Reach, the publisher of the Daily Mirror and Daily Express newspapers, expects profits to beat expectations after a surge in online revenues, sending shares in the group up 25 per cent on Friday.
The UK’s largest regional news media group said its underlying operating profit for 2020 will be between £130m and £135m, ahead of analysts’ consensus of £122m compiled by the company.
Online revenues grew 25 per cent in the fourth quarter, up from 13 per cent in the third, Reach said in a statement. Despite an improved performance from its online business, the pandemic has been bruising for the company.
The group said in July that it would cut 550 jobs, or slightly more than 10 per cent of its workforce. Revenues from its newspapers remain critical, and circulation of its titles fell 12 per cent in the fourth quarter. Overall revenues for the group in the quarter dropped 10 per cent from a year ago.
Chief executive Jim Mullen was brought in less than two years ago with a mandate to transform the sprawling newspaper group to a digital media business.
Mr Mullen said on Friday that “it is a testament to our people that Reach has not only dealt with the unique challenges 2020 has presented, but we have accelerated our strategy and we are ahead of where we expected to be”.
Shares in Reach surged 25 per cent to 221p, their highest level in more than a decade.
Analysts at Peel Hunt said “the new strategy aimed at unlocking the potential of its audience base, is clearly showing progress”.