Change of CEO
Fox steps down as chief executive of Record group Reach
Stepping down: Simon Fox (pic: Terry Murden)
Simon Fox will be stepping down as chief executive of Daily Record owner Reach and will be succeeded by former newspaper executive Jim Mullen, most recently chief executive of Ladbroke Coral.
Mr Mullen’s previous roles include director of product management and director of digital strategy at News International, and 11 years in the advertising industry. Mr Fox leaves on 16 August.
The change at the top followed a further fall in revenue, down 6.3% on a like for like basis over the first half following a 7.2% fall in the first half of last year. The company claimed “resilient circulation revenue” helped slow down the decline.
A statutory operating profit of £63.7 million was reported for the half year compared to a statutory operating loss of £107.3 million in the prior half year which was impacted by a non-cash impairment charge. Statutory profit before tax was £58.2 million compared to a statutory loss before tax of £113.5 million in the prior half year.
Group Print revenue declined by 8.2% (compared to 9.1% in the first half of 2018), with the more resilient circulation revenue declining by 3.9% (which now accounts for 61% of Group Print revenue) while the more “structurally challenged” advertising revenue declining by 21.1%. The circulation revenue decline benefited from cover price increases. Group digital revenue on a like for like basis was up by 9.7%, driven by page view growth with revenue growth accelerating from 5.6% in the first quarter to 13.6% in the second quarter.
“As the first half results demonstrate, he leaves Reach in very good health, with a strong balance sheet and real progress in developing the business for the future. We have an excellent successor in Jim and I am pleased to have a seamless transition.”
Mr Fox said: “There is never an ideal time to leave an organisation, but if there were it would be now. The integration of the Express and Star has been successfully completed, digital growth is accelerating and our trading and cash position are strong. I am proud of what has been achieved and will provide Jim with whatever support is required to ensure a smooth handover.”
Mr Mullen said: “I am delighted to be joining Reach at such an exciting time and look forward to building upon its digital transformation”.
The changeover may signify a key stepping stone in Reach’s ambitions to be a consolidator in the media. Having acquired the Daily Express & Star titles it is now turning its attention to The Scotsman and other titles in the former Johnston Press group which collapsed last year.
Financial and Operational Highlights
· Revenue decreased by 0.3% to £352.6 million benefiting from the Express & Star acquisition
· On a like for like basis revenue fell by 6.3%, an improvement on the like for like fall of 7.2% in the first half of 2018, helped by resilient circulation revenue
· Strong performance in Group digital with like for like revenue increasing by 9.7% (13.6% in the second quarter) and average monthly page views in 2019 growing by 16% year on year to 1.2 billion
· Acquisition synergies of £6 million delivered and on target to deliver annualised savings of at least £15 million in 2019 and £22 million in 2020, ahead of £20 million previously signalled
· Structural cost savings achieved of £5 million and on target to deliver £10 million commitment for 2019
· Adjusted operating profit increased by 7.2% to £71.3 million, with adjusted operating margin increasing from 18.8% to 20.2%, driven by optimisation strategy
· Statutory operating profit of £63.7 million reflecting reduced adjusting operating items compared with the first half of 2018
· Accounting pension deficit (IAS 19) fell by £0.4 million to £348.2 million (£284.8 million net of deferred tax)
· Strong cash generated from operations of £70.4 million, up 16.0% year on year, supporting low leverage with net debt falling by £27.9 million to £12.9 million
· Interim dividend of 2.50 pence per share, an increase of 5.5%