REG - Reach PLC - Trading Update

ReachAnnouncement

05/05/2022 07:00

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RNS Number : 3738K  Reach PLC  05 May 2022

 

5 May 2022

Reach plc - Trading update for the 4-month period to 24 April 2022

Continued strategic progress and digital revenue growth, despite a more
challenging market

 

Reach plc ('the Group') is issuing a trading update for the 4-month period
from 27 December 2021 to 24 April 2022 ('the period'), ahead of its 2022
Annual General Meeting today.

                                  Period YOY  %
 Digital Revenue                  9.3%
 Print Revenue                    (4.2%)
 -     circulation rev            (5.7%)

 -     advertising rev            (10.1%)

 -     printing & other           21.6%
 Group Revenue                    (0.9%)

 

·    Strategy enabling strong growth of higher yielding PLUS+ products;
enhances quality of digital revenues

·    More challenging market impacts digital growth rate; market yield
reflecting lower advertising demand

·    Print remains resilient with action on cover prices to further
strengthen circulation revenue

·    Mitigating actions in place to help offset the impact of further
newsprint inflation

Continued strategic progress and digital revenue growth

Over the past two months the market has experienced reduced advertiser demand
and lower average yields, with the war in Ukraine significantly reducing the
level of 'brand safe' content for news publishers. While this has led to lower
growth than expected, we are improving the quality of our digital sales, with
strong growth in our higher yielding revenues, such as PLUS+, becoming a
bigger part of the mix. PLUS+ data has also recently been added to the online
marketplaces of three of the largest advertising agencies and we're continuing
to enrich customer profiles and use technology, like our AI contextual tool
Mantis, to encourage more customer time on site.

Investing while addressing the impact of inflation

We're continuing to invest in the Customer Value Strategy, with the reshaping
of our cost base supporting investment in data and technology. However, since
the middle of March, we have seen further inflation in operating costs,
particularly within print, where the impact of newsprint (paper cost)
increases will now exceed our previous expectations. We have taken additional
measures to help offset this including, the acceleration of efficiency plans,
changes within print production and actions around print cover prices.

Outlook

We still anticipate broadly flat group revenue for the year, though with a
higher mix of circulation revenues and lower digital contribution than
previously expected as a result of more challenging trading conditions. The
impact of further recent newsprint inflation is fully reflected in our cost
expectations for the current financial year,  with actions now underway to
help mitigate the impact on operating profit.

Jim Mullen, Reach plc Chief Executive Officer:

"We're developing a more sustainable and profitable long-term future for the
business, with delivery of the strategy progressing well, despite a more
challenging economic backdrop. The effective collection and use of data are
supporting the growth of our higher yielding digital products, which are
becoming an increasing part of our revenue mix. We've taken swift action to
address the impact of inflation on our cost base and the business remains
strongly cash generative, supporting the investment in data and technology
that is key to future growth."

 

 

Enquiries

Reach
 
        communications@reachplc.com

Jim Mullen, Chief Executive
Officer
 

Simon Fuller, Chief Financial Officer

Ciaran O'Brien, Communications Director

Matt Sharff, Investor Relations
Director
      +44 (0)7341 470 722

 

Tulchan
Communications
         reachplc@tulchangroup.com

Giles
Kernick
                                  +44 (0)207
353 4200

 

LEI: 213800GNI5XF3XOATR61

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