The owner of the Daily Mirror and Daily Express newspapers has reported strong growth in digital revenues but a slump in print sales, with the pandemic adding stress to an already struggling industry.
Digital revenue at Reach, which is also the UK’s largest regional newspaper publisher, grew 16 per cent in the five months to November, ahead of analysts’ expectations.
But print revenues, which last year made up 84 per cent of the total, fell by a fifth, pushing group revenues down 14 per cent.
The pandemic has had a bruising effect on the newspaper industry, where circulation and advertising spending were already in sharp decline.
Reach announced in July that it would cut 550 jobs, 12 per cent of its workforce, and close some regional offices. It had earlier announced a 10 per cent staff pay cut.
The company’s chief executive Jim Mullen and chief financial officer Simon Fuller were paid almost £290,000 in cash bonuses last year and given £1.25m in share options as part of a long-term incentive plan for the next five years. Reach said on Friday that staff pay had been reinstated to pre-pandemic levels in September and that no bonuses would be paid this financial year.
Mr Mullen said that headwinds from the pandemic had been “considerable”.
“But while we remain mindful of potential impacts from the current lockdowns, we approach the end of the year with a strong and growing digital business, resilient print circulation sales, and a new, efficient operating model,” he added.
Mr Mullen said that the company was planning new technology that would track readers across its different titles, which include the Manchester Evening News and Liverpool Echo, and provide advertisers with “enhanced data and insight that will support further digital revenue growth”.
Analysts at Numis said the acceleration of digital revenue growth was the most important detail in the company’s trading update.
Reach’s share price rose 4 per cent on Friday morning after the results were published and has been on a steady return towards pre-pandemic levels, helped by better than expected half-year results in September.
Before Mr Mullen took over the company last year, Reach had been known as an aggressive consolidator, rapidly snapping up titles.
Mr Mullen has been more cautious, focusing instead on a goal of 10m registered online readers by the end of 2022. But the company did last week buy 50 per cent of the Irish Daily Star, completing a takeover begun in 2018 and cementing its position as one of Ireland’s largest publishers.