.8%.
· Both print circulation revenue £144.3m (HY24: £149.9m) and print advertising
revenue £27.7m (HY24: £32.7m) outperformed the volume decline, which remains
broadly in line with historical trends.
· Adjusted operating profit of £44.8m was slightly ahead of the prior year with
an improved operating profit margin of 17.5% (HY24: 16.8%).
· Year-on-year page views, a measure for on-platform audience volumes, were up
6% with the scaling of our content hub driving improved levels of productivity
and more effective distribution.
· Within digital, Direct revenues((3)) declined 7.9%, reflecting the tough
comparative and weaker market backdrop especially for our local business.
Indirect digital revenues((4)) grew 9.2% supported by the growth in page views
and off-platform revenues including social.
· The Group continues to efficiently manage costs and cash: operating costs
declined 4.2% to £212.4m (HY24 £221.8m) with overheads well controlled.
· The Group generated an adjusted operating cash flow of £45.8m (HY24:
£57.7m)((5)), strong levels of cash conversion of 102% (HY24: 130%) and
closing net debt of £(26.0)m (FY24: £(14.2)m).
· Interim dividend maintained at 2.88p.
Three priorities for growth: Connecting, accelerating and diversifying
Our three priorities for growth will see us build on past successes while also
introducing new initiatives.
Connecting with audiences
● Attracting new audiences, on and off platform
● Driving deeper levels of engagement
● Putting video and audio content at the centre of our newsrooms
● Differentiating our brands with target audiences
Accelerating the use of tech and AI
● Upgrading our data platform
● Progressing our advertising cohort strategy
● Innovating with AI
● Scaling B2B tools
Diversifying revenues
● Developing and rolling out digital subscriptions
● Driving continued growth in affiliates and ecommerce
● Increasing commercialisation of video content
These will be underpinned by efficient cost and cash management, including an
ongoing reduction of operating costs, simplification of the organisation, and
further optimisation of the print business.
FY25 Outlook: Confident in delivering market expectations
We remain confident about our future, with strong fundamentals and three clear
priorities for growth. The macroeconomic environment remains uncertain and we
are mindful of the dynamic referrer environment and impacts from a changing
regulatory landscape. Managing change is not new to us and our experienced
teams will continue to navigate these challenges to deliver digital revenue
growth and optimise Print. With our focus on efficiently managing our cost
base, we expect to meet our 4-5% adjusted operating costs saving target, in
line with previous guidance. Whilst July's referral volumes were impacted by
Google's recent core update, we remain confident in delivering market
expectations for the full year.((6))
( )
Q2 25 trading momentum improved despite strong comparative performance
2025 Q1 YOY % Q2 YOY % HY YOY %
Digital revenue 1.6 2.1 1.8
Print revenue (5.1) (4.6) (4.8)
Circulation revenue (4.0) (3.4) (3.7)
Advertising revenue (12.5) (18.2) (15.4)
Group revenue (3.7) (3.1) (3.4)
Group revenue declined just 3.1%, within this Digital revenue grew 2.1% in Q2
25 with improved momentum, despite the strong comparative period activity
around key events including the Men's European football championship and the
Taylor Swift tour. Indirect revenues continue to perform strongly, supported
by growing audience numbers, which increased 4%. Direct revenues were impacted
by the macroeconomic backdrop, which was felt most acutely across our local
markets. We remain focused on growing revenues outside our core advertising
model, with diversified revenues growing 10%((7)) driven by ecommerce and
affiliates.
In Print, circulation revenues remain a reliable revenue stream, supported by
our strong promotional activity. We also continue to see additional revenue
from standalone printed products with the football souvenir specials proving
popular. Headline growth Print advertising revenue performance has been
impacted by the strong comparative.
Notes:
((1)) Set out in note 18 is the reconciliation between the statutory and adjusted
results.
((2)) Net debt balance comprises cash and cash equivalents of £12.0m (inclusive of
£2.9m restricted cash) (note 14) less bank borrowings of £38.0m (note 14)
but excludes lease obligations.
((3)) Direct digital revenues are advertising or commercial revenues generated from
direct engagement with the advertiser, agency or consumer.
((4)) Indirect revenues relate to advertising and commercial revenues which is
generated indirectly such as revenue on social platforms (off-platform) or
programmatically on owned and operated websites (on-platform):
((5)) An adjusted cash flow is presented in note 19 which reconciles the adjusted
operating profit to the net change in cash and cash equivalents. Note 20
provides a reconciliation between the statutory and adjusted cash flows.
((6)) Market expectations compiled by the company are an average of analyst
published forecasts - consensus adjusted operating profit for FY25 is £99.0m
((7)) Diversified revenues are a subset of Direct revenues which include
subscriptions, affiliates, ecommerce and partnerships.
Piers North, Chief Executive Officer and Darren Fisher, Chief Financial
Officer will be hosting a webcast at 9:00am (UK) on 24 July 2025. It will be
followed by a live question and answer session. The presentation slides will
be available on www.reachplc.com from 7.00am (UK). You can join the webcast to
watch the presentation or listen to the Q&A via the following weblink,
which you can copy and paste into your browser Reach PLC - Half Year Results
2025
(https://stream.brrmedia.co.uk/broadcast/6863a06d038aba0012e39c17/686baa7ec36b2d001387385c)
.
Enquiries
Reach communications@reachplc.com
Piers North, Chief Executive Officer
Darren Fisher, Chief Financial Officer
Lija Kresowaty, Head of External Communications
Jo Britten, Investor Relations Director jo.britten@reachplc.com
+44 (0)7557 557447
Teneo reachplc@teneo.com
Giles Kernick +44 (0)207 353 4200
About Reach
We're Reach plc, the UK's and Ireland's largest commercial news publisher. We
connect with people on and offline, via 120 trusted brands, from national
titles like the Mirror, Express, Daily Record and Daily Star, to local brands
like MyLondon, BelfastLive and the Manchester Evening News, to our US titles.
Every month, we reach over 70% of the UK online population as well as 10% of
the US population, with over 100m social followers around the world.
LEI: 213800GNI5XF3XOATR61
Classification: 3.1 Additional regulated information required to be disclosed
under the laws of the United Kingdom
Forward looking statements
This announcement has been prepared in relation to the financial results for
the six months ended 30 June 2025. Certain information contained in this
announcement may constitute 'forward-looking statements', which can be
identified by the use of terms such as 'may', 'will', 'would', 'could',
'should', 'expect', 'seek, 'anticipate', 'project', 'estimate', 'intend',
'continue', 'target', 'plan', 'goal', 'aim', 'achieve' or 'believe' (or the
negatives thereof) or words of similar meaning. Forward-looking statements can
be made in writing but also may be made verbally by members of management of
the Company (including, without limitation, during management presentations to
financial analysts) in connection with this announcement. These
forward-looking statements include all matters that are not historical facts
and include statements regarding the Company's intentions, beliefs or current
expectations concerning, among other things, the Company's results of
operations, financial condition, changes in global or regional trade
conditions, changes in tax rates, liquidity, prospects, growth and strategies.
By their nature, forward-looking statements involve risks, assumptions and
uncertainties that could cause actual events or results or actual performance
or other financial condition or performance measures of the Company to differ
materially from those reflected or contemplated in such forward-looking
statements. No representation or warranty is made as to the achievement or
reasonableness of and no reliance should be placed on such forward-looking
statements. The forward-looking statements reflect knowledge and information
available at the date of this announcement and the Company does not undertake
any obligation to update or revise any forward-looking statement, whether as a
result of new information or to reflect any change in circumstances or in the
Company's expectations or otherwise.
Chief Executive's Review
I am proud to have been at Reach for over ten years and what has always
excited me about the business is that despite our many advantages and
strengths, we still have so much potential to unlock. It is this sense of huge
opportunity that has informed my approach since I took on this role in April.
Despite the challenges that face any media business right now, I recognise
what makes our business remarkable - market-leading scale, editorial impact at
both national and local levels, and strong operating profit margins.
In this announcement, we will not only be looking back at the last six months
but also forward, identifying our priorities for growth. I must be clear that
there is no silver bullet, especially against the tough market we're operating
in. But there are plenty of opportunities and the team and I have a plan in
place to seize these.
This renewed focus will put us in a strong position and ensure that we are
ready to reap the benefits of our scale, our connection with our audience and
our ability to generate revenue regardless of market conditions.
H1 performance
It's encouraging to report that our digital business and audience remained in
growth this half year. Momentum picked up in Q2 and we delivered over 2%
growth, despite national insurance increases, and a strong events comparator.
Going forward we'll be explaining our digital revenues in two parts. Firstly,
Direct revenues, which has declined 7.9%, reflecting the challenging macro
backdrop, especially for local. By contrast, Indirect revenues, which includes
our programmatic business, grew 9.2% helped by the growth in page views which
were up 6%.
The content hub continued to support our audience growth, in addition to our
distribution team's increasingly sophisticated use of data. Our proprietary AI
tools, which recommend content to keep our audiences with us for longer, drove
an additional 10% of our page views. The growth of our US brands also
contributed, with audiences up over a third since this time last year, and
plenty more still to play for in that large market.
Our work with video has progressed, with social video views doubling and
social revenue increasing seven fold. The Studio team and our newly built
facilities have supported high quality video content, allowing for engaging
interviews around everything from VE Day to Eurovision. Across all formats and
platforms, our journalists continued to deliver great content that resonates
with our audience, including the Mirror's Missed campaign which aside from
shining a light on underreported missing persons cases, has already
successfully reunited one teenager and his family. All our titles continue to
deliver engaging day-to-day reporting, with the Express reporting from the
front lines in Ukraine and the Manchester Evening News uncovering a local
Neo-Nazi group, which led to nine arrests. Sport continues to do very well for
us across many formats and brands, and in the last few months our print
standalones have performed especially well, celebrating big club wins for the
likes of Crystal Palace, Arsenal Women's and Liverpool FC.
Our commercial team has leveraged all of this good work to build on our
long-standing partnerships. We work closely with the major retailers, who
value our ability to tap into local communities, especially when coupled with
our first-party data sharing capabilities, which can double the industry
average CTR (Click-through-rate) along with growing video presence. We have
more to look forward to this summer, with the upcoming launch of the
multiplatform All Out Football brand, which has already secured an important
partnership with Sky Bet.
Diversified revenues increased 6.5% year-on-year, with affiliates and OK!
Beauty Box continuing to deliver, and Yimbly growing well, benefitting from
the seasonal outdoor market and generating over £1.0m Gross Merchandise Value
(GMV).
We continue to see good results from our print business, which generated
revenue of £194m despite the volume decline, and Group operating costs were
down 4.2%
Taking all this together means that our profit margin increased to a very
healthy 17.5%, a stand-out number in our industry. These profits translate
to cash, with strong cash conversion of 102%, meaning that we ended the period
with headroom between net debt £26m and our RCF facility £145m.
Our priorities
I played a key role in devising and implementing our Customer Value Strategy
and know that it has put us in a good position to innovate further. In the
years that have passed since we launched that strategy, both the market and
the business have changed, and we're now ready to take our next steps,
building on some areas while also introducing some new initiatives.
Connecting with audiences
● Attracting new audiences, on and off platform
● Driving deeper levels of engagement
● Putting video and audio content at the centre of our newsroom
● Differentiating our brands with target audiences
Accelerating the use of tech and AI
● Upgrading our data platform
● Progressing our advertising cohort strategy
● Innovating with AI
● Scaling B2B tools
Diversifying revenues
● Developing and rolling out digital subscriptions
● Driving continued growth in affiliates and ecommerce
● Increasing commercialisation of video content
These strategic priorities will be underpinned by efficient cost and cash
management, including an ongoing reduction of operating costs, simplification
of the organisation, and further optimisation of the print business. As we
said in March, we have a clear target of saving 4-5% across our operating
costs and are currently delivering in line with this target.
Of course, effective change depends on our teams pulling in the same
direction. We've worked to develop our shared purpose and vision - to meet
people where they live, both on and offline, through their locations, passions
and values. Thank you to the many colleagues who have fed into our strategic
planning so far and to everyone at Reach as we deliver on these focus areas.
Our environmental targets
As always, we continue to operate as a responsible business. Earlier this
spring we took an important step as we announced the validation of near-term
Science Based targets. Improving our environmental impact continues to be
important for our readers, our colleagues and our advertising partners, so
this represents an important step in demonstrating the strength of our
commitment.
Looking forward
Our priorities for growth are clear and I am confident that delivering these
will move the business to a new phase in its development. Nonetheless I remain
mindful of the backdrop, with an unhelpful macro environment, and the
perennial risk in the actions of the dominant tech platforms affecting our
distribution channels. We recognise the moving parts in the regulatory
landscape, with the voluntary adoption of the less healthy food advertising
legislation from Q4 and the CMA's decision to designate Google with Strategic
Market Status to improve competition in search.
Managing change is not new to us and I will be relying on our experienced
teams to navigate these challenges with a clear view on how to deliver value
for our shareholders as well as drive success for all our stakeholders. Thank
you again to all our teams as we move at pace on our three priority areas. We
have a lot to do but also plenty to gain, and I look forward to sharing
further details as well as initial progress in March.
Finance review
Delivering our plans
2025 remained challenging with a volatile macroeconomic backdrop, the
introduction of the additional national insurance burden and a tough events
comparative. Despite these headwinds, we have delivered good results and are
on track with our plans. Digital revenue and audience have grown year-on-year
and print remains a reliable revenue stream.
Digital revenues grew 1.8% to £61.1m and audience, measured by on-platform
page views, increased 6%. Taking these two factors together meant that our
RPM, or revenue per thousand page views, declined 4%. Our three priorities
announced today recognise the importance of both Direct and Indirect revenues
for our future success and provide improved visibility on our performance and
progress.
Direct revenues are advertising or commercial revenues that are generated from
direct engagement with the advertiser, agency or consumer. This includes areas
such as direct sales and agency revenues as well as our B2B offering, Mantis.
Diversified revenues are a subset of direct and include subscriptions,
affiliates ecommerce and partnerships. Over the last six months Direct
revenues have declined 7.9% due to the tough macroeconomic backdrop,
especially for our local business.
Conversely, Indirect revenues are advertising or commercial revenues that are
generated indirectly, such as revenue generated from social or third party
platforms (off-platform) or programmatically on owned and operated websites
(on-platform). These have performed strongly, growing 9.2% with the indirect
RPM increasing by 3%.
Underpinned by efficient cost and cash management
The three priorities are underpinned by efficient cost and cash management,
maintaining our strong track record in consistently delivering costs savings,
and include:
Optimising print contribution: Print represents three quarters of Group
revenues and underpins both the profitability and cash generation of the
Group. Our operational experts managed the decline in volumes and maximised
circulation by delivering strong promotional activity and one-off standalone
products as well as ensuring that processes and distribution remain efficient.
Together this has meant that print has remained a reliable source of income.
Simplifying the organisation: The roll out of our content hub model just over
a year ago has supported a 6% audience growth this year. This structure
reduces duplication of work and establishes subject matter experts who have
gained authority across key topics. Our distribution hub has also become
increasingly sophisticated in using data to distribute content and maximise
audience.
Reducing operating costs: Labour represents around half of our cost base and
we have continued to re-adjust our labour to match the dynamic market,
offsetting some of the increases from our company-wide pay rise and increased
national insurance contributions. Over the first half of the year we have
focused on reducing overheads and our general input costs. These efforts along
with organisational efficiency and structural improvements mean that adjusted
operating costs reduced by £9.4m or 4.2% year-on year. This is at the lower
end of the cost saving target reflecting the higher volumes of print
production and associated costs. The adjusted operating margin improved by
0.7% to 17.5%. (HY24: 16.8%)
Cash and investment
Cash management remains a priority. During the period, we completed one
property disposal generating £2.1m of cash. The Group closed the period with
net debt of £26.0m (inclusive of £2.9m restricted cash) which is made up of
£12.0m of cash and the revolving credit facility drawn at £38.0m. The
Group's revolving credit facility is £145.0m and is in place until December
2028 (with a one-year extension option until December 2029).
Group cash conversion was in line with expectations at 102% supported by
continued cash management. Our key financial obligations are unchanged. As we
previously communicated, we have clarity on resolving our historical legal
issues and our financial estimates and timetable unchanged from those
communicated at the full year.
We continued to selectively invest in our business, including Mantis, our
in-house ad tech platform, as well as our US business and Yimbly, an ecommerce
marketplace which continues to scale with over 20,000 products now available.
The rollout of our new website platform to improve the user experience
continues, with over 30% of our digital estate complete.
Looking ahead
We have three clear priorities for the business: connecting with audiences,
accelerating our use of tech and AI, and diversifying our revenues. Together
these will mean we create a business with larger reach, increased levels of
productivity and efficiency and more resilience, with commercial models that
sit outside a traditional advertising-led model. All of this continues to be
underpinned by efficient cost and cash management. At the start of the year,
we committed to reducing total operating costs by 4-5%, and we are on track to
deliver this saving broadly in line with the first half of the year.
Summary income statement
The results have been prepared for the six months to 30 June 2025. The
comparative period has been prepared for the six months ending 30 June 2024.
Adjusted Adjusted Statutory Statutory
HY 2025 HY 2024 HY 2025 HY 2024
£m £m £m £m
Revenue 256.0 265.0 256.0 265.0
Costs (212.4) (221.8) (226.8) (228.8)
Associates 1.2 1.3 0.5 0.6
Operating profit 44.8 44.5 29.7 36.8
Finance costs (2.4) (2.2) (2.7) (3.9)
Profit before tax 42.4 42.3 27.0 32.9
Tax charge (8.5) (10.5) (6.1) (8.3)
Profit after tax 33.9 31.8 20.9 24.6
Earnings per share - basic 10.7 10.1 6.6 7.8
Group revenue declined by £9.0m or 3.4% to £256.0m with print decline of
4.8% and digital revenue up 1.8%.
Adjusted operating costs decreased by £9.4m or 4.2%, offsetting the decline
in revenue. The cost base benefited from improved overhead management and
labour costs have been well managed in view of the company wide pay rise along
with increases to national insurance.
Statutory operating costs were lower by £2.0m or 0.9%, driven by the decrease
in adjusted operating costs, partially offset by an increase in operating
adjusted items of £7.4m (£14.4m in HY25 versus £7.0m in HY24).
Adjusted operating profit improved £0.3m with an improved adjusted operating
profit margin of 17.5% (HY24: 16.8%). Statutory operating profit decreased by
£7.1m, primarily due to the increase in operating adjusted items.
Adjusted earnings per share increased by 0.6p or 5.9% to 10.7p. Statutory
earnings per share decreased by 1.2p to 6.6p, principally due to the decrease
in operating profit.
Revenue
HY 2025 HY 2024 YOY
Actual Actual Change
£m £m %
Digital 61.1 60.0 1.8
Print 194.1 204.0 (4.8)
Circulation 144.3 149.9 (3.7)
Advertising 27.7 32.7 (15.4)
Printing 8.6 8.8 (2.0)
Other 13.5 12.6 7.1
Other 0.8 1.0 (24.8)
Total revenue 256.0 265.0 (3.4)
Actual Actual Actual Actual
Q1 2025 Q2 2025 HY 2025 HY 2024
YOY YOY YOY YOY
% % % %
Digital revenue 1.6 2.1 1.8 (1.3)
Print revenue (5.1) (4.6) (4.8) (6.1)
Circulation (4.0) (3.4) (3.7) (3.6)
Advertising (12.5) (18.2) (15.4) (11.5)
Total Revenue (3.7) (3.1) (3.4) (5.2)
Revenue bridge
Actual YOY
£m %
HY24 revenue 265
Digital 1 2
Circulation (6) (4)
Print advertising (5) (15)
Printing & print other 1 3
Other - (25)
HY25 revenue 256 (3)
Digital revenue increased by 1.8% to £61.1m (HY24: £60.0m) and our content
and distribution hub model continues to drive productivity and improved
discoverability with digital page views increasing by 6%. These two factors
together meant that our RPM, or revenue per thousand page views, declined
4%. Within digital, Direct revenues declined 7.9% due to the tough
macroeconomic backdrop, especially for our local business. Indirect performed
strongly, growing 9.2%. We continue to grow revenues outside of core
advertising with diversified revenues growing 6.5% year-on-year.
Print revenue decreased by £9.9m to £194.1m (HY24: £204.0m). Resilient
circulation performance with revenue down 3.7% to £144.3m (HY24: down 3.6%)
as the teams expertly managed the cover price increases to offset volume
decline with more promotional activity and special editions.
Print advertising declined by £5.0m, or 15.4% year-on-year; this performance
was in line with our expectations given the strong comparative and
outperformed volume trends which were down 19% year-on-year, supported by
demand from retail and government spend including public notices.
Print revenue also includes third-party printing revenues and other
print-related revenues. Printing revenue decreased by 2.0% (HY24: down 15.2%).
Other print revenue increased by 7.1% (HY24: down 13.1%). These revenues are
largely contracted on a cost-plus basis, and reflect the external market
demand for print.
Costs
Adjusted Adjusted YOY Statutory Statutory YOY
HY 2025 HY 2024 Change HY 2025 HY 2024 Change
£m £m % £m £m %
Labour (107.4) (105.9) 1.5 (107.4) (105.9) 1.5
Newsprint (19.0) (22.2) (14.1) (19.0) (22.2) (14.1)
Depreciation and amortisation (9.7) (9.7) 0.0 (9.7) (9.7) 0.0
Production and sales related costs (30.6) (32.6) (6.2) (30.6) (32.6) (6.2)
Other (45.7) (51.4) (11.3) (60.1) (58.4) 2.5
Total costs (212.4) (221.8) (4.2) (226.8) (228.8) (0.9)
Labour represents half our cost base and these costs have increased 1.5%. We
have offset most of the inflationary pressures from the 2% company wide pay
rise and national insurance increases with some efficiency and structural
improvements. Newsprint costs are also lower from reduced newsprint volumes
with longer-term supply contracts in place through the remainder of the year
improving price stability.
Production and sales-related costs include production, distribution, marketing
and sales related costs. Over the first half there has been a focus on
reducing overheads which are included in 'Other'. Key components of this
category include: IT related costs £17.3m (HY24: £16.4m), Utilities, rates
& other office costs £10.1m (HY24: £12.4m) and other editorial costs
£8.0m (HY24: £9.8m). These overheads have been effectively managed to reduce
adjusted operating costs by £9.4m or 4.2% to £212.4m (HY24: £221.8m).
Statutory costs were lower by £2.0m or 0.9% due to lower operating costs
partially offset by higher operating adjusted items which were £7.4m higher
at £14.4m.
Operating adjusted items included in statutory costs related to the following:
Statutory Statutory
HY 2025 HY 2024
£m £m
Restructuring charges in respect of cost reduction measures (4.2) (2.7)
Property-related items (0.4) 2.0
Pension administrative expenses (4.9) (2.4)
Other items (4.9) (3.9)
Operating adjusted items in statutory costs (14.4) (7.0)
The Group estimates for historical legal issues are unchanged. As a result,
there is no increase in the provision relating to the costs associated with
dealing with and resolving civil claims in relation to historical phone
hacking and unlawful information gathering (HY24: no change).
Restructuring charges of £4.2m (HY24: £2.7m) principally relate to in-year
cost management actions taken in the period.
Pension costs of £4.9m (HY24: £2.4m) comprise external pension
administrative expenses of £2.7m (HY24: £2.4m) alongside the additional
one-off past service cost of £2.2m representing a Barber Window adjustment
attributable to the Trinity Retirement Benefit Scheme (the 'Trinity Scheme').
Property-related items comprise the loss on sale of assets of £0.1m (HY24:
profit of £4.1m), vacant freehold property-related costs of £0.2m (HY24:
£1.1m) and onerous lease and related costs of £0.1m (HY24: £1.0m).
Other adjusted items comprise of adviser costs in relation to the defined
benefit pension schemes of £3.0m (HY24: £1.7m), other restructuring-related
project costs of £1.3m (HY24: £1.4m), corporate simplification costs of
£0.3m (HY24: £0.3m), internal defined benefit pension administrative
expenses of £0.2m (HY24: £0.2m) and the Group's net legal fees in respect of
historical legal issues of £0.1m (HY24: £0.3m).
Reconciliation of statutory to adjusted results
HY2025 Statutory results Operating Pension Adjusted results
£m
adjusted finance charge £m
items £m
£m
Revenue 256.0 - - 256.0
Operating profit 29.7 15.1 - 44.8
Profit before tax 27.0 15.1 0.3 42.4
Profit after tax 20.9 12.7 0.3 33.9
Basic earnings per share (p) 6.6 4.0 0.1 10.7
The Group excludes operating adjusted items and the pension finance charge
from the adjusted results. Adjusted items relate to costs or income that
derive from events or transactions that fall within the normal activities of
the Group, but are excluded from the Group's adjusted profit measures,
individually or, if of a similar type in aggregate, due to their size and/or
nature, in order to better reflect management's view of the performance of the
Group.
Items are adjusted on the basis that they distort the underlying performance
of the business where they relate to material items that can recur (including
impairment, restructuring and tax rate changes) or relate to historical
liabilities (including historical legal and contractual issues and defined
benefit pension schemes which are all closed to future accrual).
Other items may be included in adjusted items if they are not expected to
recur in future years, such as property rationalisation, and items such as
transaction and restructuring costs incurred on acquisitions, or the profit or
loss on the sale of subsidiaries, associates or freehold buildings.
Management excludes these from the results that it uses to manage the business
and on which bonuses are based to reflect the underlying performance of the
business and believes that the adjusted results, presented alongside the
statutory results, provide users with additional useful information. Further
details on the items excluded from the adjusted results are set out in note 5.
Balance sheet and cash flows
Historical legal issues provision
The historical legal issues provision relates to the cost associated with
resolving civil claims in relation to historical phone hacking and unlawful
information gathering. Payments of £1.1m have been made during the period. At
the half year, a provision of £8.0m remains outstanding and this represents
the current best estimate of the amount required to resolve this historical
matter. Further details relating to the nature of the liability, the
calculation basis and the expected timing of payments, are set out in note 16.
Decrease in accounting pension deficit
The IAS 19 pension deficit (net of deferred tax), in respect of the Group's
defined benefit pension schemes, decreased by £13.7m from £34.0m at year end
to £20.3m at the half year. The pension deficit has fallen primarily due to
the £30.1m of contributions made during the period, partially offset by lower
growth in asset values.
Group contributions in respect of the defined benefit pension schemes in the
first half were £30.1m (HY24: £31.0m). Contributions paid to the schemes in
2025 are expected to be £55.7m under the current schedule of contributions.
This excludes the c.£5m payment to West Ferry Printers Pension Scheme. It
also excludes, an additional £5.5m which is to be transferred to secure bank
and escrow accounts during the year for two of the schemes which is recognised
in our Consolidated Balance Sheet, and which may be transferred to the
corresponding Schemes at a later date, depending on their funding status.
Profit to cash measure
This ratio is a measure of our effectiveness at working capital management. It
is calculated as our adjusted operating cash flow as a proportion of adjusted
operating profit.
HY 2025 HY 2024
£m £m
Adjusted operating profit 44.8 44.5
Depreciation and amortisation 9.7 9.7
Adjusted EBITDA 54.5 54.2
Working capital movement 1.5 14.1
Other 1.0 0.7
Associates (1.2) (1.3)
Adjusted cash generated from operations 55.8 67.7
Lease payments (3.1) (4.4)
Capital expenditure (6.9) (5.6)
Adjusted operating cash flow 45.8 57.7
Profit to cash ratio 102% 130%
During the period, adjusted operating profit was £44.8m (HY24: £44.5m) and
the adjusted operating cash inflow was £45.8m (HY24: £57.7m) with a profit
to cash ratio of 102% (HY24: 130%). The prior year was inflated from the
working capital inflow which was mainly attributable to timing differences
that largely unwound across the second half of the prior year.
The table below shows how the Group is using the cash generated from
operations to meet its financial obligations. Adjusted cash generated from
operations is adjusted operating cash flow, excluding the impact of net lease
payments and capital expenditure.
Uses of cash
HY 2025 HY 2024
£m £m
Adjusted cash generated from operations 55.8 67.7
Pension payments (30.1) (31.0)
Pension payments into escrow (2.3) -
Historical legal issues (1.1) (5.2)
Restructuring (5.9) (12.9)
Capital expenditure (6.9) (5.6)
Proceeds from disposal of property 2.1 13.1
Other (9.3) (14.2)
Cash flow before returns to shareholders 2.3 11.9
Dividends paid (14.1) (14.1)
Cash flow after returns to shareholders (11.8) (2.2)
Net debt (26.0) (12.3)
Material uses for cash include pension contributions totalling £30.1m (HY24:
£31.0m) and capital expenditure of £6.9m. Other comprises professional fees
in respect of historical legal issues and adviser costs in relation to the
defined benefit pension schemes of £4.1m (HY24: £2.2m), net lease payments
of £3.1m (HY24: £4.4m), net interest and charges paid on borrowings of
£2.0m (HY24: £1.5m), income tax paid of £1.9m (HY24: £2.1m), tax receipts
of residual overpayments previously held with HMRC of £4.8m (HY24: nil) and
other movements which account for the balance of cash flows.
The Group paid a dividend in the period of £14.1m (HY24: £14.1m).
Cash balances
Net debt at the half year is £26.0m (inclusive of £2.9m restricted cash), an
increase of £11.8m from £14.2m at the end of 2024. The Group has £38.0m
drawn down on its revolving credit facility, with the overall total cash
position of £12.0m at the half year. The Group has a revolving credit
facility of £145.0m, which expires during December 2028 with an option to
extend to December 2029.
Cash generated from operations on a statutory basis was £42.0m (HY24:
£43.1m). The Group presents an adjusted cash flow which reconciles the
adjusted operating profit to the net change in cash and cash equivalents,
which is set out in note 19. A reconciliation between the statutory and the
adjusted cash flow is set out in note 20. The adjusted operating cash flow was
£45.8m (HY24: £57.7m).
Dividends
The Board paid a final dividend for 2024 of 4.46 pence per share in May 2025.
An interim dividend for 2025 of 2.88 pence per share will be paid on 19
September 2025 to shareholders on the register on 15 August 2025.
In declaring an interim dividend of 2.88 pence per share for 2025 (HY24: 2.88
pence per share), the Board has considered all investment requirements and its
funding commitments to the defined benefit pension schemes.
Explaining the performance of our digital business
We will categorise our digital revenue between Direct and Indirect to provide
improved visibility in understanding our performance.
Direct revenues: Advertising or commercial revenues that are generated from
direct engagement with the advertiser, agency or consumer. The material areas
include direct advertising, agency and our B2B offering Mantis. A subset of
direct is diversified revenues which includes subscriptions, affiliates,
ecommerce and partnerships.
Indirect revenues: Advertising or commercial revenues that are generated
indirectly such as revenue on social platforms (off-platform) or
programmatically on owned and operated websites (on-platform).
Historical performance
FY FY HY HY HY24-25
2023 2024 2024 2025 Var
£m £m £m £m %
Direct 56.1 54.7 25.9 23.8 (7.9)
revenues
Indirect revenues 71.3 75.3 34.1 37.3 9.2
Total digital revenues 127.4 130.0 60.0 61.1 1.8
Previous description of digital revenues
Data driven revenues HY25: £26.2m to represent 43% of digital revenues (HY24:
£27.2m - 45%)
The reduction in data driven revenues reflects the weak external market
especially for the local business alongside the growth in page views and
programmatic advertising.
Principal risks and uncertainties
The Group recognises the importance of the effective understanding and
management of risk in enabling us to identify factors, both externally and
internally, that may materially affect our ability to achieve our goals. There
is an ongoing process for the identification, evaluation and management of the
principal risks faced by the Group, including emerging risks. Appropriate
mitigating actions are in place to minimise the impact of the risks and
uncertainties which are identified as part of the risk process. All risks are
considered in the context of our strategic objectives, the changing regulatory
and compliance landscape and enabling the continuity of our operations.
These principal risks and uncertainties, the risk appetite in relation to
these and the resulting actions are set out in the Reach plc 2024 Annual
Report which is available on our website at www.reachplc.com.
The principal risks and uncertainties continue to be: macroeconomic
environment; drop in digital page views; inability to recruit and retain
talent; acceleration of print circulation decline; cyber attack; supply chain
disruption; health and safety incident; published content and/or editorial
practices; lack of funding capability; and data protection failure.
Going concern statement
The directors assessed the Group's prospects, both as a going concern and its
longer term viability, at the time of approval of the Group's 2024 Annual
Report. Further information is set out in the Reach plc 2024 Annual Report.
The directors have reviewed the going concern assessment, with a particular
focus on the market-wide decline in print volumes, the impact of actions of
dominant platforms on referral traffic and our yield performance. The Group
undertakes regular forecasts and projections of trading, identifying areas of
focus for management to improve delivery of the Strategy. The Group has a
strong balance sheet and liquidity with a cash balance of £12.0m and £38.0m
drawn from its revolving credit facility which expires in December 2028
(including an option to extend by up to one year), with an additional £107.0m
remaining available.
Accordingly, the directors have adopted the going concern basis of accounting
in the preparation of the Group's half-yearly financial report.
Statement of directors' responsibilities
The directors are responsible for preparing the half-yearly financial report
in accordance with applicable laws and regulations. The directors confirm to
the best of their knowledge:
a) that the condensed consolidated interim financial statements have
been prepared in accordance with UK-adopted International Accounting Standard
34, 'Interim Financial Reporting' and the Disclosure Guidance and Transparency
Rules sourcebook of the United Kingdom's Financial Conduct Authority and that
the interim management report includes a fair review of the information
required by DTR 4.2.7 and DTR 4.2.8, namely:
i. an indication of important events that have occurred during the first six
months and their impact on the condensed consolidated interim financial
statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and
ii. material related-party transactions in the first six months and any material
changes in the related-party transactions described in the last annual report.
By order of the Board of Directors
Darren Fisher
Chief Financial Officer 24 July 2025
Condensed consolidated interim financial statements
Consolidated income statement
for the 6 months ended 30 June 2025 (6 months ended 30 June 2024 and year
ended 31 December 2024)
Adjusted Items Adjusted Items Adjusted Items
Adjusted 6 months ended Statutory Adjusted 6 months ended Statutory Adjusted year ended Statutory
6 months ended 30 June 6 months ended 6 months ended 30 June 6 months ended year ended 31 December 2024 year ended
notes 30 June 2025 (unaudited) 30 June 30 June 2024 (unaudited) 30 June 31 December 2024 (audited) 31 December 2024
2025 (unaudited) £m 2025 (unaudited) 2024 (unaudited) £m 2024 (unaudited) (audited) £m (audited)
£m £m £m £m £m £m
Revenue 4 256.0 - 256.0 265.0 - 265.0 538.6 - 538.6
Cost of sales (148.3) - (148.3) (154.0) - (154.0) (303.4) - (303.4)
Gross profit 107.7 - 107.7 111.0 - 111.0 235.2 - 235.2
Distribution costs (18.0) - (18.0) (18.1) - (18.1) (36.8) - (36.8)
Administrative expenses (46.1) (14.4) (60.5) (49.7) (7.0) (56.7) (98.9) (26.8) (125.7)
Share of results of associates 1.2 (0.7) 0.5 1.3 (0.7) 0.6 2.8 (1.3) 1.5
Operating profit 44.8 (15.1) 29.7 44.5 (7.7) 36.8 102.3 (28.1) 74.2
Interest income 6 0.1 - 0.1 0.1 - 0.1 0.2 - 0.2
Finance costs 7 (2.5) - (2.5) (2.3) - (2.3) (5.3) (2.9) (8.2)
Pension finance charge 13 - (0.3) (0.3) - (1.7) (1.7) - (3.4) (3.4)
Profit before tax 42.4 (15.4) 27.0 42.3 (9.4) 32.9 97.2 (34.4) 62.8
Tax charge 8 (8.5) 2.4 (6.1) (10.5) 2.2 (8.3) (17.5) 8.3 (9.2)
Profit for the period attributable to equity holders of the parent 33.9 (13.0) 20.9 31.8 (7.2) 24.6 79.7 (26.1) 53.6
Earnings per share Notes 2025 2025 2024 2024 2024 2024
Pence Pence Pence Pence Pence Pence
Earnings per share - basic 10 10.7 6.6 10.1 7.8 25.3 17.0
Earnings per share - diluted 10 10.6 6.5 10.0 7.7 24.9 16.7
The above results were derived from continuing operations. Set out in note 18
is the reconciliation between the statutory and adjusted results.
Consolidated statement of comprehensive income
for the 6 months ended 30 June 2025 (6 months ended 30 June 2024 and year
ended 31 December 2024)
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
notes
Profit for the period 20.9 24.6 53.6
Items that will not be reclassified to profit and loss:
Actuarial (loss)/gain on defined benefit pension schemes 13 (6.7) 29.8 11.4
Tax on actuarial (loss)/gain on defined benefit pension schemes 8 1.7 (7.5) (2.8)
Share of items recognised by associates after tax - - -
Other comprehensive (loss)/income for the period (5.0) 22.3 8.6
Total comprehensive income for the period 15.9 46.9 62.2
Consolidated cash flow statement
for the 6 months ended 30 June 2025 (6 months ended 30 June 2024 and year
ended 31 December 2024)
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
notes
Cash flows from operating activities
Cash generated from operations 11 42.0 43.1 89.5
Pension deficit funding payments 13 (30.1) (31.0) (59.2)
Pension payments into escrow 13 (2.3) - (1.9)
Income tax received/(paid) 2.9 (1.8) (2.4)
Net cash inflow from operating activities 12.5 10.3 26.0
Investing activities
Interest received 0.1 0.1 0.2
Dividends received from associated undertakings - - 1.9
Proceeds on disposal of property, plant and equipment 2.1 13.1 14.6
Purchases of property, plant and equipment (1.2) (0.4) (1.3)
Expenditure on capitalised internally generated development 12 (5.7) (5.2) (10.5)
Net cash (used in)/generated from investing activities (4.7) 7.6 4.9
Financing activities
Interest and charges paid on borrowings (2.1) (1.6) (3.9)
Dividends paid 9 (14.1) (14.1) (23.2)
Interest paid on leases (0.6) (0.6) (1.3)
Repayments of obligations under leases (2.5) (3.8) (6.0)
Purchase of own shares (0.3) - (0.6)
Drawdown/(repayment) of borrowings 3.0 (5.0) 5.0
Net cash used in financing activities (16.6) (25.1) (30.0)
Net (decrease)/increase in cash and cash equivalents (8.8) (7.2) 0.9
Cash and cash equivalents at the beginning of the period 14 20.8 19.9 19.9
Cash and cash equivalents at the end of the period 14 12.0 12.7 20.8
Consolidated statement of changes in equity
for the 6 months ended 30 June 2025 (6 months ended 30 June 2024 and year
ended 31 December 2024)
Retained earnings and other reserves
Capital £m
Share Merger redemption
capital reserve reserve Total
£m £m £m £m
At 1 January 2025 (audited) 32.2 17.4 4.4 624.6 678.6
Profit for the period - - - 20.9 20.9
Other comprehensive loss for the period - - - (5.0) (5.0)
Total comprehensive income for the period - - - 15.9 15.9
Purchase of own shares - - - (0.3) (0.3)
Credit to equity for equity-settled share-based payments - - - 1.6 1.6
Dividends paid (note 9) - - - (14.1) (14.1)
At 30 June 2025 (unaudited) 32.2 17.4 4.4 627.7 681.7
At 1 January 2024 (audited) 32.2 17.4 4.4 583.2 637.2
Profit for the period - - - 24.6 24.6
Other comprehensive income for the period - - - 22.3 22.3
Total comprehensive income for the period - - - 46.9 46.9
Credit to equity for equity-settled share-based payments - - - 0.9 0.9
Dividends paid - - - (14.1) (14.1)
At 30 June 2024 (unaudited) 32.2 17.4 4.4 616.9 670.9
At 1 January 2024 (audited) 32.2 17.4 4.4 583.2 637.2
Profit for the period - - - 53.6 53.6
Other comprehensive income for the period - - - 8.6 8.6
Total comprehensive income for the period - - - 62.2 62.2
Purchase of own shares (0.6) (0.6)
Credit to equity for equity-settled share-based payments - - - 2.5 2.5
Tax credit for equity settled share-based payments - - - 0.5 0.5
Dividends paid - - - (23.2) (23.2)
At 31 December 2024 (audited) 32.2 17.4 4.4 624.6 678.6
Consolidated balance sheet
at 30 June 2025 (at 30 June 2024 and 31 December 2024)
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
notes £m £m £m
Non-current assets
Goodwill 12 35.9 35.9 35.9
Other intangible assets 12 844.8 842.5 843.3
Property, plant and equipment 101.4 108.7 104.2
Right-of-use assets 8.6 12.1 9.9
Investment in associates 14.6 15.1 14.1
Retirement benefit assets 13 65.1 73.8 72.4
1,070.4 1,088.1 1,079.8
Current assets
Inventories 11.9 8.0 10.2
Trade and other receivables 81.7 81.1 87.6
Current tax receivable 8 1.7 8.3 6.6
Cash and cash equivalents 14 12.0 12.7 20.8
Other financial assets 13 4.2 - 1.9
111.5 110.1 127.1
Assets classified as held for sale 15 0.4 2.5 2.6
111.9 112.6 129.7
Total assets 1,182.3 1,200.7 1,209.5
Non-current liabilities
Lease liabilities 14 (20.3) (26.5) (23.0)
Retirement benefit obligations 13 (92.2) (119.9) (117.7)
Provisions 16 (20.0) (20.2) (21.5)
Deferred tax liabilities (212.3) (214.1) (210.3)
(344.8) (380.7) (372.5)
Current liabilities
Trade and other payables (101.7) (104.1) (105.3)
Borrowings 14 (38.0) (25.0) (35.0)
Lease liabilities 14 (4.5) (4.0) (4.3)
Provisions 16 (11.6) (16.0) (13.8)
(155.8) (149.1) (158.4)
Total liabilities (500.6) (529.8) (530.9)
Net assets 681.7 670.9 678.6
Equity
Share capital 17 32.2 32.2 32.2
Merger reserve 17 17.4 17.4 17.4
Capital redemption reserve 17 4.4 4.4 4.4
Retained earnings and other reserves 17 627.7 616.9 624.6
Total equity attributable to equity holders of the parent 681.7 670.9 678.6
Notes to the consolidated financial statements
for the 6 months ended 30 June 2025 (6 months ended 30 June 2024 and year
ended 31 December 2024)
1. General information
The financial information in respect of the year ended 31 December 2024 does
not constitute statutory accounts within the meaning of Section 434 of the
Companies Act 2006. A copy of the statutory accounts for that period has been
delivered to the Registrar of Companies and is available at the Company's
registered office at One Canada Square, Canary Wharf, London E14 5AP and on
the Company's website at www.reachplc.com. The auditors' report was
unqualified, did not include reference to any matters to which the auditors
drew attention by way of emphasis without qualifying the report and did not
contain a statement under section 498 (2) or (3) of the Companies Act 2006.
The financial information for the 6 months ended 30 June 2025 and the 6 months
ended 30 June 2024 do not constitute statutory accounts within the meaning of
Section 434 of the Companies Act 2006 and have not been audited. No statutory
accounts for these periods have been delivered to the Registrar of Companies.
This half-yearly financial report constitutes a dissemination announcement in
accordance with Section 6.3 of the Disclosure and Transparency Rules.
The auditors, PricewaterhouseCoopers LLP, have carried out a review of the
condensed consolidated interim set of financial statements and their report is
set out at the end of this announcement.
The half-yearly financial report was approved for issue by the directors on 24
July 2025. This announcement is available at the Company's registered office
at One Canada Square, Canary Wharf, London E14 5AP and on the Company's
website at www.reachplc.com.
2. Accounting policies
Basis of preparation
The Group's annual consolidated financial statements are prepared
in accordance with UK-adopted International Accounting Standards and with the
requirements of the Companies Act 2006 as applicable to companies reporting
under those standards. The condensed consolidated financial statements
included in this half-yearly financial report have been prepared in
accordance with the UK-adopted International Accounting Standard 34, 'Interim
Financial Reporting' and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. Taxes on
income in the interim period are accrued using the tax rate that would be
applicable to the expected total annual profit or loss for the year. There are
no material changes to the nature and type of related party transactions since
the 2024 Annual Report.
Going concern
The directors assessed the Group's prospects, both as a going concern and its
longer term viability, at the time of approval of the Group's 2024 Annual
Report. Further information is set out in the Reach plc 2024 Annual Report.
At the half year, the directors have reviewed the going concern assessment,
with a particular focus on the market-wide decline in print volumes, the
impact of actions of dominant platforms on referral traffic and our yield
performance. The Group undertakes regular forecasts and projections of
trading, identifying areas of focus for management to improve delivery of the
Strategy. The Group has a strong balance sheet and liquidity with a cash
balance of £12.0m. The Group has drawn £38.0m of its revolving credit
facility which expires on 12 December 2028 (including an option to extend by
up to one year), with an additional £107.0m remaining available.
Accordingly, the directors have adopted the going concern basis of accounting
in the preparation of the Group's half-yearly financial report.
Changes in accounting policy
The same accounting policies, presentation and methods of computation are
followed in the condensed consolidated interim financial statements as applied
in the Group's latest annual consolidated financial statements.
Alternative performance measures
The Company presents the results on a statutory and adjusted basis and revenue
trends on a statutory and where applicable, like-for-like basis. The Company
believes that the adjusted basis and like-for-like trends will provide
investors with useful supplemental information about the financial performance
of the Group, enable comparison of financial results between periods where
certain items may vary independent of business performance, and allow for
greater transparency with respect to key performance indicators used by
management in operating the Group and making decisions. Although management
believes the adjusted basis is important in evaluating the Group, they are not
intended to be considered in isolation or as a substitute for, or as superior
to, financial information on a statutory basis. Revenue trends on an actual
and like-for-like basis are the same for the 6 months ended 30 June 2025. The
alternative performance measures are not recognised measures under IFRS and do
not have standardised meanings prescribed by IFRS and may be different to
those used by other companies, limiting the usefulness for comparison
purposes. Note 18 sets out the reconciliation between the statutory and
adjusted results. An adjusted cash flow is presented in note 19 which
reconciles the adjusted operating profit to the net change in cash and cash
equivalents. Set out in note 20 is the reconciliation between the statutory
and adjusted cash flow.
Adjusted items
Adjusted items relate to costs or income that derive from events or
transactions that fall within the normal activities of the Group, but are
excluded from the Group's adjusted profit measures, individually or, if of a
similar type in aggregate, due to their size and/or nature in order to better
reflect management's view of the performance of the Group. The adjusted profit
measures are not recognised profit measures under IFRS and may not be directly
comparable with adjusted profit measures used by other companies. Details of
adjusted items are set out in notes 5 and 18.
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation
uncertainty that have a significant risk of causing a material adjustment to
the carrying amounts of assets and liabilities within the next financial year,
are discussed below:
Historical Legal Issues (note 16)
The historical legal issues provision relates to the cost associated with
resolving civil claims in relation to historical phone hacking and unlawful
information gathering. The provision consists of known claims and the
associated costs. The key uncertainties in relation to this matter relate to
how each claim progresses, the amount of any settlement and the associated
legal costs. Our assumptions have been based on historical trends, our
experience and the expected evolution of claims and costs.
In December 2023, a judgment was handed down in respect of four test claims
and as a result all claims issued after 31 October 2020 are now likely to be
dismissed as time barred, other than where individuals can demonstrate
specific exceptional circumstances. This significantly reduced the amounts
that are expected to be paid out. On 17 May 2024, the Claimants' Application
for Permission to Appeal that decision was refused. This means that the
Judge's ruling on limitation stands and no further appeal against it is
possible. This provides us with further certainty in respect of the level of
our provisioning. Whilst a large number of claimants have voluntarily
discontinued their cases since the 2023 judgment, a further 4 test claims have
been selected with the intention of finally resolving the issue of limitation
across all claims, and a trial has been listed to take place in January 2026.
There have been no changes to the provision other than settlements made during
the period. The majority of the provision is expected to be utilised within
the next two years.
Our view on the range of outcomes at the reporting date for the provision,
applying more and less favourable outcomes to all aspects of the provision is
£3m to £15m (30 June 2024: £7m to £16m and 31 December 2024: £4m to
£16m). Despite making a best estimate, the timing of utilisation and ongoing
legal matters related to the provided for claims could mean that the final
outcome is outside of the range of outcomes.
Retirement benefits (note 13)
Actuarial assumptions adopted and external factors can significantly impact
the surplus or deficit of defined benefit pension schemes. Valuations for
funding and accounting purposes are based on assumptions about future economic
and demographic variables. These result in risk of a volatile valuation
deficit and the risk that the ultimate cost of paying benefits is higher than
the current assessed liability value. Advice is sourced from independent and
qualified actuaries in selecting suitable assumptions at each reporting date.
Impairment review (note 12)
There is uncertainty in the value-in-use calculation. The most significant
area of uncertainty relates to expected future cash flows for each
cash-generating unit. Determining whether the carrying values of assets in a
cash-generating unit are impaired requires an estimation of the value in use
of the cash-generating unit to which these have been allocated. The
value-in-use calculation requires the Group to estimate the future cash flows
expected to arise from the cash-generating unit and a suitable discount rate
in order to calculate present value. Projections are based on both internal
and external market information and reflect past experience. The discount rate
reflects the weighted average cost of capital of the Group. The Group tests
the carrying value of assets at the cash-generating unit level for impairment
annually or more frequently if there are indicators that assets might be
impaired. For the 6 months to 30 June 2025, there have been no indicators of
impairment and therefore no review has been undertaken.
Property provisions (note 16)
Provisions are measured at the best estimate of the expenditure required to
settle the obligation based on the assessment of the related facts and
circumstances at each reporting date. There is uncertainty in relation to the
size and period over which the provision will be utilised and this is
dependent on our ability to sublease the vacant properties. We have assumed no
subletting but if this were to change, there could be a material impact on the
provision.
Critical judgements in applying the Group's accounting policies
In the process of applying the Group's accounting policies, described above,
management has made the following judgements that have the most significant
effect on the amounts recognised in the financial statements:
Indefinite life assumption in respect of publishing rights and titles (note
12)
There is judgement required in continuing to adopt an indefinite life
assumption in respect of publishing rights and titles. The directors consider
publishing rights and titles (with a carrying amount of £818.7m) have
indefinite economic lives due to the longevity of the brands and the ability
to evolve them in an ever-changing media landscape. The brands are central to
the delivery of the Customer Value Strategy which is delivering digital
revenue growth. At each reporting date management review the suitability of
this assumption.
Identification of cash-generating units (note 12)
There is judgement required in determining the cash-generating unit relating
to our Publishing brands. At each reporting date management review the
interdependency of revenues across our portfolio of Publishing brands to
determine the appropriate cash-generating unit. The Group operates its
Publishing brands such that a majority of the revenues are interdependent, and
revenue would be materially lower if brands operated in isolation. As such,
management do not consider that an impairment review at an individual brand
level is appropriate or practical. As the Group continues to centralise
revenue generating functions and has moved to a matrix operating structure
over the past few years, all of the individual brands in Publishing have
increased revenue interdependency and are assessed for impairment as a single
Publishing cash-generating unit.
Historical Legal Issues (note 16)
Following the judgment handed down on 15 December 2023, all claims issued
after 31 October 2020 are now likely to be considered time barred and
subsequently dismissed, other than where individuals can demonstrate there
were exceptional circumstances why they could not have been aware of their
putative claims.
Subsequently, the test claimants' application for permission to appeal was
refused by the trial judge on 9 February 2024, with claimants having a further
short period to apply for permission to appeal to the Court of Appeal. On 17
May 2024, the Application for Permission to Appeal was refused by the Court of
Appeal. This means that the Judge's ruling on limitation stands and no further
appeal against the test claims being time barred is possible. As such no
contingent liability has been disclosed in the accounts.
3. Segments
The performance of the Group is presented as a single reporting segment as
this is the basis of internal reports regularly reviewed by the Board and
chief operating decision maker (executive directors) to allocate resources and
to assess performance. The Group's operations are primarily located in the UK
and the Group is not subject to significant seasonality during the year.
4. Revenue
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Print 194.1 204.0 406.7
Circulation 144.3 149.9 298.5
Advertising 27.7 32.7 65.4
Printing 8.6 8.8 17.3
Other 13.5 12.6 25.5
Digital 61.1 60.0 130.0
Other 0.8 1.0 1.9
Total revenue 256.0 265.0 538.6
The Group's operations are located primarily in the UK.
5. Operating adjusted items
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Restructuring charges in respect of cost reduction measures (note 16) (4.2) (2.7) (8.0)
Pension administrative expenses and past service costs (note 13) (4.9) (2.4) (9.7)
Property-related items (note 18) (0.4) 2.0 1.1
Other items (note 18) (4.9) (3.9) (10.2)
Operating adjusted items included in administrative expenses (14.4) (7.0) (26.8)
Operating adjusted items included in share of results of associates (0.7) (0.7) (1.3)
Total operating adjusted items (15.1) (7.7) (28.1)
Operating adjusted items relate to costs or income that derive from events or
transactions that fall within the normal activities of the Group, but are
excluded from the Group's adjusted profit measures, individually or, if of a
similar type in aggregate, due to their size and/or nature in order to better
reflect management's view of the performance of the Group. The adjusted profit
measures are not recognised profit measures under IFRS and may not be directly
comparable with adjusted profit measures used by other companies. Set out in
note 18 is the reconciliation between the statutory and adjusted results which
includes descriptions of the items included in adjusted items.
The Group estimates for historical legal issues are unchanged. As a result,
there is no increase in the provision relating to the costs associated with
resolving civil claims in relation to historical phone hacking and unlawful
information gathering (6 months ended 30 June 2024: no change and year ended
31 December 2024: no change) (note 16).
Restructuring charges of £4.2m (6 months ended 30 June 2024: £2.7m and year
ended 31 December 2024: £8.0m) principally relate to in-year cost management
actions taken in the period.
Pension costs of £4.9m (6 months ended 30 June 2024: £2.4m and year ended 31
December 2024: £9.7m) comprise external pension administrative expenses of
£2.7m (6 months ended 30 June 2024: £2.4m and year ended 31 December 2024:
£4.7m) alongside the additional one-off past service cost of £2.2m
representing a Barber Window adjustment attributable to the Trinity Retirement
Benefit Scheme (the 'Trinity Scheme'). The one-off past service cost of £5.0m
for the year ended 31 December 2024 related to a Barber Window equalisation
adjustment identified by the Trustees of the West Ferry Printers Pension
Scheme (the 'WF Scheme') during 2024.
Property-related items comprise the loss on sale of assets of £0.1m (6 months
ended 30 June 2024: profit of £4.1m and year ended 31 December 2024: profit
of £5.5m), vacant freehold property-related costs of £0.2m (6 months ended
30 June 2024: £1.1m and year ended 31 December 2024: £1.5m) and onerous
lease and related costs of £0.1m (6 months ended 30 June 2024: £1.0m and
year ended 31 December 2024: £2.8m). The year ended 31 December 2024 also
included the impairment of vacant freehold property costs of £0.1m.
Other adjusted items comprise adviser costs in relation to the defined benefit
pension schemes of £3.0m (6 months ended 30 June 2024: £1.7m and year ended
31 December 2024: £6.1m), other restructuring-related project costs of £1.3m
(6 months ended 30 June 2024: £1.4m and year ended 31 December 2024: £2.1m),
corporate simplification costs of £0.3m (6 months ended 30 June 2024: £0.3m
and year ended 31 December 2024: £0.5m), internal defined benefit pension
administrative expenses of £0.2m (6 months ended 30 June 2024: £0.2m and
year ended 31 December 2024: £0.5m) and the Group's net legal fees in respect
of historical legal issues of £0.1m (6 months ended 30 June 2024: £0.3m and
year ended 31 December 2024: £1.0m).
6. Interest income
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Interest income on bank deposits 0.1 0.1 0.2
Interest income 0.1 0.1 0.2
7. Finance costs
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Interest and charges on borrowings (1.9) (1.7) (4.0)
Interest on lease liabilities (0.6) (0.6) (1.3)
Adjusted finance costs (2.5) (2.3) (5.3)
Other interest costs (note 8) - - (2.9)
Finance costs (2.5) (2.3) (8.2)
8. Tax charge
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Corporation tax charge for the period (2.4) (1.8) (2.1)
Prior period adjustment - - 0.6
Current tax charge (2.4) (1.8) (1.5)
Deferred tax charge for the period (3.7) (6.5) (10.8)
Prior period adjustment - - 3.1
Deferred tax charge (3.7) (6.5) (7.7)
Tax charge (6.1) (8.3) (9.2)
Reconciliation of tax charge 6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Profit before tax 27.0 32.9 62.8
Standard rate of corporation tax of 25.0% (2024: 25.0%) (6.8) (8.2) (15.7)
Tax effect of permanent items that are not included in determining taxable - 0.1 1.8
profit
Variance in overseas tax rates 0.6 0.6 1.2
Deferred tax not recognised - (0.9) (9.0)
Prior period adjustment - - 3.7
Capital loss on disposal of property - - 8.4
Tax effect of share of results of associates 0.1 0.1 0.4
Tax charge (6.1) (8.3) (9.2)
The standard rate of corporation tax for the period is 25.0% (2024: 25.0%).
The reduction in the current tax receivable during the period is primarily
driven by the receipt of £4.8m relating to residual overpayments previously
held with HMRC following the agreement of the deductibility of certain costs.
£2.9m of related interest (note 7) was recognised in 2024 upon agreement of
this position, reducing the current tax receivable.
The tax on actuarial gains or losses on defined benefit pension schemes taken
to the consolidated statement of comprehensive income is a deferred tax credit
of £1.7m (6 months ended 30 June 2024: charge of £7.5m and year ended 31
December 2024: charge of £2.8m).
9. Dividends
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
Pence Pence Pence
Per share Per share Per share
Amounts recognised as distributions to equity holders in the period
Dividends paid per share - prior year final dividend 4.46 4.46 4.46
Dividends paid per share - interim dividend - - 2.88
Total dividends paid per share 4.46 4.46 7.34
Dividend proposed per share but not paid nor included in the accounting 2.88 2.88 4.46
records
The Board has approved an interim dividend for 2025 of 2.88 pence per share.
On 1 May 2025, the final dividend proposed for 2024 of 4.46 pence per share
was approved by shareholders at the Annual General Meeting and was paid on 30
May 2025. The total dividend payment amounted to £14.1m.
10. Earnings per share
Basic earnings per share is calculated by dividing profit for the period
attributable to equity holders of the parent by the weighted average number of
ordinary shares during the period and diluted earnings per share is calculated
by adjusting the weighted average number of ordinary shares in issue on the
assumption of conversion of all potentially dilutive ordinary shares.
6 months ended 6 months ended Year ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
Thousand Thousand Thousand
Weighted average number of ordinary shares for basic earnings per share 315,863 315,171 315,352
Effect of potential dilutive ordinary shares in respect of share awards 3,573 3,253 4,582
Weighted average number of ordinary shares for diluted earnings per share 319,436 318,424 319,934
The weighted average number of potentially dilutive ordinary shares not
currently dilutive was 10,404,299 (30 June 2024: 6,632,678 and 31 December
2024: 7,625,633).
Statutory earnings per share
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2025 2024 2024
(unaudited) (unaudited) (audited)
Pence Pence Pence
Earnings per share - basic 6.6 7.8 17.0
Earnings per share - diluted 6.5 7.7 16.7
Adjusted earnings per share
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2025 2024 2024
(unaudited) (unaudited) (audited)
Pence Pence Pence
Earnings per share - basic 10.7 10.1 25.3
Earnings per share - diluted 10.6 10.0 24.9
Set out in note 18 is the reconciliation between the statutory and adjusted
results.
11. Cash generated from operations
6 months 6 months Years
ended ended ended
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Operating profit 29.7 36.8 74.2
Depreciation of property, plant and equipment 4.2 4.8 9.4
Depreciation of right-of-use assets 1.3 1.4 2.8
Amortisation of other intangible assets 4.2 3.5 7.4
Impairment of property, plant and equipment - - 0.4
Impairment of right-of-use assets - 0.6 0.9
Impairment of other intangible assets - - 0.6
Loss/(profit) on disposal of property, plant and equipment 0.1 (4.1) (5.5)
Profit on early termination of leases - - (0.3)
Share of results of associates (0.5) (0.6) (1.5)
Share-based payments charge 1.1 0.9 2.5
Pension administrative expenses and past service costs 4.9 2.4 9.7
Operating cash flows before movements in working capital 45.0 45.7 100.6
(Increase)/decrease in inventories (1.7) 3.4 1.2
Decrease/(increase) in receivables 5.7 3.7 (2.6)
Decrease in payables (7.0) (9.7) (9.7)
Cash generated from operations 42.0 43.1 89.5
12. Goodwill and other intangible assets
Other intangible assets
Goodwill Publishing rights Internally generated assets Total
and titles
£m £m £m £m
Cost
At 1 January 2025 (audited) 189.9 2,100.3 40.0 2,330.2
Additions - - 5.7 5.7
At 30 June 2025 (unaudited) 189.9 2,100.3 45.7 2,335.9
Accumulated amortisation and impairment
At 1 January 2025 (audited) (154.0) (1,281.6) (15.4) (1,451.0)
Charge for the period - - (4.2) (4.2)
At 30 June 2025 (unaudited) (154.0) (1,281.6) (19.6) (1,455.2)
Carrying amount
At 31 December 2024 (audited) 35.9 818.7 24.6 879.2
At 30 June 2025 (unaudited) 35.9 818.7 26.1 880.7
During the period, the Group capitalised internally generated assets relating
to software and website development costs of £5.7m (6 months ended 30 June
2024: £5.2m and year ended 31 December 2024: £10.5m). These assets are
amortised using the straight-line method over their estimated useful lives
(3-5 years).
Publishing rights and titles are not amortised. There is judgement required in
continuing to adopt an indefinite life assumption in respect of publishing
rights and titles. The directors consider publishing rights and titles (with a
carrying amount of £818.7m) have indefinite economic lives due to the
longevity of the brands and the ability to evolve them in an ever-changing
media landscape. The brands are central to the delivery of the Customer Value
Strategy which is delivering digital revenue growth. This, combined with our
inbuilt and relentless focus on maximising efficiency, gives confidence that
the delivery of sustainable growth in revenue, profit and cash flow is
achievable in the future.
There is judgement required in determining the cash-generating units. At each
reporting date, management reviews the interdependency of revenues across our
Publishing brands to determine the appropriate cash-generating unit. The Group
operates its Publishing brands such that a majority of the revenues are
interdependent and revenue would be materially lower if brands operated in
isolation. As such, management does not consider that an impairment review at
an individual brand level is appropriate or practical. As the Group continues
to centralise revenue generating functions and has moved to a matrix operating
structure over the past few years all of the individual brands in Publishing
have increased revenue interdependency and are assessed for impairment as a
single Publishing cash-generating unit.
The Group tests the carrying value of assets at the cash-generating unit level
for impairment annually or more frequently if there are indicators that assets
might be impaired. The review is undertaken by assessing whether the carrying
value of assets is supported by their value-in-use which is calculated as the
net present value of future cash flows derived from those assets, using cash
flow projections. If an impairment charge is required this is allocated first
to reduce the carrying amount of any goodwill allocated to the cash-generating
unit and then to the other assets of the cash-generating unit but subject to
not reducing any asset below its recoverable amount. No indicators have been
identified as at 30 June 2025. The last annual impairment test was undertaken
as at 31 December 2024. The details of the impairment assessment are included
in note 16 of the 2024 Annual Report.
13. Retirement benefit schemes
Defined contribution pension schemes
The Group operates defined contribution pension schemes for qualifying
employees, where the assets of the schemes are held separately from those of
the Group in funds under the control of Trustees.
The current service cost charged to the consolidated income statement for the
period of £7.9m (6 months ended 30 June 2024: £7.8m and year ended 31
December 2024: £15.8m) represents contributions paid by the Group at rates
specified in the scheme rules. All amounts that were due have been paid over
to the schemes at all reporting dates.
Defined benefit pension schemes
Background
The defined benefit pension schemes operated by the Group are all closed to
future accrual. The Group has six defined benefit pension schemes:
• the MGN Pension Scheme (the 'MGN Scheme'), the Trinity Retirement Benefit
Scheme (the 'Trinity Scheme'), the Midland Independent Newspapers Pension
Scheme (the 'MIN Scheme'), the Express Newspapers 1988 Pension Fund (the 'EN88
Scheme'), the Express Newspapers Senior Management Pension Fund (the 'ENSM
Scheme') and the West Ferry Printers Pension Scheme (the 'WF Scheme').
Characteristics
The defined benefit pension schemes provide pensions to members, which are
based on their final pensionable salary, normally from age 65 (although some
schemes have some pensions normally payable from an earlier age) plus
surviving spouses or dependants' benefits following a member's death. Benefits
increase both before and after retirement either in line with statutory
minimum requirements or in accordance with the scheme rules if greater. Such
increases are either at fixed rates or in line with retail or consumer prices
but subject to upper and lower limits. All of the schemes are independent of
the Group with assets held independently of the Group. They are governed by
Trustees who administer benefits in accordance with the scheme rules and
appropriate UK legislation. The schemes, with the exception of the ENSM
Scheme, each have a professional or experienced independent Trustee as their
Chairman with generally half of the remaining Trustees nominated by the
members and half by the Group.
Maturity profile and cash flow
Across all of the schemes, the uninsured liabilities related 60% to current
pensioners and their spouses or dependants and 40% to deferred pensioners. The
average term from the period end to payment of the remaining uninsured
benefits is expected to be around 10.5 years. Uninsured pension payments by
the schemes in 2024, excluding lump sums and transfer value payments, were
£77m and these payments by the schemes are projected on the prior reporting
date assumptions to rise to an annual peak in 2034 of £89m and reduce
thereafter.
Funding arrangements
The funding of the Group's schemes is subject to UK pension legislation as
well as the guidance and codes of practice issued by the Pensions Regulator.
Funding targets are agreed between each Trustee board and the Group and are
reviewed and revised usually every three years. The funding targets must
include a margin for prudence above the expected cost of paying the benefits
and so are different to the liability value for IAS 19 purposes. The funding
deficits revealed by these triennial valuations are removed over time in
accordance with an agreed recovery plan and schedule of contributions for each
scheme (where applicable). The latest valuation date for the schemes was 31
December 2022. The ENSM Scheme commenced winding up in February 2024.
The funding valuation of the MGN Scheme at 31 December 2022 was agreed on 9
October 2023. This showed a deficit of £219.0m. The Group paid contributions
of £23.0m to this scheme in the first half of 2025 and the agreed schedule of
contributions includes payments of £46.0m per annum (pa) from 2025 until
January 2028. During 2024, the Trustees of the MGN Scheme purchased a bulk
annuity policy insuring 18% of the total liabilities of the scheme, on the IAS
19 basis.
The funding valuation of the Trinity Scheme at 31 December 2022 was agreed on
28 March 2024. This showed a deficit of £5.8m. The current schedule of
contributions includes payments of £4.5m pa from 2025 to 2027, or if earlier,
until the Scheme has reached 100% funding on the technical provisions basis.
100% funding on this basis was confirmed during 2024 and contributions
totalling £2.3m during the period have subsequently been diverted into an
escrow account which totals £4.2m at the reporting date (30 June 2024: £nil
and 31 December 2024: £1.9m). During 2025, the Scheme Actuary identified that
a portion of members' early retirement benefits were incorrectly calculated
based on being payable from age 65, rather than from age 60. The £2.2m
estimated impact of the required adjustment has been recognised in the
consolidated income statement as a past service cost during the period. The
Group does not expect this to materially impact the funding of the Trinity
Scheme.
The funding valuation of the MIN Scheme at 31 December 2022 was agreed on 28
March 2024. This showed a deficit of £53.3m. The Group paid contributions of
£4.9m to this scheme in the first half of 2025 and the agreed schedule of
contributions features payments of £9.7m pa in 2025, £10.6m pa in 2026 and
2027 and £11.4m in 2028.
The funding valuation of the EN88 Scheme at 31 December 2022 was agreed on 27
March 2024. This showed a surplus of £2.0m. Deficit contributions payable to
the Scheme were instead paid into a separate bank account held by the Group
for the period from September 2023 to March 2024. The 2022 valuation does not
provide for any deficit recovery contributions but instead payments are made
to the separate bank account of £1.0m pa until 31 December 2027 or if earlier
when the Scheme has attained full funding on a long term basis. In certain
events the EN88 Scheme Trustee has the right to have the bank account balance
released to it; its purpose is to avoid future trapped surplus in the EN88
Scheme. During the first half of 2025, £0.5m of payments were made into the
bank account.
During 2022, the Trustees of the ENSM Scheme purchased a bulk annuity at no
cost to the Group. The Trustee of the ENSM Scheme subsequently converted this
to a buy-out policy on 28 February 2024, converting all pension liabilities
previously covered by the buy-in into individual annuity policies between the
insurer and former scheme members, with the value of the insured liability and
assets removed from the balance sheet. The residual cash held by the ENSM
Scheme is currently held as a surplus until all the costs of the transaction
are known or the Scheme is wound up. No further funding is expected.
The funding valuation of the WF Scheme at 31 December 2022 was agreed on 27
March 2024. This showed neither surplus nor deficit. The company ceased
deficit funding payments to the WF Scheme in 2021 which together with a one
off payment enabled the Trustees to purchase a bulk annuity for all known
pension liabilities. During 2024, as part of the due diligence to prepare the
WF Scheme for buy-out, the Trustee identified a required Barber Window
equalisation adjustment dating back to 1990. The impact of the required
adjustment was recognised in the consolidated income statement as a past
service cost in 2024. The additional anticipated £5.0m of funding will be
paid during 2025, with £2.2m paid during the period. Following this no
further funding is expected.
Group contributions paid in respect of the defined benefit pension schemes in
the period (excluding the WF Scheme) were £27.9m (2024 H1: £31.0m). £27.9m
of Group contributions relating to these schemes are due to be paid in the
second half of the year.
At the reporting date, the funding deficit in the schemes is expected to be
removed by 2028 through a combination of the contributions and asset returns.
Contributions (which include funding for pension administrative expenses) are
payable monthly. Contributions per the current schedule of contributions are
£61.3m (including £1.0m for the EN88 scheme to a separate bank account and
£4.5m for the Trinity Scheme to the Escrow account) in 2025, £62.1m pa in
2026 and 2027, and £15.3m in 2028.
The future deficit funding commitments are linked to the three-yearly
actuarial valuations. Although the funding commitments do not generally impact
the IAS 19 position, IFRIC 14 guides companies to consider for IAS 19
disclosures whether any surplus can be recognised as a balance sheet asset and
whether any future funding commitments in excess of the IAS 19 liability
should be provisioned for. Based on its interpretation of the rules for each
of the defined benefit pension schemes, the Group considers that it has an
unconditional right to any potential surplus on the ultimate wind-up after all
benefits to members have been paid in respect of all of the schemes except the
WF Scheme. Under IFRIC 14 it is therefore appropriate to recognise any IAS 19
surpluses which may emerge in future and not to recognise any potential
additional liabilities in respect of future funding commitments of all of the
schemes except for the WF Scheme.
The calculation of Guaranteed Minimum Pension ('GMP') is set out in
legislation and members of pension schemes that were contracted out of the
State Earnings-Related Pension Scheme ('SERPS') between 6 April 1978 and 5
April 1997 will have built up an entitlement to a GMP. GMPs were intended to
broadly replicate the SERPS pension benefits but due to their design they give
rise to inequalities between men and women, in particular, the GMP for a male
comes into payment at age 65 whereas for a female it comes into payment at the
age of 60 and GMPs typically receive different levels of increase to non-GMP
benefits. On 26 October 2018, the High Court handed down its judgment in the
Lloyds Trustees vs Lloyds Bank plc and Others case relating to the
equalisation of member benefits for the gender effects of GMP equalisation.
This judgment creates a precedent for other UK defined benefit schemes with
GMPs. The judgment confirmed that GMP equalisation was required for the period
17 May 1990 to 5 April 1997 and provided some clarification on legally
acceptable methods for achieving equalisation. An allowance for GMP
equalisation was first included within liabilities at 30 December 2018 and was
recognised as a charge for past service costs in the income statement. In 2020
further clarification was issued relating to GMP equalisation in respect of
transfers out of schemes and a further allowance for GMP equalisation was
included within liabilities at 27 December 2020 and was recognised as a charge
for past service costs in the income statement. The estimate is subject to
change as more detailed member calculations are undertaken, as guidance is
issued and/or as a result of future legal judgments.
Risks
Valuations for funding and accounting purposes are based on assumptions about
future economic and demographic variables. This results in the risk of a
volatile valuation deficit and the risk that the ultimate cost of paying
benefits is higher than the current assessed liability value.
The main sources of risk are:
• investment risk: a reduction in asset returns (or assumed future asset
returns);
• inflation risk: an increase in benefit increases (or assumed future
increases); and
• longevity risk: an increase in average life spans (or assumed life
expectancy).
These risks are managed by:
• investing in insured annuity policies: the income from these policies exactly
matches the benefit payments for the members covered, removing all of the
above risks. At the reporting date the insured annuity policies covered 23% of
total liabilities;
• investing a proportion of assets in other classes such as government and
corporate bonds and in liability driven investments: changes in the values of
the assets aim to broadly match changes in the values of the uninsured
liabilities, reducing the investment risk, however some risk remains as the
durations of the bonds are typically shorter than those of the liabilities and
so the values may still move differently. At the reporting date non-equity
assets amounted to 97% of assets excluding the insured annuity policies;
• investing a proportion of assets in equities: with the aim of achieving
outperformance and so reducing the deficits over the long term. At the
reporting date this amounted to 3% of assets excluding the insured annuity
policies; and
• the gradual sale of equities over time to purchase additional annuity policies
or liability matching investments: to further reduce risk as the schemes,
which are closed to future accrual, mature.
Pension scheme accounting deficits are snapshots at moments in time and are
not used by either the Group or Trustees to frame funding policy. The Group
and Trustees seek to be aligned in focusing on the long-term sustainability of
the funding policy which aims to balance the interests of the Group's
shareholders and members of the schemes. The Group and Trustees also seek to
be aligned in reducing pensions risk over the long term and at a pace which is
affordable to the Group.
The EN88 Scheme, the ENSM Scheme and the Trinity Scheme have an accounting
surplus at the reporting date, before allowing for the IFRIC 14 asset ceiling.
The WF Scheme was in deficit on the accounting basis at the reporting date due
to the Barber Window equalisation adjustment identified in 2024. Across the
MGN Scheme and the MIN Scheme, the invested assets are expected to be
sufficient for the schemes to pay the uninsured benefits due up to 2044, based
on the prior reporting date assumptions. The remaining uninsured benefit
payments, payable from 2045, are due to be funded by a combination of asset
outperformance and the deficit contributions currently scheduled to be paid up
to 31 January 2028 for the MGN Scheme and 31 December 2028 for the MIN Scheme.
For the MGN Scheme and MIN Scheme, actuarial projections at the prior
reporting date show removal of the accounting deficit by the end of 2026 for
MGN and 2027 for MIN due to scheduled contributions and asset returns at the
target rate assumed at the last reporting date. From this point, the assets
are projected to be sufficient to fully fund the liabilities on the accounting
basis. The Group is not exposed to any unusual, entity specific or scheme
specific risks. Other than the current period impact of the Barber Window
adjustment relating to the Trinity scheme, and the impact of the Barber Window
adjustment relating to the WF scheme together with the MGN Scheme purchase of
a bulk annuity, both in 2024, there were no plan amendments, settlements or
curtailments in the current and prior period which resulted in a pension cost.
In June 2023, the UK High Court (Virgin Media v NTL Pension Trustees II
Limited) ruled that certain historical amendments for contracted-out defined
benefit schemes were invalid if they were not accompanied by the correct
actuarial confirmation. In July 2024 the Court of Appeal upheld the High
Court's judgment.
Following the appeal, industry groups have been calling on the Government to
draft regulation given the potential challenges faced from this ruling. On 5
June 2025 the Department of Work and Pensions issued a statement recognising
that schemes and sponsoring employers need greater clarity around scheme
liabilities and member benefit levels in order to plan for the future. The
Government will therefore be introducing legislation to give affected pension
schemes the ability to retrospectively obtain written actuarial confirmation
that historic benefit changes met the necessary standards. The Group has taken
legal advice and conducted investigations into the changes made to the Schemes
across this period. We have not identified any issues and at this time do not
consider there to be a financial impact from this ruling. The Group will await
sight of the new legislation and continue to monitor the impact of future
developments.
Results
For the purposes of the Group's consolidated financial statements, valuations
have been performed in accordance with the requirements of IAS 19 with scheme
liabilities calculated using a consistent projected unit valuation method and
compared to the estimated value of the scheme assets at 30 June 2025.
Based on actuarial advice, the assumptions used in calculating the scheme
liabilities are:
30 June 30 June 31 December 2024
2025 2024 £m
£m £m
Financial assumptions (nominal % pa)
Discount rate 5.48 5.20 5.49
Retail price inflation rate 2.94 3.22 3.20
Consumer price inflation rate 1.0% pa lower than RPI to 2030 and equal to RPI thereafter 1.0% pa lower than RPI to 2030 and equal to RPI thereafter 1.0% pa lower than RPI to 2030 and equal to RPI thereafter
Rate of pension increases in deferment 2.50 2.89 2.88
Rate of pension increases in payment 3.34 3.38 3.40
Mortality assumptions - future life expectancies from age 65 (years)
Male currently aged 65 21.2 21.3 21.2
Female currently aged 65 23.3 23.3 23.3
Male currently aged 55 21.0 21.0 21.0
Female currently aged 55 24.2 24.1 24.2
The defined benefit pension liabilities are valued using actuarial assumptions
about future benefit increases and scheme member demographics, and the
resulting projected benefits are discounted to the reporting date at
appropriate corporate bond yields. For the 2024 year-end and 2025 half year,
the financial assumptions have been derived as a yield curve with different
rates per year, with the figures in the tables above representing a weighted
average of these rates across all of the schemes. This is considered to be a
more robust and accurate approach to setting assumptions as it allows for each
scheme's individual circumstances, rather than considering the schemes in
aggregate as has been done in the past.
The discount rate should be chosen to be equal to the yield available on 'high
quality' corporate bonds of appropriate term and currency. For the 2024
year-end and 2025 half year, the discount rate has been set to reflect the
full corporate bond yield curve.
The inflation assumptions are based on market expectations over the period of
the liabilities. For the 2024 year-end and 2025 half year, the inflation
assumptions have been set using the full inflation curve. The RPI assumption
is set based on the break-even RPI inflation curve with a margin deducted.
This margin, called an inflation risk premium, reflects the fact that the RPI
market implied inflation curve can be affected by market distortions and as a
result it is thought to overstate the underlying market expectations for
future RPI inflation. Allowing for the extent of RPI linkage on the schemes'
benefits pre and post 2030, the average inflation risk premium has been set at
0.2% per annum to 2030 and 0.4% per annum thereafter. The CPI assumption is
set based on a margin deducted from the RPI assumption, due to lack of market
data on CPI expectations. Following the UK Statistics Authority's announcement
of the intention to align RPI with CPIH from 2030 the assumed gap between RPI
and CPI inflation is 1.0% per annum up to 2030 and 0.0% per annum beyond 2030.
The estimated impacts on the IAS 19 liabilities and on the IAS 19 deficit at
the reporting date, due to a reasonably possible change in key assumptions
over the next year, are set out in the table below:
Effect on Effect on
liabilities deficit
£m
£m
Discount rate +/- 1.0% pa -145/+170 -115/+140
Retail price inflation rate +/- 0.5% pa +19/-18 +12/-12
Consumer price inflation rate +/- 0.5% pa +18/-16 +16/-15
Life expectancy at age 65 +/- 1 year +70/-70 +50/-50
The RPI sensitivity impacts the rate of increases in deferment for some of the
pensions in the EN88 Scheme and some of the pensions in payment for all
schemes except the MGN Scheme. The CPI sensitivity impacts the rate of
increases in deferment for some of the pensions in most schemes and the rate
of increases in payment for some of the pensions in payment for all schemes.
The effect on the deficit is usually lower than the effect on the liabilities
due to the matching impact on the value of the insurance contracts held in
respect of some of the liabilities. Each assumption variation represents a
reasonably possible change in the assumption over the next year but might not
represent the actual effect because assumption changes are unlikely to happen
in isolation. The estimated impact of the assumption variations makes no
allowance for changes in the values of invested assets that would arise if
market conditions were to change in order to give rise to the assumption
variation. If allowance were made, the estimated impact would likely be lower
as the values of invested assets would normally change in the same directions
as the liability values.
The amounts included in the consolidated income statement, consolidated
statement of comprehensive income and consolidated balance sheet arising from
the Group's obligations in respect of its defined benefit pension schemes are
as follows:
Consolidated income statement 6 months ended 6 months ended Year
30 June 30 June ended
2025 (unaudited) 2024 (unaudited) 31 December 2024
£m £m (audited)
£m
Pension administrative expenses (2.7) (2.4) (4.7)
Past service costs (2.2) - (5.0)
Pension finance charge (0.3) (1.7) (3.4)
Defined benefit cost recognised in income statement (5.2) (4.1) (13.1)
Consolidated statement of comprehensive income 6 months ended 6 months ended Year
30 June 30 June ended
2025 (unaudited) 2024 (unaudited) 31 December 2024
£m £m (audited)
£m
Actuarial (loss)/gain due to liability experience (8.7) 6.6 6.5
Actuarial gain due to liability assumption changes 15.3 116.9 173.3
Total liability actuarial gain 6.6 123.5 179.8
Returns on scheme assets less than discount rate (13.3) (93.7) (168.6)
Impact of IFRIC 14 - - 0.2
Total (loss)/gain recognised in statement of comprehensive income (6.7) 29.8 11.4
Consolidated balance sheet 30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Present value of uninsured scheme liabilities (1,228.9) (1,439.9) (1,240.5)
Present value of insured scheme liabilities (370.8) (242.8) (375.8)
Total present value of scheme liabilities (1,599.7) (1,682.7) (1,616.3)
Invested and cash assets at fair value 1,201.8 1,394.0 1,195.2
Value of liability matching insurance contracts 370.8 242.8 375.8
Total fair value of scheme assets 1,572.6 1,636.8 1,571.0
Funded deficit (27.1) (45.9) (45.3)
Impact of IFRIC 14 - (0.2) -
Net scheme deficit (27.1) (46.1) (45.3)
Non-current assets - retirement benefit assets 65.1 73.8 72.4
Non-current liabilities - retirement benefit obligations (92.2) (119.9) (117.7)
Net scheme deficit (27.1) (46.1) (45.3)
Net scheme deficit included in consolidated balance sheet (27.1) (46.1) (45.3)
Deferred tax included in consolidated balance sheet 6.8 11.6 11.3
Net scheme deficit after deferred tax (20.3) (34.5) (34.0)
Movement in net scheme deficit 6 months 6 months Year
ended ended ended
30 June 30 June 31 December 2024
2025 2024 (audited)
(unaudited) (unaudited) £m
£m £m
Opening net scheme deficit (45.3) (102.8) (102.8)
Contributions 30.1 31.0 59.2
Consolidated income statement (5.2) (4.1) (13.1)
Consolidated statement of comprehensive income (6.7) 29.8 11.4
Closing net scheme deficit (27.1) (46.1) (45.3)
Changes in the present value of scheme liabilities 6 months 6 months Year
ended ended ended
30 June 30 June 31 December 2024
2025 2024 (audited)
(unaudited) (unaudited) £m
£m £m
Opening present value of scheme liabilities (1,616.3) (1,835.6) (1,835.6)
Past service costs (2.2) - (5.0)
Interest cost (42.8) (41.0) (81.6)
Actuarial (loss)/gain - experience (8.7) 6.6 6.5
Actuarial gain - change to demographic assumptions - 17.8 23.9
Actuarial gain - change to financial assumptions 15.3 99.1 149.4
Benefits paid 55.0 53.7 109.4
Bulk transfer due to buy out - 16.7 16.7
Closing present value of scheme liabilities (1,599.7) (1,682.7) (1,616.3)
Changes in impact of IFRIC 14 6 months 6 months Year
ended ended ended
30 June 30 June 31 December 2024
2025 2024 (audited)
(unaudited) (unaudited) £m
£m £m
Opening impact of IFRIC 14 - (0.2) (0.2)
Decrease in impact of IFRIC 14 - - 0.2
Closing impact of IFRIC 14 - (0.2) -
Changes in the fair value of scheme assets 6 months 6 months Year
ended ended ended
30 June 30 June 31 December 2024
2025 2024 (audited)
(unaudited) (unaudited) £m
£m £m
Opening fair value of scheme assets 1,571.0 1,733.0 1,733.0
Interest income at discount rate 42.5 39.3 78.2
Actual return on assets less than discount rate (13.3) (93.7) (168.6)
Contributions by employer 30.1 31.0 59.2
Benefits paid (55.0) (53.7) (109.4)
Administrative expenses (2.7) (2.4) (4.7)
Bulk transfer due to buy out - (16.7) (16.7)
Closing fair value of scheme assets 1,572.6 1,636.8 1,571.0
Fair value of scheme assets 30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
UK equities 3.8 3.1 3.3
Other overseas equities 36.3 32.8 34.0
Property 26.2 27.9 27.2
Corporate bonds 247.7 267.5 250.0
Fixed interest gilts 8.3 4.0 1.5
Index linked gilts 0.8 - -
Liability driven investment 797.8 968.6 779.9
Cash and other 80.9 90.1 99.3
Invested and cash assets at fair value 1,201.8 1,394.0 1,195.2
Value of insurance contracts 370.8 242.8 375.8
Fair value of scheme assets 1,572.6 1,636.8 1,571.0
The assets of the schemes are primarily held in pooled investment vehicles
which are unquoted. The pooled investment vehicles hold both quoted and
unquoted investments. Scheme assets include neither direct investments in the
Company's ordinary shares nor any property assets occupied nor other assets
used by the Group.
When setting the investment strategy, the Trustees of the defined benefit
pension schemes consider a wide range of asset classes for investment, taking
account the expected returns and key individual risks associated with those
asset classes as well as how these risks can be mitigated where appropriate.
The assets of the individual schemes are held across matching and growth
portfolios. Details regarding each scheme's approach to the allocation of the
assets between these portfolios can be found on our website under pension
scheme disclosure notices, www.reachplc.com/pension-scheme-disclosure-notices,
included in the Statement of Investment Principles (SIP).
The purpose of the assets in the matching portfolios is to generate cash flows
to match the expected cash outflows arising from the pension obligations. The
asset classes in the matching portfolios include, but are not limited to,
asset-backed securities, short-duration buy and maintain credit, synthetic
credit, bonds, gilts, swaps, liability-driven investment (LDI) and cash funds.
The purpose of the assets in the growth portfolios is to generate consistent,
absolute returns while managing downside risks and reducing the chance of
large losses in stress situations. The asset classes in the growth portfolios
include, but are not limited to, equities, bonds, diversified growth,
multi-asset credit, emerging markets, inflation swaps, property,
infrastructure and private credit funds.
The MGN Scheme, the Trinity Scheme, the MIN Scheme and the WF Scheme also hold
bulk annuity contracts to match the benefits payable to a portion of the
scheme's pensioners.
14. Net debt
The net debt for the Group is as follows:
Loan drawdown
1 January 2025 Cash £m IFRS 16 lease liabilities movement
£m flow
£m
30 June 2025
Interest New Leases Other movements £m
£m £m £m
Liabilities from financing activities
Borrowings (35.0) - (3.0) - - - (38.0)
Lease liabilities (27.3) 3.1 - (0.6) - - (24.8)
(62.3) 3.1 (3.0) (0.6) - - (62.8)
Current assets
Cash and cash equivalents 20.8 (11.8) 3.0 - - - 12.0
Net debt less lease liabilities (41.5) (50.8)
Net debt (14.2) (11.8) - - - - (26.0)
The cash and cash equivalents disclosed above and in the statement of cash
flows include £2.9m (30 June 2024: £1.9m and 31 December 2024: £2.4m) of
restricted cash relating to potential pension contributions to the EN88 Scheme
if the funding is deemed required (note 13). This is not available for general
use within the Group.
The Group has a revolving credit facility of £145.0m which expires on 12
December 2028 (including an option to extend by up to one year). The Group had
drawings of £38.0m at the reporting date. The facility is subject to two
covenants: Interest Cover and Net Debt to EBITDA, both of which were met at
the reporting date.
15. Assets classified as held for sale
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Opening balance 2.6 11.0 11.0
Classified as held for sale in the year - 0.3 0.7
Disposals (2.2) (8.8) (9.1)
Closing balance 0.4 2.5 2.6
At 30 June 2025, one property was recognised as assets classified as held for
sale with a total carrying value of £0.4m. The properties are measured at the
lower of their carrying amount and fair value less costs to sell. The fair
value was determined by the sale price or the value of offers received on the
property.
Of the two properties classified as held for sale at 31 December 2024, one of
these properties have been sold in the first half of 2025. The other is
expected to complete within the second half of 2025.
16. Provisions
Share-based payments Historical legal issues
£m
Property Restructuring £m Other Total
£m £m £m £m
At 1 January 2025 (audited) (0.7) (18.4) (4.2) (9.1) (2.9) (35.3)
Charged to income statement (0.2) - (4.2) - (0.3) (4.7)
Released to income statement - - - - 0.3 0.3
Utilisation of provision - 0.9 5.9 1.1 0.2 8.1
At 30 June 2025 (unaudited) (0.9) (17.5) (2.5) (8.0) (2.7) (31.6)
The provisions have been analysed between current and non-current as follows:
30 June 30 June 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Current (11.6) (16.0) (13.8)
Non-current (20.0) (20.2) (21.5)
(31.6) (36.2) (35.3)
The share-based payments provision relates to National Insurance obligations
attached to the future crystallisation of awards. This provision will be
utilised over the next three years.
The property provision relates to property related onerous contracts and
onerous committed costs related to vacant properties. The provision will be
utilised over the remaining term of the leases or expected period of vacancy.
The restructuring provision relates to restructuring charges incurred in the
delivery of cost reduction measures. The net charge of £4.2m principally
relates to in-year cost management actions taken in the period (note 5). The
restructuring provision is expected to be utilised within the next year.
The historical legal issues provision relates to the cost associated with
resolving civil claims in relation to historical phone hacking and unlawful
information gathering. The provision consists of known claims and costs. The
key uncertainties in relation to this matter relate to how each claim
progresses, the amount of any settlement and the associated legal costs. The
known and common costs provision is calculated using the most likely outcome
method.
At the period end, a provision of £8.0m remains outstanding and this
represents the current best estimate of the amount required to resolve this
historical matter. The majority of the provision is expected to be utilised
within the next two years.
Our view on the range of outcomes at the reporting date for the provision,
applying more and less favourable outcomes to all aspects of the provision is
£3m to £15m (30 June 2024: £7m to £16m and 31 December 2024: £4m to
£16m). Despite making a best estimate, the timing of utilisation and ongoing
legal matters related to provided for claims could mean that the final outcome
is outside of the range of outcomes.
The other provision balance of £2.7m at the period end relates to libel and
other matters, the majority of which is expected to be utilised over the next
year.
17. Share capital and reserves
The share capital comprises 322,085,269 allotted, called-up and fully paid
ordinary shares of 10p each.
The merger reserve comprises the premium on the shares allotted in relation to
the acquisition of Express & Star. The capital redemption reserve
represents the nominal value of the shares purchased and subsequently
cancelled under share buy-back programmes.
The Company holds 3,748,968 shares (30 June 2024: 4,043,503 shares and 31
December 2024: 3,927,313 shares) as Treasury shares. During the first half of
the year, 178,345 shares were withdrawn from Treasury to satisfy the vesting
of buy-out awards granted in 2023.
Cumulative goodwill written off to retained earnings/(accumulated loss) and
other reserves in respect of continuing businesses acquired prior to 1998 is
£25.9m (30 June 2024: £25.9m and 31 December 2024: £25.9m). On transition
to IFRS, the revalued amounts of freehold properties were deemed to be the
cost of the asset and the revaluation reserve has been transferred to retained
earnings and other reserves.
Shares purchased by the Reach Employee Benefit Trust are included in retained
earnings and other reserves at £2.5m (30 June 2024: £2.7m and 31 December
2024: £2.6m). During the period, the Trust purchased 414,174 shares (6 months
ended 30 June 2024: no shares and year ended 31 December 2024: 590,205 shares)
for a cash consideration of £0.3m (6 months ended 30 June 2024: nil and year
ended 31 December 2024: £0.6m). The Trust received a payment of £0.3m from
the Company to purchase these shares (6 months ended 30 June 2024: nil and
year ended 31 December 2024: £0.6m). During the period, 560,061 were released
relating to grants made in prior years (30 June 2024: 1,063,487 and 31
December 2024: 1,716,112).
During the period, awards relating to 1,452,408 shares were granted to
executive directors on a discretionary basis under the Long Term Incentive
Plan (30 June 2024: 2,112,984 and 31 December 2024: 2,112,984). The exercise
price of each award is £1 for each block of awards granted. The awards vest
after three years, subject to the continued employment of the participant and
satisfaction of certain performance conditions, and are required to be held
for a further two years.
During the period, awards relating to 3,087,911 shares were granted to senior
managers on a discretionary basis under the Long Term Incentive Plan under the
Senior Management Incentive Plan (30 June 2024: 3,919,926 and 31 December
2024: 3,948,180). The exercise price of each award is £1 for each block of
awards granted. The awards vest after three years, subject to the continued
employment of the participant and satisfaction of certain performance
conditions.
During the period, 728,512 awards relating to shares were granted to executive
directors under the Restricted Share Plan (30 June 2024 and 31 December 2024:
nil shares). The awards vest after three years.
18. Reconciliation of statutory to adjusted results
6 months ended 30 June 2025 (unaudited)
Operating Pension
adjusted finance
Statutory items charge Adjusted
results (a) (b) results
£m £m £m £m
Revenue 256.0 - - 256.0
Operating profit 29.7 15.1 - 44.8
Profit before tax 27.0 15.1 0.3 42.4
Profit after tax 20.9 12.7 0.3 33.9
Basic earnings per share (p) 6.6 4.0 0.1 10.7
6 months ended 30 June 2024 (unaudited)
Operating Pension
adjusted finance
Statutory items charge Adjusted
results (a) (b) results
£m £m £m £m
Revenue 265.0 - - 265.0
Operating profit 36.8 7.7 - 44.5
Profit before tax 32.9 7.7 1.7 42.3
Profit after tax 24.6 5.9 1.3 31.8
Basic earnings per share (p) 7.8 1.9 0.4 10.1
Year ended 31 December 2024 (audited)
Operating Pension
adjusted finance Adjusted interest
Statutory items charge (c) Adjusted
results (a) (b) £m results
£m £m £m £m
Revenue 538.6 - - - 538.6
Operating profit 74.2 28.1 - - 102.3
Profit before tax 62.8 28.1 3.4 2.9 97.2
Profit after tax 53.6 21.4 2.5 2.2 79.7
Basic earnings per share (p) 17.0 6.8 0.8 0.7 25.3
(a) Operating adjusted items relate to the items charged or credited to
operating profit as set out in note 5.
(b) Pension finance charge relating to the defined benefit pension schemes
as set out in note 13.
(c) Adjusted interest relates to other interest costs as set out in note
8.
Set out in note 2 is the rationale for the alternative performance measures
adopted by the Group. The reconciliations in this note highlight the impact on
the respective components of the income statement. Items are adjusted on the
basis that they distort the underlying performance of the business where they
relate to material items that can recur (including impairment, restructuring,
tax rate changes and profit or loss on the sale of freehold buildings) or
relate to historical liabilities (including historical legal and contractual
issues, defined benefit pension schemes which are all closed to future
accrual). Other items may be included in adjusted items if they are not
expected to recur in future years, such as property rationalisation and items
such as transaction and restructuring costs incurred on acquisitions or the
profit or loss on the sale of subsidiaries or associates.
Provision for historical legal issues relates to the cost associated with
dealing with and resolving civil claims for historical phone hacking and
unlawful information gathering. This is included in adjusted items as the
amounts are material, it relates to historical matters and movements in the
provision can vary year to year.
Impairments to non-current assets arise following impairment reviews or where
a decision is made to close or retire printing assets. These non-cash items
are included in adjusted items on the basis that they are material and vary
considerably each year, distorting the underlying performance of the business.
The Group's defined benefit pension schemes are all closed to new members and
to future accrual and are therefore not related to the current business. The
pension administration expenses, the past service costs and the pension
finance charge are included in adjusted items as the amounts are significant
and they relate to the historical pension commitment.
The opening deferred tax position is recalculated in the period in which a
change in the standard rate of corporation tax has been enacted or
substantively enacted by parliament or when a decision is reversed. The impact
of the change in rates are included in adjusted items, on the basis that when
they occur they are material, distorting the underlying performance of the
business.
Also included in adjusted items in the six months ended 30 June 2025 are
vacant freehold property-related costs (£0.2m), onerous lease and related
costs (£0.1m), the loss on sale of assets (£0.1m), the Group's net legal
fees in respect of historical legal issues (£0.1m), adviser costs in relation
to the defined benefit pension schemes (£3.0m), internal pension
administration expenses (£0.2m), corporate simplification costs (£0.3m), and
other restructuring-related project costs (£1.3m). These are included in
adjusted items as they relate to historical liabilities or are one-off items
not expected to recur.
Also included in adjusted items in the six months ended 30 June 2024 are
vacant freehold property-related costs (£1.1m), onerous lease and related
costs (£1.0m), the Group's legal fees in respect of historical legal issues
(£0.3m), adviser costs in relation to the triennial funding valuations
(£1.7m), internal pension administration expenses (£0.2m), corporate
simplification costs (£0.3m), and other restructuring-related project costs
(£1.4m) less the profit on sale of assets (£4.1m). These were included in
adjusted items as they relate to historical liabilities or are one-off items
not expected to recur.
Also included in adjusted items in the year ended 31 December 2024 are vacant
freehold property-related costs (£1.5m), onerous lease and related costs
(£2.8m), impairment of vacant freehold property (£0.1m), the Group's legal
fees in respect of historical legal issues (£1.0m), adviser costs in relation
to the defined benefit pension schemes (£6.1m), internal pension
administrative expenses (£0.5m), corporate simplification costs (£0.5m), and
other restructuring-related project costs (£2.1m) less the profit on sale of
assets (£5.5m). These were included in adjusted items as they relate to
historical liabilities or are one-off items not expected to recur.
19. Adjusted cash flow
6 months ended 30 June 6 months ended 30 June Year ended 31 December 2024
2025 (unaudited) 2024 (unaudited) (audited)
£m £m £m
Adjusted operating profit 44.8 44.5 102.3
Depreciation and amortisation 9.7 9.7 19.6
Adjusted EBITDA 54.5 54.2 121.9
Working Capital Movements 1.5 14.1 4.4
Net capital expenditure (6.9) (5.6) (11.8)
Net interest paid on leases (0.6) (0.6) (1.3)
Repayment of obligation under leases (2.5) (3.8) (6.0)
Other 1.0 0.7 2.9
Associates (1.2) (1.3) (2.8)
Adjusted operating cash flow 45.8 57.7 107.3
Net interest and charges paid on borrowings (2.0) (1.5) (3.7)
Income tax paid (1.9) (1.8) (2.4)
Restructuring payments (5.9) (12.9) (16.5)
Historical legal issues payments (1.1) (5.2) (9.1)
Proceeds from disposal of property 2.1 13.1 14.6
Dividends payments (14.1) (14.1) (23.2)
Purchase of own shares (0.3) - (0.6)
Pension funding payments (30.1) (31.0) (59.2)
Pension payments into escrow (2.3) - (1.9)
Dividends received from associated undertakings - - 1.9
Net legal fee payments in respect of historical legal issues (0.1) (0.5) (0.8)
Adviser cost payments in relation to defined benefit schemes (4.0) (1.7) (3.4)
Tax receipts of residual overpayments previously held with HMRC 4.8 - -
Other adjusted items payments (2.7) (4.3) (7.1)
Net cash flow (11.8) (2.2) (4.1)
Bank facility drawdown/(repayment) 3.0 (5.0) 5.0
Net (decrease)/increase in cash and cash equivalents (8.8) (7.2) 0.9
20. Reconciliation of statutory to adjusted cash flow
6 months ended 30 June 2025 Statutory (a) (b) Adjusted
2025 £m £m 2025
£m £m
Cash flows from operating activities
Cash generated from operations 42.0 (10.0) 13.8 45.8 Adjusted operating cash flow
Pension deficit funding payments (30.1) - - (30.1) Pension funding payments
Pension payments into escrow (2.3) - - (2.3) Pension payments into escrow
- - (5.9) (5.9) Restructuring payments
- - (1.1) (1.1) Historical legal issues payments
- - (0.1) (0.1) Net legal fee payments in respect of historical legal issues
- - (4.0) (4.0) Adviser cost payments in relation to defined benefit schemes
- - 4.8 4.8 Tax receipts of residual overpayments previously held with HMRC
- - (2.7) (2.7) Other adjusted items payments
Income tax received/(paid) 2.9 - (4.8) (1.9) Income tax paid
Net cash inflow from operating activities 12.5
Investing activities
Interest received 0.1 - - 0.1 Net interest and charges paid on bank borrowings
Dividends received from associated undertakings - - - - Dividends received from associated undertakings
Proceeds on disposal of property, plant and equipment 2.1 - - 2.1 Proceeds from disposal of property
Purchases of property, plant and equipment (1.2) 1.2 - - Net capital expenditure
Expenditure on capitalised internally generated development (5.7) 5.7 - - Net capital expenditure
Net cash used in investing activities (4.7)
Financing activities
Interest and charges paid on borrowings (2.1) - - (2.1) Net interest and charges paid on bank borrowings
Dividends paid (14.1) - - (14.1) Dividends paid
Interest paid on leases (0.6) 0.6 - - Net interest paid on leases
Repayment of obligations under leases (2.5) 2.5 - - Repayment of obligation under leases
Purchase of own shares (0.3) - - (0.3)
Drawdown of borrowings 3.0 - - 3.0 Bank facility drawdown/(repayment)
Net cash used in financing activities (16.6)
Net decrease in cash and cash equivalents (8.8) - - (8.8)
(a) Items included in the statutory cash flow on separate lines
which for the adjusted cash flow are included in adjusted operating cash flow.
(b) Payments in respect of adjusted items are shown separately in
the adjusted cash flow.
6 months ended 30 June 2024 Statutory (a) (b) Adjusted
2024 £m £m 2024
£m £m
Cash flows from operating activities
Cash generated from operations 43.1 (10.0) 24.6 57.7 Adjusted operating cash flow
Pension deficit funding payments (31.0) - - (31.0) Pension funding payments
- - (12.9) (12.9) Restructuring payments
- - (5.2) (5.2) Historical legal issues payments
- - (0.5) (0.5) Net legal fee payments in respect of historical legal issues
- - (1.7) (1.7) Adviser cost payments in relation to defined benefit schemes
- - (4.3) (4.3) Other adjusted items payments
Income tax paid (1.8) - - (1.8) Income tax paid
Net cash inflow from operating activities 10.3
Investing activities
Interest received 0.1 - - 0.1 Net interest and charges paid on bank borrowings
Dividends received from associated undertakings - - - - Dividends received from associated undertakings
Proceeds on disposal of property, plant and equipment 13.1 - - 13.1 Proceeds from disposal of property
Purchases of property, plant and equipment (0.4) 0.4 - - Net capital expenditure
Expenditure on capitalised internally generated development (5.2) 5.2 - - Net capital expenditure
Deferred consideration payment - - - - Acquisition-related cash flow
Net cash generated from investing activities 7.6
Financing activities
Interest and charges paid on borrowings (1.6) - - (1.6) Net interest and charges paid on bank borrowings
Dividends paid (14.1) - - (14.1) Dividends paid
Interest paid on leases (0.6) 0.6 - - Net interest paid on leases
Repayment of obligations under leases (3.8) 3.8 - - Repayment of obligation under leases
Repayment of borrowings (5.0) - - (5.0) Bank facility drawdown/(repayment)
Net cash used in financing activities (25.1)
Net decrease in cash and cash equivalents (7.2) - - (7.2)
(a) Items included in the statutory cash flow on separate lines which for
the adjusted cash flow are included in adjusted operating cash flow.
(b) Payments in respect of adjusted items are shown separately in the
adjusted cash flow.
Year ended 31 December 2024 Statutory (a) (b) Adjusted
2024 £m £m 2024
£m £m
Cash flows from operating activities
Cash generated from operations 89.5 (19.1) 36.9 107.3 Adjusted operating cash flow
Pension deficit funding payments (59.2) - - (59.2) Pension funding payments
Pension payments into escrow (1.9) - - (1.9) Pension payments into escrow
- - (16.5) (16.5) Restructuring payments
- - (9.1) (9.1) Historical legal issues payments
- - (0.8) (0.8) Legal fee payments in respect of historical legal issues
- - (3.4) (3.4) Adviser cost payments in relation to defined benefit pension schemes
- - (7.1) (7.1) Other adjusted items payments
Income tax paid (2.4) - - (2.4) Income tax paid
Net cash inflow from operating activities 26.0
Investing activities
Interest received 0.2 - - 0.2 Net interest and charges paid on bank borrowings
Dividends received from associated undertakings 1.9 - - 1.9 Dividends received from associated undertakings
Proceeds on disposal of property, plant and equipment 14.6 - - 14.6 Proceeds from disposal of property
Purchases of property, plant and equipment (1.3) 1.3 - - Net capital expenditure
Expenditure on capitalised internally generated development (10.5) 10.5 - - Net capital expenditure
Net cash generated from investing activities 4.9
Financing activities
Interest and charges paid on borrowings (3.9) - - (3.9) Net interest and charges paid on bank borrowings
Dividends paid (23.2) - - (23.2) Dividends paid
Interest paid on leases (1.3) 1.3 - - Net interest paid on leases
Repayment of obligations under leases (6.0) 6.0 - - Repayment of obligation under leases
Purchase of own shares (0.6) - - (0.6)
Drawdown of borrowings 5.0 - - 5.0 Bank facility drawdown/(repayment)
Net cash used in financing activities (30.0)
Net increase in cash and cash equivalents 0.9 - - 0.9
(a) Items included in the statutory cash flow on separate lines which for
the adjusted cash flow are included in adjusted operating cash flow.
(b) Payments in respect of adjusted items are shown separately in the
adjusted cash flow.
Independent review report to Reach plc
Report on the condensed consolidated interim financial statements
Our conclusion
We have reviewed Reach plc's condensed consolidated interim financial
statements (the "interim financial statements") in the Half Year Results of
Reach plc for the 6 month period ended 30 June 2025 (the "period").
Based on our review, nothing has come to our attention that causes us to
believe that the interim financial statements are not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
The interim financial statements comprise:
● the Consolidated balance sheet as at 30 June 2025;
● the Consolidated income statement and the Consolidated statement of
comprehensive income for the period then ended;
● the Consolidated cash flow statement for the period then ended;
● the Consolidated statement of changes in equity for the period then
ended; and
● the explanatory notes to the interim financial statements.
The interim financial statements included in the Half Year Results of Reach
plc have been prepared in accordance with UK adopted International Accounting
Standard 34, 'Interim Financial Reporting' and the Disclosure Guidance and
Transparency Rules sourcebook of the United Kingdom's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410, 'Review of Interim Financial Information Performed by
the Independent Auditor of the Entity' issued by the Financial Reporting
Council for use in the United Kingdom ("ISRE (UK) 2410"). A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures.
A review is substantially less in scope than an audit conducted in accordance
with International Standards on Auditing (UK) and, consequently, does not
enable us to obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do not express
an audit opinion.
We have read the other information contained in the Half Year Results and
considered whether it contains any apparent misstatements or material
inconsistencies with the information in the interim financial statements.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed. This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410. However, future events
or conditions may cause the group to cease to continue as a going concern.
Responsibilities for the interim financial statements and the review
Our responsibilities and those of the directors
The Half Year Results, including the interim financial statements, is the
responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Half Year Results in accordance with the
Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's
Financial Conduct Authority. In preparing the Half Year Results, including the
interim financial statements, the directors are responsible for assessing the
group's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Our responsibility is to express a conclusion on the interim financial
statements in the Half Year Results based on our review. Our conclusion,
including our Conclusions relating to going concern, is based on procedures
that are less extensive than audit procedures, as described in the Basis for
conclusion paragraph of this report. This report, including the conclusion,
has been prepared for and only for the company for the purpose of complying
with the Disclosure Guidance and Transparency Rules sourcebook of the United
Kingdom's Financial Conduct Authority and for no other purpose. We do not, in
giving this conclusion, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
PricewaterhouseCoopers LLP
Chartered Accountants
London
24 July 2025
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