Shares jump as Record group Reach beats forecast
Reach’s newspaper revenue is more stable
Shares in Daily Record and Daily Express owner Reach rallied almost 5% to trade at 328.25p, hitting the highest level since 2007 after a confident half-year statement.
It said trading is ahead of market expectations with a strong digital performance and recovery in circulation sales.
Adjusted half-year operating profit came in 25.5% higher at £68.9m on a 4% increase in half-year sales to £302.3 million. It has restored its interim dividend with a declared payment of 2.75p pence per share.
Digital revenue leapt 43% to £69m though print still accounts for more than three-quarters (£232m) of the company’s revenues, and declines in both circulation and advertising led to a 5.2% drop in like-for-like sales from physical media in the six months to 27 June.
Having declined by 11.3% in the first quarter of this year, circulation revenue has recovered during Q2, ending the half down just 5.1%.
Britain’s largest commercial publisher said it committed an extra £20m in 2020 and 2021 towards 14 investment projects to boost journalism, data and technology.
Chief executive Jim Mullen said: “Reach is transforming its prospects and with strong momentum in the Customer Value Strategy we now have a clear pathway to sustainable growth.
“As a result, we have been able to increase investment in journalism and the applied data technology that is key to us achieving our ambition of doubling digital growth over the medium term. The business remains strongly cash generative and is committed to delivering growth for the benefit of all stakeholders.”