Trading Update

RNS Number : 6932G

Reach PLC

27 November 2020

 

27 November 2020

Reach plc

('Reach' or 'the Company')

Trading Update

 Digital momentum drives performance ahead of 2020 market expectations

Reach plc is today issuing a trading update for the 52 weeks ending 27 December 2020, covering the period from 29 June to 27 November 2020 ('the period').

Strong digital growth, resilient circulation

Overall Group performance has exceeded market expectations, with continued strong digital revenue growth of 16.2% for the five months to 22 November 2020, assisted by increased customer engagement.

Circulation sales have remained resilient despite the recent lockdowns, supported by management action on availability and increased cross-promotion of national and regional titles. Overall, for the five months to 22 November 2020, a decline in print revenue of 19.6% contributed to a Group revenue decline of 13.9%.

The Group expects these trends of strong digital growth and resilient circulation to continue into December, while recognising that the current macroeconomic uncertainties make forecasting more challenging.

New, more efficient operating model

During the period, Group costs have been significantly reduced, underpinned by the transformation programme. Given this cost focus and increasing digital contribution, the operating margin in the second half is expected to be materially ahead of the first half.

Having successfully implemented a strategic transformation programme in the period, the Company has recently announced plans to consolidate its printing operations to achieve further efficiencies. A consultation on these proposals, which would involve closure of two of its six printing sites, is ongoing.

Continued good progress with new customer value strategy

Customer registrations have now exceeded 4.25m, and the company is on track to deliver the 10m registrations it is targeting by the end of 2022. Reach retains its leading scale audience in the UK with 42.1m unique monthly visitors accessing its sites during October.   

The strengthened customer and insight team continues to focus on the launch of the Reach ID, which is on track to launch in December as planned. This will unlock significant potential in the form of customer insights that Reach can offer during 2021.

Acquisition of remaining 50% in Independent Star Limited

The Group completed the acquisition of the remaining 50% in Independent Star Limited on 24 November 2020. The addition of the Irish Star assets to the Reach portfolio brings the number of newspapers it publishes in Ireland - North and South - to eight, plus one female lifestyle magazine (RSVP) and six online titles (Irishmirror.ie, Dublin Live, Cork Beo, Belfast Live, RSVP Live and Buzz.ie).

Positive balance sheet supported by strong cash flow

The Group has continued to generate healthy levels of cash during the period and is forecast to retain a strong positive cash position at year-end despite incurring one off cash costs associated with the transformation programme and other historical items.

Jim Mullen, Chief Executive Officer of Reach plc, commented:

"The passion and talent of our people continue to take the Group and its news brands forward to its digital future. Reach has continued to deliver great content and continues to drive increased customer loyalty and engagement.

The headwinds from COVID-19 have 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. Our customer value strategy is now entering a new phase, with an increased focus on business intelligence and insight. The launch of the Reach ID, which will deliver a single view of customer activity across our national and regional network, is on track for December, and will provide enhanced data and insight that will support further digital revenue growth.

2020 has been a pivotal year for Reach and the response of our colleagues to the challenges of 2020 has been first-class. Whilst macroeconomic uncertainty remains, we approach 2021 with confidence in the long-term value of our loyal audience and trusted brands and with strong digital momentum."

-ends-

Note:

Revenue trends on an actual and like-for-like basis are the same for 2020. The period relates to 29 June to 22 November 2020 with November representing the latest estimate of revenues.

Reach will issue its Annual Results Announcement for the financial year ending 27 December 2020 on 1 March 2021.

Enquiries
Jim Mullen, Chief Executive Officer
Simon Fuller, Chief Financial Officer	[e-mail]
Ciaran O'Brien, Director of Communications	020 7353 4200
Tulchan Communications
David Allchurch / Giles Kernick	[e-mail]

About Reach plc

Reach plc is the largest commercial national and regional news publisher in the UK with a growing portfolio in Ireland. We create engaging, differentiated content which is distributed through newspapers, magazines and digital platforms - playing a central role in our audiences' daily lives.

Our national and regional brands have a long heritage of being trusted sources of the latest news, information, sport and entertainment, offering a range of opportunities to connect brands with consumers. With one of the biggest monthly multi-platform audiences in the UK Reach's national and regional news brands are prominent champions, campaigners and changemakers.

For more information visit www. reachplc.com.

Conference Call

A conference call for analysts and institutional investors will be held today at 8.30am. You can join via conference call using the details below:

1. In the 10 minutes prior to call start time, call the appropriate Participant Dial-In Number listed in the Conference Dial-In Number section below.
2. Enter the Event Plus Passcode stated below and leave any information requested after the tone. You will be joined automatically to the conference.

Note: Due to regional restrictions some participants may receive Operator assistance when joining this conference call and will not be automatically connected.

Event Plus Passcode: 9697747
Participant UK FreeCall Dial-In Numbers: 0800 279 6619
Participant Event Plus Std International Dial-In: [phone]
Participant UK LocalCall Dial-In Number: 08444 819 752

For those of you unable to join the call on Friday, there will be a recording made available on our website in the coming days.

Forward looking statements

This announcement has been prepared in relation to the financial results for the 52 weeks ended 27 December 2020. 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', 'seek, 'anticipate', 'project', 'estimate', 'intend', 'continue', 'target', 'plan', 'goal', 'aim', 'achieve' or 'believe' (or the negatives thereof) or words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by members of management of the Company (including, without limitation, during management presentations to financial analysts) in connection with this announcement. 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 or other financial condition or performance measures 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 forward-looking statements reflect knowledge and information available at the date of this announcement and the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information or to reflect any change in circumstances or in the Company's expectations or otherwise.

 

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