Record group Reach ramps up action to combat cost rises
Newspaper group Reach, publisher of the Daily Record and Daily Express, said it is feeling the squeeze of higher costs and has “accelerated” its efficiency plans.
It anticipates broadly flat group revenue for the year, though a higher mix of circulation revenues and lower digital contribution than previously expected as a result of more challenging trading conditions.
In a trading update, the group said: “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
“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.
“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, chief executive, said: “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.”