Covid-19 Update

RNS Number : 6841H

Reach PLC

26 March 2020

 

26 March 2020

Reach plc

('Reach' or 'the Company')

Company and COVID-19 Update

OPERATIONAL MANAGEMENT

With the emergence of the COVID-19 pandemic, our priorities have been to safeguard the health and wellbeing of our colleagues, maintain our business operations and to continue to provide high quality and trusted editorial content, which is needed more now than ever.

Our Senior Executive and operational management teams have been quick to successfully move to a new framework of remote working. Both teams are at full strength with key succession planning in place. We have reviewed our continuity plans for production, printing and distribution, where remote working is often not feasible. Our valued people are a key driver of our future success and our priority is looking after our colleagues, to ensure we are well placed to deliver on our strategy when conditions start to normalise.

Given the rapidly changing situation, we have actively shaped business operations to best adapt to the current trading environment. This has included broadening our interactions with customers (via apps and newsletters), alongside offering more convenient options for our printed products, with an increase in home delivery.

CURRENT TRADING

Whilst the first 12 weeks of the new financial year have traded overall in line with our expectations, the situation remains significantly uncertain and it is too early to assess the expected impact that the COVID-19 pandemic will have on FY 2020 and beyond. Currently, the principal trading areas expected to be impacted are advertising, print circulation and events. Advertising revenue deferrals may be expected given its discretionary nature, print circulation will be impacted by footfall reductions and closures of outlets and events delays or cancellation may be necessary. Mitigation plans are being developed to try to partially offset some of these. We expect to provide further financial guidance at the time of our AGM Trading Update, which is scheduled for 7 May 2020.

BALANCE SHEET AND LIQUIDITY

As noted in our recent preliminary results, the business came into the year with a robust balance sheet position and has adequate liquidity. Through strong cash generation in 2019, the prior year net debt balance had become net cash of £20.4m and new 4-year revolving banking facilities of £65m had been agreed (with a 1.75x EBITDA covenant). The business has a proven track record for disciplined cost control and strong cash management, which will continue to be vital in the current trading environment.

DIVIDEND

There is currently no change to the announced 2019 full year dividend, which will be voted on by shareholders at the forthcoming AGM.

UPCOMING AGM

Our AGM is currently scheduled for 7 May 2020. This is being kept under review and a further announcement will be made in due course.

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Enquiries

Reach	020 7293 3000
Jim Mullen, Chief Executive Officer Simon Fuller, Chief Financial Officer
Tulchan Communications	020 7353 4200
David Allchurch, Partner

About Reach plc

Reach plc is the largest commercial national and regional news publisher in the UK, with over 150 national and regional multichannel brands including the Mirror, Express, Star, OK!, New!, Daily Record, Manchester Evening News, Liverpool Echo, WalesOnline, MyLondon and BelfastLive.

In December 2019, Reach sold 40m newspapers and reached a digital audience of over 40m people in the UK. For more information visit: www.reachplc.com.

Forward-looking statements

You are not to construe the content of this announcement as investment, legal or tax advice and you should make your own evaluation of the Company and the market. If you are in any doubt about the contents of this announcement or the action you should take, you should consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (or if you are a person outside the UK, otherwise duly qualified in your jurisdiction). This announcement has been prepared in relation to the financial results for the five months ended 24 November 2019 and trading in the period 1 July to 29 November 2019. The financial information referenced in this announcement is not audited and does not contain sufficient detail to allow a full understanding of the results of the Group. Nothing in this announcement should be construed as either an offer or invitation to sell or any offering of securities or any invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Group or an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (as amended). Certain information contained in this announcement may constitute "forward-looking statements", which can be identified by the use of terms such as "may", "will", "would", "could", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "plan", "goal", "aim" or "believe" (or the negatives thereof) or other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, changes in global or regional trade conditions, changes in tax rates, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks, assumptions and uncertainties that could cause actual events or results or actual performance of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements. The Company does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in the Company's expectations.

 

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