Reach print revenue declines, digital grows modestly

(Sharecast News) - Reach reported modest digital revenue growth in its third quarter on Tuesday, partially offsetting continued print declines, as the publisher pressed ahead with its restructuring plan to support future growth. For the three months ended 30 September, digital revenue rose 2.1% year on year, while group revenue fell 2.5%.

Print revenue declined 3.9% in the quarter, reflecting lower circulation and advertising income.

Over the first nine months of the year, digital revenue grew 1.9% while group revenue was down 3.1%.

Within digital, indirect revenues - which include off-platform income from social media and programmatic advertising - increased 4%, helped by strong growth in off-platform channels.

Direct revenues, generated from advertising sold directly to agencies and brands, slipped 0.8%, weighed by a weaker local market environment.

Reach said page views fell 1% over the nine-month period amid lower referral volumes, particularly from Google.

Print circulation revenue declined 2.7% in the quarter but remained a "reliable and predictable" source of income, while print advertising fell 13.3%, though still performed ahead of circulation volume declines.

"We delivered a good financial performance despite continued volatility in referral volume and we made strong progress across our strategic priorities; including the creation of new video teams in the newsrooms, new video launches such as the Daily Expresso and All Out Football, and an increase in branded video revenue," said chief executive Piers North.

"We also delivered continued success in our diversified revenues including the OK! Beauty Box and are now working at pace on further initiatives, launching our digital subscriptions pilot in the coming weeks."

Reach said it had restructured the business around three key growth priorities - increasing video output, developing new commercial propositions, and expanding off-platform audiences.

The reorganisation would result in some job losses, the company said, with restructuring costs expected to total around £20m for the year.

Reach said profit expectations remained well supported by resilient print performance and disciplined cost control, with cost savings of 4% to 5% on track.

Full-year digital revenue was expected to be broadly flat amid ongoing volatility in referral traffic and a weak macroeconomic backdrop, but Reach reaffirmed its guidance to deliver full-year results in line with market expectations.

At 0954 BST, shares in Reach were down 3.72% at 62p.

Reporting by Josh White for Sharecast.com.