Legal fees rise
Mirror group adds £7.5m for higher hacking costs
Reaching out: group expects higher claim costs
Newspaper group Reach, formerly Trinity Mirror, has increased the amount of compensation set aside for hacking claims as the cost of the scandal continues to rise.
It said costs associated, predominantly the legal fees of the claimants’ lawyers, are expected to be higher than previously estimated.
“Therefore, we have increased the provision for settling these historical claims by £7.5 million,” it said in a statement this morning.
“Although there remains uncertainty as to how these matters will progress, the board remains confident that the exposures arising from these historical events are manageable and do not undermine the delivery of the Group’s strategy.”
The statement accompanied a trading update for the 26 week period to 1 July in which the board also admitted that newsprint prices were also higher than expected.
“The impact of higher than anticipated newsprint prices in the second half of the year is expected to be offset by the delivery of synergies resulting from the Express & Star acquisition following regulatory clearance on 20 June 2018. The group is awaiting the decision of the regulatory authorities in Ireland.”
The company said group revenue is expected to grow by 11% during the period reflecting the acquisition of the publishing assets of Northern & Shell in the UK (Express & Star) on 28 February. Had Express & Star been owned from the beginning of 2017, Group revenue on a like for like** basis would have been expected to fall by 7% over the period with print declining by 9% and digital growing by 5%.
Group revenue on a like for like** basis over the period excluding Express & Star is expected to fall by 8%. Publishing revenue is expected to fall by 8% with print falling by 10% and digital increasing by 1%. Digital display and transactional revenue is expected to grow by 7% with classified advertising, which is predominantly upsold from print, expected to fall by 19%.
For the period from completion to 1 July 2018, revenue for Express & Star is expected to fall by 3% on a like for like basis with print falling by 5% and digital growing by 25%.
Simon Fox, chief executive, commented: “We have seen some improvement in May and June driven by stronger national print advertising. Following the welcome clearance by the Secretary of State, we will start the process of integrating Express & Star in order to accelerate the benefits that our combined scale will deliver.”