Newspaper publisher Reach (RCH) reversed earlier gains to trade down 3.5% to 168.5p amid widespread market weakness as it reported a robust set of full year results.
Daily Mirror and Daily Express newspaper publisher Reach swung to a full-year profit after a continuing slide in sales was offset by cost cutting. The company enjoyed the first full year contribution from its Express & Star acquisition which went through in 2018.
BIG ONLINE USER PUSH
The company also said it was targeting a rise to 7m registered customers by the end of 2022, up from less than 1m at the end of 2019, as part of a strategy update. The customer value strategy is aimed at boosting digital revenue, more detail on these plans is likely to be revealed at an analyst meeting later.
Pre-tax profit for the year through December amounted to £120.9m, swinging from a loss of £119.9m in 2018 that included large asset writedowns.
Revenue fell 3% to £702.5m and on a like-for-like basis fell 5.3%, though adjusted profit rose 6.1% to £150.6m owing to 'significant cost efficiencies'. Underlying revenue fell by the smallest amount since 2014 and the operating margin hit 21.8%, a level not achieved in more than a decade.
Reach declared a full-year dividend of 6.55p per share, up 6.7% on-year. The company ended the year with £20.4m of cash on the balance sheet, underpinning the payout. The pension deficit fell £52.7m to £295.9m.
The company also said it had continued to perform in line with management expectations since year end.
BRIDGE BUILDING
Commenting on the company’s strategic plan Numis analyst Gareth Davies says: ‘At the heart of this strategy is the drive to bridge the current anonymity of digital and print relationships, by building known customer relationships.
‘This will allow content to be made more relevant, advertising more targeted, services more useful and customer relationships more meaningful and therefore more valuable.
‘Of note amongst the UK's top four digital assets 90% of customers have consented to give data versus Reach current penetration of just 2% - largely because the group has not asked.’
