Reach plc
Trading update for the 4-month period to 25 April 2021
Strong growth in digital revenues, trading ahead of expectations
6 May 2021
Reach plc ('the Group') is issuing a trading update for the 4-month period from 28 December 2020 to 25 April 2021 ('the period'), ahead of its 2021 Annual General Meeting today.
· Good start to the year with digital and print revenue performing slightly ahead of our expectations
· Continued growth in registrations; now at 6.2m, versus 5.8m reported at the beginning of March
· Customer Value Strategy progressing well with continued increase in loyalty and engagement
· High level of interest from brands in new 'plus' portfolio of products; building strong pipeline for H2
· Transformation programme efficiencies and digital mix support growth in operating margin
Strong acceleration of digital revenue growth and moderation of print decline
During the period, digital revenue grew by 35.0%, with total print revenue down 10.4% and circulation down by 7.9%. Group revenue for the period was down 3.1%.
The year on year movements in digital and print reflect softer comparatives during the latter part of the period as we annualised the first COVID-19 lockdown, which although beneficial for online volumes, was negative for digital yields, print advertising and circulation. On a two-year growth rate basis, digital revenue increased by 41.3%, a broadly stable rate of growth compared to the H2'20 two-year growth of 39.8%. The two-year movement in print revenue was also broadly stable, down 24.3% in the period compared to 23.3% during H2'20.
Continued strategic momentum
The business has made further progress in growing the number of registered customers, which now stands at 6.2m, and remains well on track to reach 10m by the end of 2022. Customer engagement has continued to grow and will be supported by increased strategic investment in data and analytics, including a focus on customer journey mapping to support the objective of growing average revenue per user.
Outlook
The business is performing well with strong progress against all strategic objectives. Although headline revenue growth is currently flattered by a soft prior year comparative, underlying momentum has been encouraging, particularly in digital where good early progress has been made in commercialising our new 'plus' portfolio of products. The business is continuing to benefit from the efficiencies driven by last year's transformation programme, which together with a growing mix of digital revenues, means that operating profit for the year is now expected to be slightly ahead of market expectations1.
Jim Mullen, Reach plc Chief Executive:
"We have had a positive start to the year and are seeing the benefits of last year's transformation programme. With digital now accounting for more of our advertising revenues than print and growing strongly, we are well placed to make further progress during 2021. We have a strong balance sheet and are now increasing investment to accelerate delivery of the Customer Value Strategy, focusing on the use of enhanced customer insight to drive engagement and support our medium-term objective of doubling digital revenues."
1 Latest company compiled view of market expectations shows consensus adjusted operating profit of £137.1m for 2021
Notes
Revenue movements stated on like-for-like basis excluding ISL and impact of regional portfolio changes.
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| Period YOY Breakdown |
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| Period YOY % | Q1 YOY % | April YOY % | Period 2yr %* |
| Digital Revenue | 35.0% | 25.2% | 78.4% | 41.3% |
| Print Revenue | -10.4% | -15.2% | 9.1% | -24.3% |
| - circulation revenue | -7.9% | -11.3% | 5.3% | -15.8% |
| Group Revenue | -3.1% | -8.7% | 19.7% | -15.5% |
*Period 2yr movement is a combined two-year like-for-like comparison versus the same period in 2019
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
David Allchurch/Giles Kernick +44 (0)207 353 4200
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