Half-Yearly Financial Report September 28, 2020

Half-yearly Financial Report September 28, 2020

RNS Number : 2186A Reach PLC 28 September 2020

28 September 2020 Reach plc Reach plc ('Reach', 'the Company', 'the Group'), the largest commercial naonal and regional news publisher in the UK, today announces its half-yearly results for the 26-week period ended 28 June 2020. Performing materially ahead of 2020 market expectaons

Results Adjusted results(1) Statutory results 2020 2019 2020 2019 £m £m £m £m Revenue 290.8 352.6 290.8 352.6 Operang proﬁt 54.9 71.3 28.9 63.7 Proﬁt before tax 53.5 69.9 25.2 58.2 Earnings/(loss) per share 14.6p 19.1p (0.8)p 15.9p

Key highlights

· Strong recovery in digital adversing and increased customer engagement across all channels secured year on year digital revenue(2) growth in Q3 of 12.9%.

· Eﬀecve strategic and operaonal delivery with over 3.5m customer registraons, with new and improved plaorms driving record digital audiences and increased page views.

· Transformaon programme across editorial, adversing and central operaons provides a strong foundaon to accelerate customer value strategy, with cost base reduced by at least £35m.

· The Group is currently performing materially ahead of market expectaons for the full year though management remain fully aware that COVID-19 sll represents a signiﬁcant macro-economic challenge to the UK economy, with the potenal for subsequent negave impacts on the business. Commenng on the interim results for 2020, Jim Mullen, Chief Execuve Oﬃcer, Reach plc, said:

"We have seen a strong recovery in the digital adversing market since the worst impacts of COVID-19 in April which has driven a return to healthy digital revenue growth since July, assisted by increased customer engagement and loyalty. This illustrates the signiﬁcant potenal of the customer value strategy as our websites, apps and newsleers aract increased page views from our scale audience, helping to drive forward digital revenues. Circulaon sales have also stabilised and shown a gradual recovery during Q2 and Q3.

Following the implementaon of the major parts of the transformaon programme, Reach now has a strong foundaon to drive the next phase of the customer value strategy with increased eﬃciency and agility in our adversing and editorial operaons. Award-winning journalism and content enable our news brands to shape the daily conversaons of millions of people. Moving forward we will see connued momentum from new and improved products. Our strengthened customer insight and innovaon teams will assist us in driving stronger and deeper customer relaonships, increasing our appeal to adversers and driving revenue growth. This will enable Reach to connue to deliver for stakeholders over the long-term. With the business currently performing materially ahead of market expectaons, the Board is recommending an issue of bonus shares to shareholders." Financial highlights

· H1 Revenue of £290.8m, down 17.5%, reﬂecng the impact of COVID-19 on all revenue categories. This compared to a like-for-like fall of 6.3% in the ﬁrst half of 2019.

· Adjusted operang proﬁt of £54.9m with adjusted operang margin of 18.9% beneﬁng from strong management acon on costs.

· Statutory operang proﬁt of £28.9m impacted by provisions for historical legal issues and historical contract issues with loss per share also impacted by deferred tax charge relang to the reversal of the corporaon tax rate decrease.

· Accounng pension deﬁcit (IAS 19 net of deferred tax) decreased by £33.0m to £209.9m, helped by cash contribuons and strong asset returns.

· Strong cash generated from operaons(3) of £47.9m with half-year net cash(4) posive posion of £41.9m reﬂecng the proacve steps taken to preserve cash. This provides the Group with suﬃcient cash to fund the transformaon, to invest in the customer value strategy and to provide a level of protecon in the event of further COVID-19 impacts. Operaonal and strategic highlights

· The transformaon programme announced in July to reshape the Group into a streamlined, more eﬃcient organisaon across editorial, adversing and central operaons is now materially complete with ancipated annualised savings of at least £35m. With ongoing uncertainty over third-party print contract renewals and future volumes we will now also review our print capacity requirements during Q4.

· The customer value strategy is deepening engagement with our users and increasing loyalty with average monthly loyal users in March to August increasing by 27.2% year on year. This is delivering a related digital revenue acceleraon through increased adversing and content consumpon. In Q4 we will introduce a single Reach customer view to enable us to measure the impact of enhanced data on adversing yields. Current trading and outlook

· For Q3, Group revenue declined by 15.0% year on year, a signiﬁcant improvement on the 27.5% decline seen in Q2. Print declined by 19.9% in Q3, improving on the 29.5% decline in Q2, helped by gradual improvements in circulaon revenue. The digital business grew 12.9% in Q3, compared with a Q2 decline of 14.8%, beneﬁng from a strong recovery in digital adversing and increased customer engagement across all channels.

· While an interim dividend of 2.50p was paid in 2019, cash dividends remain suspended due to COVID-19 uncertainty. However, with the Group currently performing materially ahead of market expectaons for 2020, the Board is recommending a proposed bonus issue to shareholders, in lieu of and with a value equivalent to, an interim dividend of 2.63p, subject to shareholder approval. The Board intends to resume cash dividends at an appropriate me, subject to market condions.

Enquiries Reach 020 7293 3000 Jim Mullen, Chief Execuve Oﬃcer communica[email protected] Simon Fuller, Chief Financial Oﬃcer Ciaran O'Brien, Communicaons Director

Tulchan Communicaons 020 7353 4200 David Allchurch / Giles Kernick [email protected]

About Reach plc Reach plc is the UK's largest commercial news publisher, with over 43 million unique visitors to its live sites and apps during August 2020. Its 150 naonal and regional news brands including the Mirror, Express, Star, Daily Record, Manchester Evening News, Liverpool Echo, WalesOnline, MyLondon, 48 Live branded sites, local community and informaon plaorm InYourArea, and naonal magazine brands OK! and New!.

For more informaon visit www. reachplc.com.

Results and strategic update presentaon

A conference call facility and live webcast for analysts and instuonal investors will be held today at 9am. Details are as follows: ● Conference call - telephone number: 0800 279 6619 or +44 (0) 2071 928338; conference ID number: 4319989 ● Webcast - URL: hps://edge.media-server.com/mmc/p/x4z4t2vj

A copy of the presentaon and a replay recording of the presentaon via audio webcast will be available at www.reachplc.com later today.

Notes (1) Set out in note 18 is the reconciliaon between the statutory and adjusted results. The current period is for the 26 weeks ended 28 June 2020 ('2020') and the comparave period is for the 26 weeks ended 30 June 2019 ('2019'). (2) Revenue trends on an actual and like-for-like basis are the same for 2020. Q3 relates to the period from 29 June to 27 September 2020 which September represenng the latest esmate of revenues. (3) Cash generated from operaons has been extracted from the consolidated cash flow. An adjusted cash flow is presented in note 19 which reconciles the adjusted operang profit to the net change in cash and cash equivalents. Set out in note 20 is the reconciliaon between the statutory and adjusted cash flow. (4) Cash and cash equivalents of £66.9m less £25.0m drawings on RCF (note 14). (5) The Group has implemented IFRS 16 'Leases' with effect from 30 December 2019 using the modified retrospecve approach to transion and has accordingly not restated prior periods. Revenue is not impacted by the adopon of IFRS 16. The impact of IFRS 16 on the consolidated Balance Sheet, consolidated Income Statement and consolidated Cash flow Statement is shown in note 2.

Forward looking statements This announcement has been prepared in relaon to the financial results for the 26 weeks ended 28 June 2020. Certain informaon contained in this announcement may constute 'forward-looking statements', which can be idenfied by the use of terms such as 'may', 'will', 'would', 'could', 'should', 'expect', 'seek, 'ancipate', 'project', 'esmate', 'intend', 'connue', 'target', 'plan', 'goal', 'aim', 'achieve' or 'believe' (or the negaves thereof) or words of similar meaning. Forward-looking statements can be made in wring but also may be made verbally by members of management of the Company (including, without limitaon, during management presentaons to financial analysts) in connecon with this announcement. These forward-looking statements include all maers that are not historical facts and include statements regarding the Company's intenons, beliefs or current expectaons concerning, among other things, the Company's results of operaons, financial condion, changes in global or regional trade condions, changes in tax rates, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks, assumpons and uncertaines that could cause actual events or results or actual performance or other financial condion or performance measures of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representaon 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 informaon available at the date of this announcement and the Company does not undertake any obligaon to update or revise any forward-looking statement, whether as a result of new informaon or to reflect any change in circumstances or in the Company's expectaons or otherwise.

Chief Execuve's Review Strong response to COVID-19, accelerang customer value strategy

Whilst COVID-19 presented operaonal and financial challenges to Reach during the first half, we enter the final quarter of the year as a strong, profitable business that has accelerated the delivery of the customer value strategy that will drive our future growth.

Reach began the year in the same posive vein with which we ﬁnished last year - seeing strong digital growth, increased customer engagement and expected declines in circulaon revenues. Then COVID-19 saw reduced levels of adversing and falls in circulaon sales, impacng our overall revenues. In April, when the impact of COVID-19 was at its worst, Group revenue fell by 30.5% year on year.

The response of our colleagues to these challenges has been first-class. Within days of lockdown being announced, our IT, HR, finance, editorial, producon, commercial and prinng teams all adjusted to new ways of working, whether facilitang home working for thousands of colleagues, finalising newspaper producon from home or working under required new safety measures in our print facilies.

Throughout the toughest days of lockdown, our commercial teams kept their creavity and team spirits high to connue to deliver for our clients - helping our Soluons team to go on to scoop a Campaign award for Commercial Team of the Year earlier this month.

As the wider economic impacts of lockdown led to reduced adversing levels and double-digit declines in print sales we acted swiftly to protect the business - reducing costs and conserving cash. Once the market had stabilised, we were able to announce a major transformaon process - developed and delivered within several months enrely overseen by the Reach management team.

And throughout, we connued to deliver great content, maintain our leading scale digital audience and drive customer loyalty and engagement to record levels. From the Daily Express campaign securing life-saving treatment for cysc ﬁbrosis suﬀerers to the Daily Mirror's campaign to change the law on organ donaon or the Daily Star's Dominic Cummings cut-out mask front page - Reach tles have connued to set the agenda. And our award-winning regional tles have also connued to shape conversaons of millions of people - from the Newcastle Chronicle charng the inside story of the failed takeover of Newcastle United to the Liverpool Echo marking Liverpool's Premier League triumph after a 30-year wait. In Scotland the Daily Record campaigned against the Scosh Government's use of algorithms to mark down exam results.

As we accelerated our customer value strategy, great content combined with innovaon has produced some exceponal results. We exceeded our original registraon target of 2.0m for the end of 2020 by the middle of the year and have connued the impressive growth to now stand at 3.5m registered customers.

In just six months since February, we have increased the percentage of our audience that is registered from around 2% to 8% and maintained our posion as the ﬁfth-largest plaorm in the UK - with only Google, Facebook, Microsoft and Amazon ahead of us. We connue to see record audiences with 42.9m unique visitors in August and a digital market share of 63% of the UK's regional publishing audience.

And the customer loyalty that is so key to our strategy is building. In August we saw an 11% growth in loyal visitors per day compared to June and loyal page views were up 77% in that month compared to the same month last year.

Q3 has seen our digital business return to double-digit revenue growth - a trend that provides great encouragement to the business as we enter the ﬁnal quarter of the year.

Reach connues to oﬀer a compelling opportunity to drive increasing value as we deepen our relaonships with and beer engage and understand our customers. We have accelerated our strategic plans and we connue to drive the strategy forward with relentless focus.

Moving forward, the business has a strong foundaon from which it can realise its true potenal and value. We have established a lower cost base and reorganised the business in a new, agile structure. We connue to deliver a stable market share in print and we are seeing momentum in our customer value strategy. Once fully completed the transformaon will improve our adjusted operang margin. We ancipate it will grow further next year, enabling Reach to generate signiﬁcant levels of cash, enabling us to invest in the customer value strategy, pay down the historic pension deﬁcits, and resume cash dividends at an appropriate me, subject to market condions.

Overview

Total revenue for the first half was down by 17.5% to £290.8m with the posive start to the year offset by the COVID-19 impact from mid-March to the end of the first half.

Print revenue fell by 20.1% to £241.0m with the more resilient circulaon revenue declining by 11.5% and the harder hit print adversing declining by 31.9%.

Digital was much more resilient and only saw a decline of 1.0% over the first half, benefing from strong growth in the first quarter, followed by declines in Q2 as adversers withdrew from the market and digital yields fell as a result of less compeve tension in the marketplace. This meant that despite our impressive audience numbers we sll saw revenue declines in digital from mid- March for the rest of the first half. Strong digital revenue momentum returned in Q3 with 12.9% year on year growth.

The Group connues to maintain a strong balance sheet with a posive net cash balance of £41.9m reﬂecng the cash generaon of the Group during the crisis and providing a level of protecon in the event of any further extensive lockdowns. COVID-19 sll represents a signiﬁcant macro-economic challenge to the UK economy, with the potenal for subsequent negave impacts on the business.

Adjusted operang proﬁt of £54.9m and adjusted operang margin of 18.9% beneﬁed from the strong acons taken in response to COVID-19.

Strong Management Response to COVID-19

Prior to the COVID-19 lockdown Reach had begun the year with connued digital growth and resilient print revenue. In February at our 2019 full year results announcement we detailed the customer value strategy and had a target of 2m customer registraons by the end of 2020.

The COVID-19 lockdown began in mid-March and inevitably had a significant impact on revenues - with lockdown leading to closures of many outlets and significantly reducing fooall in those remaining open. This led to significant year on year declines in print sales for our naonal and regional print tles. Addionally, adversers began to withdraw from the marketplace impacng both print and digital at a regional and naonal level - with the regional market the worst affected. While supermarket and COVID-19 related adversing, including from the financial services sector and Government, helped throughout the lockdown, when COVID-19 was at its worst we saw around 80% of our regional adversers withdraw from the market.

Faced with these signiﬁcant impacts and the ongoing uncertainty surrounding the length of lockdown and impact of the pandemic, the Board agreed to a series of short-term measures to reduce costs and conserve cash. The aim of these short term acons was to protect the business and its news tles from the signiﬁcant uncertainty created by the pandemic.

A number of cash conservaon measures were introduced including the removal of discreonary spend, renegoaons with suppliers and cancellaons of orders. In addion to this a 10% pay reducon was introduced for most colleagues with the Board, along with some members of the senior editorial and management team, taking a pay reducon of 20%. All annual bonus schemes for 2020 were suspended and 20% of Reach colleagues were furloughed. In addion pension fund contribuons were deferred for three months and the 2019 ﬁnal dividend was cancelled.

These measures ensured short-term protecon for the business during the worst-impacted months of COVID-19. However, it became clear that in order to ensure the business could not just survive ongoing uncertainty but be in a posion to thrive in the new market condions, more radical changes to the business were required. Given this, in July we announced the transformaon programme and acceleraon of our customer value strategy.

Transformaon and acceleraon of our customer value strategy

Whilst an important outcome from the transformaon is a much lower cost base and higher operang margin, at its heart the change is about maximising the Reach business model. Historically Reach has operated in a siloed fashion whether between regional and naonal or print and digital, with the central corporate team operang as a separate division. As a business that is commied to accelerang our customer value strategy we are seeking to maximise our business model and become a much more agile and eﬃcient organisaon.

The changes run throughout the organisaon with the Execuve team adopng a culture of data-led analysis, construcve challenge and swift decision-making aimed at ensuring rapid delivery of our strategic goals across the business.

Transformaon and acceleraon of our customer value strategy (connued)

The transformaon has done away with the disncon between regional and naonal products with Reach operang as one editorial operaon. The new Reach Newswire is enabling content to be shared across the organisaon and to be tailored and adapted for each tle or website.

Operang under more ﬂexible working arrangements, most of our editorial teams now operate across print and digital with analycs being constantly monitored to ensure content responds to readers' demand.

Adversing and editorial teams work closely together to aract new business, giving clients an understanding of the breadth of Reach's mainstream audience - a key reason behind Reach scooping the Campaign Award for Commercial Team of the Year in August. Our award-winning journalism and content enable our news brands to shape the daily conversaons of millions of people.

An important aspect of the transformaon was to gear the costs of the business to the new market condions post-COVID-19 and the planned cost reducons, including redundancies, will save the business at least £35m annually at an esmated one-oﬀ cost of £20m. Thankfully these changes were achieved with fewer compulsory redundancies than originally planned thanks to extensive redeployment and voluntary redundancies.

Despite the changes, the dedicaon and focus of our teams has enabled the business to connue to accelerate its strategy with customer registraons at 3.5m at the end of September - up from 2.5m in early July and just 0.8m in January.

In June we saw 1.64 billion page views, up 28.3% year on year with 3.3m loyal visitors a day across all plaorms. Our NHS Heroes site aracted over 0.4m people to send messages of support to NHS workers. InYourArea had grown to 0.8m registered users in early July and now stands at 1.3m registered users.

Strong recovery in digital revenue, steady improvement in circulaon sales

Since June the increased audience engagement has contributed to strong year on year improvement in digital revenues, illustrang the potenal of the customer value strategy announced in February. In Q3 digital revenue grew by 12.9% year on year. Circulaon revenue declined by just 12.7% year on year during Q3 - a signiﬁcant improvement from the 18.2% year on year decline seen during Q2 when the COVID-19 impact was at its worst.

The Group connues to deliver strong levels of cash generaon and has a strong balance sheet which means we can connue to invest in the business and are in a beer place to react to any further impacts from metropolitan, regional or more extensive lockdowns. We connue to be aware of the possibility of further macro-economic impacts due to COVID-19 and consequently the steps that may need to be taken to protect our business.

With the Group currently performing materially ahead of market expectaons for 2020, the Board is recommending a proposed bonus issue to shareholders, in lieu of and with a value equivalent to, an interim dividend of 2.63p, subject to shareholder approval. The Board intends to resume cash dividends at an appropriate me, subject to market condions.

In recognion of their contribuon and achievements during a challenging year, and to ensure all Reach colleagues have an opportunity to share in the future success of the Group, the Company is proposing, subject to shareholder approval, to award shares to colleagues (up to a value of £400) during Q4 and to launch a sharesave scheme in 2021. By implemenng an all-employee share plan, the Company can ulise the treasury shares it holds, conserving cash and ensuring there is no diluon of share capital.

Moving forward Reach has established a strong, agile structure with a lower cost base and is focussed on connuing the momentum in our customer value strategy which posions us well to build on our posion as the ﬁfth largest digital plaorm in the UK. With increased customer engagement we are well placed to connue our digital growth, while our print tles connue to aract a large audience and to generate cash for further investment in new and enhanced products as well as provide returns to stakeholders.

Jim Mullen Chief Execuve Oﬃcer 28 September 2020

Financial Review Performance of the Group impacted by the COVID-19 outbreak

Group performance in the period has been impacted by the COVID-19 outbreak. Having started well with encouraging digital growth and improved print declines, the COVID-19 crisis began impacng the business from mid-March.

Year on Year Revenue Change January February Q1 Q2 HY % % % % % Print (9.3) (8.4) (10.7) (29.5) (20.1) Digital 15.3 24.6 13.7 (14.8) (1.0) Group (5.8) (4.0) (7.4) (27.5) (17.5) *Revenue trends on an actual and like-for-like basis are the same for 2020.

Revenue declines in January and February were 5.8% and 4.0% respecvely which compares to like-for-like declines for the ﬁrst half of 2019 of 6.3%. March began consistent with these earlier months but was signiﬁcantly impacted by the COVID-19 outbreak from the middle of March as the UK entered into lockdown. This resulted in the Q1 decline being 7.4%. April when the impact of COVID-19 was at its worst saw Group revenue declines of 30.5% with print down 31.8% and digital down 22.5%. The impact lessened in May and then further into June as the lockdown restricons eased. Group revenue in June declined by 23.9% in June with print down 26.7% and digital down 4.9%. The improvement in the trend has connued into Q3.

The Group has connued to maintain a strong balance sheet with adequate liquidity. The posive net cash balance of £41.9m is an increase of £21.5m on the prior year end reﬂecng the connuing proﬁtability of the Group and our proacve steps taken to preserve cash. This represents a cash balance of £66.9m less £25.0m which was drawn from the Group's revolving credit facility of £65.0m.

Trading performance Impacted by the COVID-19 outbreak Revenue declined by 17.5% compared to a like-for-like fall of 6.3% in the ﬁrst half of 2019, impacted by the COVID-19 outbreak. Within this, print revenue fell by 20.1% (2019: down 8.2%) and digital revenue fell by 1.0% (2019: up 9.7%).

Print revenue fell by 20.1% to £241.0m, with the more resilient circulaon revenue declining by 11.5% while adversing revenue declined by 31.9% due to the signiﬁcant impact on print adversing volumes. Circulaon revenue now accounts for 68.0% of print revenue.

Circulaon volumes for the Group's naonal daily tles (excluding the impact of sampling) fell by 18.9% which compares to a decline for the UK tabloid market excluding The Sun of 15.4%. The Group's naonal Sunday tles (excluding the impact of sampling) fell by 17.6% which compares to a decline for the UK tabloid market excluding The Sun on Sunday of 15.3%. Volume declines for our regional tles were 18.2% for paid-for dailies, 27.3% for paid-for weeklies and 24.4% for paid-for Sundays. The circulaon volumes for the paid-for magazines, OK! and New!, connued to face challenging trading. The circulaon volume trend versus the market average have been impacted by cover price diﬀerenals and inﬂaon strategy.

Our naonally sourced adversing performed beer than locally sourced adversing. Naonally while volumes declined in a number of sectors there were some sectors which connued to adverse. The impact on locally sourced adversing was greater with the majority of adversers not adversing at all combined with much reduced classiﬁed adverts.

Prinng revenue decreased by 40.1% driven by a reducon of contract print as third pares reduced volumes or suspended publicaons.

Other revenue decreased by 35.8% driven by reduced enterprise revenues such as holidays and from the cancellaon of events and reducon in other contract prinng parcularly sports programmes.

Digital revenue comprises the combined display and transaconal revenue streams which are predominantly directly driven by page views. We enjoyed significant page view growth in the period with average monthly worldwide page views growing by 45% year on year to 1.7bn. Mobile page views grew by 55% and desktop page views grew by 13%. This was more than offset by the impact of COVID-19 on yields as the volume of adversers reduced significantly which resulted in digital revenues being marginally down by 1.0% to £48.2m.

Other revenue is derived from our specialist digital recruitment websites.

Delivery of significant cost savings Statutory operang costs fell by £27.8m to £261.7m due to reduced volumes and key cost migaon acons that the Group has taken as a result of the pandemic. A key priority for the Group is maintaining quality journalism whilst ensuring the commercial viability and profitability of our brands into the future. To achieve this we connue to drive efficiencies which we expect to not adversely impact our products. The Group ghtly manages the cost base with cost savings delivered through natural migaon where volumes decline, day-to-day management intervenons and structural costs savings which permanently remove costs.

Labour costs were £109.0m (reducon of £12.7m versus 2019) with savings from ongoing cost acons and addionally from staﬀ going on furlough (beneﬁt of £4.5m) and pay reducons in Q2.

Newsprint costs were £23.3m (reducon of £16.9m versus 2019) with savings from reduced volumes. Price inﬂaonary pressures seen in recent years have eased more recently.

Depreciaon was £13.5m (increase of £2.5m versus 2019) as the Group recorded depreciaon on right-of-use assets recognised at the beginning of 2020 as result of the IFRS 16 'Leases' adopon.

Other costs were £115.9m (reducon of £0.7m versus 2019) driven by reducon in acvity and in discreonary spend as a result of the pandemic together with savings from ongoing cost acons and as a result of the IFRS 16 'Leases' adopon, substanvely oﬀset by the increase in adjusted items.

The total impact of the items excluded from adjusted operang costs was a charge of £25.5m (2019: £7.2m). Operang adjusted items comprise restructuring charges in respect of cost reducon measures of £3.0m (2019: £6.1m), a £5.0m (2019: nil) increase in the provision for dealing with and resolving civil claims in relaon to historical phone hacking, pension administrave expenses of £2.0m (2019: £1.1m) and a historic property development onerous contract charge of £15.5m (2019: nil).

The transformaon plans announced in July are reshaping the business into a streamlined, efficient organisaon with more focussed editorial, adversing and central operaons. Editorial have moved to a more centralised structure bringing together naonal and regional teams across print and digital to significantly increase efficiency and remove duplicaon while maintaining the strong editorial identy of our news brands. In adversing and central operaons, the Group has moved to fewer locaons and a simpler management structure, with costs geared to current market condions. These acons will deliver at least £35m in annualised savings going forward with an esmated restructuring charge of £20m in the second half of this year.

Statutory results The statutory operang proﬁt of £28.9m for the half year compares to a statutory operang proﬁt of £63.7m in the prior year being impacted by COVID-19 and provisions for historical maers (notes 8 and 15).

Statutory financing costs were £3.7m (2019: £5.5m) reflecng the reducon in the pension finance charge on a lower opening pension deficit.

The statutory tax charge of £27.6m (2019: £11.2m) comprises a current tax charge of £4.3m (2019: £10.8m) and a deferred tax charge of £23.3m (2019: £0.4m). The deferred tax charge includes a debit of £19.0m relang to the remeasurement of the deferred tax balances due to the reversal of the planned decrease in the corporaon tax rate from 19% to 17%.

Statutory loss after tax amounted to £2.4m compared to a proﬁt after tax of £47.0m and statutory loss per share for the period of 0.8 pence per share compares to a statutory earnings per share of 15.9 pence in the prior half year.

Adjusted results Adjusted operang profit declined by 23.0% to £54.9m. Adjusted operang margin decreased by 1.3 percentage points from 20.2% in the first half of 2019 to 18.9% in the first half of 2020.

The connued strong cash ﬂows generated by the business ensured that interest on bank borrowings was £0.6m, a decrease of £0.9m from the prior year due to repayment of term loan borrowings drawn to fund the acquision of Express & Star. The decrease of £0.9m more than oﬀset the interest on lease liability charge of £0.8m following the recognion of operang leases on the balance sheet from the beginning of the year as a result of the adopon of IFRS 16 'Leases'.

The adjusted tax charge of £10.3m (2019: £13.4m) represents 19.3% (2019: 19.2%) of adjusted proﬁt before tax. The rate is broadly in line with the statutory tax rate of 19.0%. Adjusted proﬁt after tax decreased by £13.3m or 23.5% to £43.2m and adjusted earnings per share decreased by 4.5 pence or 23.6% to 14.6 pence.

Reconciliaon of statutory to adjusted results

Operang Pension Statutory adjusted finance Adjusted results items charge Tax results £m £m £m £m £m Revenue 290.8 - - - 290.8 Operang profit 28.9 26.0 - - 54.9 Profit before tax 25.2 26.0 2.3 - 53.5 (Loss)/profit after tax (2.4) 24.7 1.9 19.0 43.2 Basic (loss)/earnings per share (p) (0.8) 8.4 0.6 6.4 14.6

The Group excludes from the adjusted results: operang adjusted items (note 5), pension finance charge (note 13) and tax changes arising from changes in the corporaon tax rate (note 8). Adjusng items relate to costs or incomes that derive from events or transacons that fall within the normal acvies of the Group, but are excluded from the Group's adjusted profit measures, individually or, if of a similar type in aggregate, due to their size and/or nature in order to beer reflect management's view of the performance of the Group.

Items are adjusted for where they relate to material items in the year (impairment, restructuring, disposals, tax rate changes) or relate to historic liabilies (historical legal and contract issues, defined benefit pension schemes which are all closed to future accrual). These include items which have occurred for a number of years and may connue in future years. Management exclude these from the results that it uses to manage the business and on which bonuses are based to reflect the underlying performance of the business and believes that the adjusted results, presented alongside the statutory results, provides users with addional useful informaon.

Restructuring charges incurred to deliver cost reducon measures relate to the transformaon of the business from print to digital, together with costs to deliver synergies. These costs are principally severance related, but may also include system integraon costs. They are included in adjusted items on the basis that they are material and can vary considerably each year, distorng the underlying performance of the business.

Provision for historical legal issues relates to the cost associated with dealing with and resolving civil claims for historical phone hacking and unlawful informaon gathering. This is included in adjusted items as the amounts are material, it relates to historical maers and movements in the provision can vary year to year.

Impairments to non-current assets arise following impairment reviews or where a decision is made to close or rere prinng assets. These non-cash items are included in adjusted items on the basis that they are material and vary considerably each year, distorng the underlying performance of the business.

The Group's defined benefit pension schemes are all closed to new members and to future accrual and are therefore not related to the current business. The pension administraon expenses and the pension finance charge are included in adjusted items as the amounts are significant and they relate to the historical pension commitment. Addionally, the charge in respect of Guaranteed Minimum Pension equalisaon was included in adjusted items last year as the amount was material and it related to the historical pension commitment.

The opening deferred tax posion is recalculated in the period in which a change in the standard rate of corporaon tax has been enacted or substanvely enacted by parliament. The impact of the change in rates are included in adjusted items on the basis that when they occur they are material, distorng the underlying performance of the business.

Other items may be included in adjusted items if they are material, such as transacon costs incurred on signiﬁcant acquisions or the proﬁt or loss on the sale of subsidiaries, associates or freehold buildings or liabilies arising from historical contract issues. They are included in adjusted items on the basis that they are material and can vary considerably each year, distorng the underlying performance of the business.

Balance Sheet

Strong cash generaon Net cash increased by £21.5m from £20.4m at the prior year end to a net cash posion of £41.9m at the half-year. Cash balances were £66.9m oﬀset by £25.0m drawings on the four-year £65m non-amorsing revolving credit facility which was drawn in March 2020. The drawdown was repaid in August 2020. The posive cash posion and strong liquidity reﬂects the Group's proacve steps to preserve cash during the COVID-19 outbreak.

IFRS 16 'Leases' implementaon The Group has implemented IFRS 16 with effect from 30 December 2019, the first day of the current accounng period, using the modified retrospecve approach to transion and has accordingly not restated prior periods. The impact of the implementaon has been to recognise the Group's previous operang lease commitments in respect of property and vehicles onto the balance sheet. This has resulted in a Right-of-use Asset being recognised on the balance sheet of £45.6m at 30 December 2019 represenng the lease liabilies of £48.6m less £3.0m of prepaid and accrued lease related balances. Lease liabilies of £48.6m were also recognised on the balance sheet at 30 December 2019. As a result of applying IFRS 16 the Group has recognised depreciaon and interest costs, rather than rental expenses for its lease commitments. This has resulted in a £0.4m posive impact to adjusted and statutory operang profit and £0.4m negave impact on adjusted and statutory profit before tax. IFRS 16 has no impact on the consolidated cash flow statement apart from changing the classificaon of rental payments from operang to financing acvies. Further details of the impact of IFRS 16 and its implementaon are detailed in note 2.

Historical legal issues The provision has been increased by £5.0m at the half year to reﬂect an increase in the esmate of the cost of seling claims. At the period end, £25.2m of the provision remains outstanding and this represents the current best esmate of the amount required to sele the expected claims. There are three parts to the provision: known claims, potenal future claims and common court costs. The esmates are based on historical trends and experience of claims and costs. The provision is expected to be ulised over the next few years. The Group has recorded an increase in the provision in each of the last ﬁve years which highlights the challenges in making a best esmate. Certain cases and other maers relang to the issue are subject to court proceedings, the dynamics of which connue to evolve, and the outcome of those proceedings could have an impact on how much is required to sele the remaining claims and on the number of claims. It is not possible to provide a range of potenal outcomes in respect of this provision. Due to this uncertainty, a conngent liability has been highlighted in note 17.

Historical contract issues A charge of £15.5m has been made in the half year reflecng a historic property development onerous contract. In 2018 the Group sold part of its freehold property in Liverpool with total net proceeds of £6.6m resulng in an accounng profit of £2.3m being included in operang adjusted items. The Group also entered into a joint venture to develop the property into a hotel and retail/office space. As a result of COVID-19 the development has incurred significant me delays and cost overruns, with no certainty as to the amount that could be incurred on compleon of the development and insufficient contractual protecons based on the historical agreement. A new agreement has been reached with the joint venture party to limit the exposure to the Group to £15.5m. A one-off provision of £15.5m has been made in the half year results and the £15.5m was paid to the joint venture party in September 2020. The Group has no further exposure in respect of this development.

Decrease in accounng pension deficit The IAS 19 pension deficit in respect of the Group's six defined benefit pension schemes decreased by £34.3m to £261.6m (by £33.0m to £209.9m net of deferred tax). The reducon was driven by Group contribuons and strong asset returns being in excess of an unfavourable movement in financial assumpons driven by a decrease in the discount rate and an update to the scheme demographic assumpons following analysis undertaken by the actuaries to the schemes. The Group has taken actuarial advice and has updated the approach to determining the bond constuents for the determinaon of the discount rate which is explained in note 13. Changes in the accounng pension deficit do not have an immediate impact on the agreed funding commitments. The next valuaon for funding of all six pension schemes as at 31 December 2019 is underway and this would usually be completed by 31 March 2021. The year end accounng will take into account the progress made on the valuaons as appropriate.

Group contribuons in respect of the defined benefit pension schemes in the first half were £22.0m (2019: £24.5m). As part of the key migaon acons resulng from the COVID-19, the Group agreed with the Trustees a deferment of its pension contribuons for April, May and June amounng to £12.2m. Of this amount 80% (£9.8m) was paid over to an escrow account and 20% (£2.4m) was retained in the business. The Group could have drawn on the amounts in escrow if certain condions were met up to 28 June 2020. None of the condions were met and the 80% was released to the pension schemes in July 2020. The amount in escrow at 28 June 2020 (£9.8m) has been included in pension contribuons and is reflected as a reducon in the pension deficit at the half year date. The 20% of the deferment (£2.4m) remained in cash at the half year balance sheet date. Following the connued strong liquidity, the remaining 20% was paid over to the schemes in September 2020.

Deferred consideraon Deferred consideraon in respect of the acquision of Express & Star is included in trade and other payables. Payment of the first payment of £18.9m was made on 28 February 2020. Of the remaining amount of £40.1m, £16.0m is classified as current liabilies (payable on 28 February 2021) and £24.1m is classified as non-current liabilies (£17.1m on 28 February 2022 and £7.0m on 28 February 2023).

Cash Flow Connued good cash generaon Cash generated from operaons on a statutory basis were £78.2m (2019: £70.4m). Working capital movements were posive as the Group collected the year end debtors which are higher than the debtors at the end of June which are impacted by the reduced revenues. This also includes a £5.2m beneﬁt from the adopon of IFRS 16 'Leases' where operang lease payments are now shown in ﬁnancing acvies (but has no impact on the change in cash and cash equivalents).

The Group presents an adjusted cash flow which reconciles the adjusted operang profit to the net change in cash and cash equivalents. Set out in note 20 is the reconciliaon between the statutory and the adjusted cash flow. The adjusted operang cash flow was £63.5m (2019: £65.2m) which is before historical legal issues payments (£0.9m), pension funding payments (£22.0m comprising £12.2m paid to the schemes in Q1 and £9.8m paid into escrow in Q2), deferred consideraon payments (£18.9m) and addional purchase of shares in PA Media Group (£0.2m).

Dividends

After due consideraon on 26 March 2020, the Board announced that it would no longer propose a ﬁnal dividend for the ﬁnancial year ending 2019. While the Board recognises the importance of dividends to shareholders, given the uncertainty around the COVID-19 crisis and the fact that the Group accessed the Government's Job Protecon scheme, it was decided that it would be inappropriate to pay a dividend at that me.

While an interim dividend of 2.50p was paid in 2019, cash dividends remain suspended due to COVID-19 uncertainty. With the Group currently performing materially ahead of market expectaons for 2020, the Board is recommending a proposed bonus issue to shareholders, in lieu of and with a value equivalent to, an interim dividend of 2.63p, subject to shareholder approval. The Board intends to resume cash dividends at an appropriate me, subject to market condions.

Other Items

Principal risks and uncertaines The Group recognises the importance of the effecve understanding and management of risk in enabling us to idenfy factors, both external and internal that may materially affect our ability to achieve our goals. There is an ongoing process for the idenficaon, evaluaon and management of the principal risks faced by the Group, including emerging risks. Appropriate migang acons are in place to minimise the impact of the risks and uncertaines which are idenfied as part of the risk process. All risks are considered in the context of the changing regulatory and compliance landscape, and enabling the connuity of our operaons.

These principal risks and uncertaines, the risk appete in relaon to these and the resulng acons are set out in the Reach plc 2019 Annual Report which is available on our website at www.reachplc.com.

The principal risks and uncertaines connue to be: Print revenue decline acceleraon; Insuﬃcient digital revenue growth; Lack of funding capability; Inability to recruit and retain talent; Customer data management challenges; Brand reputaon damage; Cyber security breach; Health and safety issue; Supply chain failure and Macro-economic deterioraon.

A number of the principal risks and uncertaines have been impacted by COVID-19. The Group took a number of migang acons to minimise the impact of the outbreak, including the announcement in April to cancel the 2019 dividend, reduce salaries, furlough staﬀ and agree a deferment of pension contribuons and in July to transform the business and accelerate the customer value strategy and will connue to monitor this risk closely. The impact on the Group's revenues has gradually improved since April and we have accelerated our customer value strategy. There remains uncertainty around when circulaon and adversing revenues will return to more normalised levels. COVID-19 sll represents a signiﬁcant macro-economic challenge to the UK economy, with the potenal for subsequent negave impacts on the business.

There also remains uncertainty around the UK's exit from the European Union. In 2019, the Group undertook exercise to evaluate the potenal impact and a number of migang acons can be taken in the event of, for example, larger than expected revenue declines, operaonal supply chain challenges or legislave changes. As the impact of the UK's exit from the European Union becomes clearer, we will connue to evolve our response to migate any impacts.

We have a strong record of delivering addional cost savings when faced with unexpected revenue deﬁcits.

Going concern statement The directors assessed the Group's prospects, both as a going concern and its longer term viability, at the me of approval of the Group's 2019 Annual Report. Further informaon is set out in the Group's 2019 Annual Report.

At the half year, the directors have reviewed the assessment, parcularly as a result of the COVID-19 outbreak. The Group has faced reducons in revenue ahead of the declines expected but the Group has taken a number of migang acons to protect proﬁts and cash ﬂow. The Group has a strong balance sheet and liquidity with a net cash posive posion of £41.9m. This represents a cash balance of £66.9m less £25.0m which has been drawn from the Group's revolving credit facility of £65.0m.

Accordingly, the directors have adopted the going concern basis of accounng in the preparaon of the Group's half-yearly ﬁnancial report.

Statement of directors' responsibilies The directors are responsible for preparing the half-yearly ﬁnancial report in accordance with applicable laws and regulaons. The directors conﬁrm to the best of their knowledge:

a) that the interim condensed consolidated ﬁnancial statements have been prepared in accordance with Internaonal Accounng Standard 34, 'Interim Financial Reporng', as adopted by the European Union and that the interim management report includes a fair review of the informaon required by DTR 4.2.7 and DTR 4.2.8 namely:

i. an indicaon of important events that have occurred during the first six months and their impact on the interim condensed consolidated financial statements, and a descripon of the principal risks and uncertaines for the remaining six months of the financial year; and

ii. material related-party transacons in the ﬁrst six months and any material changes in the related-party transacons described in the last annual report.

b) the interim condensed consolidated financial statements prepared in accordance with Internaonal Financial Reporng Standards as adopted by the European Union, give a true and fair view of the assets, liabilies, financial posion and profit and loss of the Company and the undertakings included in the consolidaon taken as a whole.

By order of the Board of Directors

Simon Fuller Chief Financial Oﬃcer 28 September 2020

Condensed interim consolidated ﬁnancial statements Consolidated income statement for the 26 weeks ended 28 June 2020 (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019)

Adjusted Adjusted Adjusted Adjusted Items Statutory Adjusted Items Statutory Adjusted Items Statutory 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 26 weeks 52 weeks 52 weeks 52 weeks notes ended ended ended ended ended ended ended ended ended 28 June 28 June 28 June 30 June 30 June 30 June 29 29 29 2020 2020 2020 2019 2019 2019 December December December (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) 2019 2019 2019 £m £m £m £m £m £m (audited) (audited) (audited) £m £m £m

Revenue 4 290.8 - 290.8 352.6 - 352.6 702.5 - 702.5 Cost of sales (153.9) - (153.9) (191.7) - (191.7) (370.7) - (370.7) Gross proﬁt 136.9 - 136.9 160.9 - 160.9 331.8 - 331.8 Distribuon - costs (23.5) - (23.5) (27.6) (27.6) (53.0) - (53.0) Administrave (7.2) expenses (58.8) (25.5) (84.3) (63.0) (70.2) (127.2) (27.3) (154.5) Share of (0.4) results of associates 0.3 (0.5) (0.2) 1.0 0.6 1.8 5.6 7.4

Operang (7.6) proﬁt 54.9 (26.0) 28.9 71.3 63.7 153.4 (21.7) 131.7 Interest - income 6 - - - 0.1 0.1 0.1 - 0.1 Pension (4.1) ﬁnance charge 13 - (2.3) (2.3) - (4.1) - (8.0) (8.0) Finance costs 7 (1.4) - (1.4) (1.5) - (1.5) (2.9) - (2.9)

Proﬁt before (11.7) tax 53.5 (28.3) 25.2 69.9 58.2 150.6 (29.7) 120.9 Tax charge 8 (10.3) (17.3) (27.6) (13.4) 2.2 (11.2) (28.9) 2.3 (26.6)

Proﬁt/(loss) for the period aributable to equity holders of the parent 43.2 (45.6) (2.4) 56.5 (9.5) 47.0 121.7 (27.4) 94.3

Earnings per 2020 2020 2019 2019 2019 2019 share notes Pence Pence Pence Pence Pence Pence Earnings/(loss) per share - basic 10 14.6 (0.8) 19.1 15.9 41.1 31.8 Earnings/(loss) per share - diluted 10 14.4 (0.8) 19.0 15.8 40.6 31.5

The above results were derived from connuing operaons. Set out in note 18 is the reconciliaon between the statutory and adjusted results.

The Group has applied the IFRS 16 'Leases' at 30 December 2019 using the modiﬁed retrospecve approach. Under this approach, comparave informaon is not restated and the cumulave eﬀect of applying IFRS 16 is recognised in Retained earnings and other reserves at the date of inial applicaon (see note 2).

Consolidated statement of comprehensive income

for the 26 weeks ended 28 June 2020 (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019)

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 notes (unaudited) (unaudited) (audited) £m £m £m

(Loss)/proﬁt for the period (2.4) 47.0 94.3

Items that will not be reclassified to profit and loss: Actuarial gain/(loss) on defined benefit pension schemes 13 16.6 (18.9) 14.7 Tax on actuarial gain/(loss) on defined benefit pension schemes 8 (3.1) 3.2 (2.8) Deferred tax credit resulng from change in tax rate 8 5.9 - - Share of items recognised by associates - - (11.2) Other comprehensive income/(loss) for the period 19.4 (15.7) 0.7

Total comprehensive income for the period 17.0 31.3 95.0

The Group has applied IFRS 16 'Leases' at 30 December 2019 using the modiﬁed retrospecve approach. Under this approach, comparave informaon is not restated and the cumulave eﬀect of applying IFRS 16 is recognised in Retained earnings and other reserves at the date of inial applicaon (see note 2).

Consolidated cash ﬂow statement for the 26 weeks ended 28 June 2020 (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019)

26 weeks 26 weeks ended 52 weeks ended ended 30 June 29 December 28 June 2019 2019 2020 (unaudited) (audited) (unaudited) £m £m notes £m

Cash flows from operang acvies Cash generated from operaons 11 78.2 70.4 147.4 Pension deficit funding payments 13 (22.0) (24.5) (48.9) Income tax paid (8.3) (3.8) (11.7) Net cash inflow from operang acvies 47.9 42.1 86.8 Invesng acvies Interest received - 0.1 0.1 Dividends received from associated undertakings - 0.1 0.5 Proceeds on disposal of property, plant and equipment 0.3 - 0.5 Purchases of property, plant and equipment (1.8) (1.6) (3.9) Acquision of subsidiary undertaking (18.9) - - Acquision of associate undertaking (0.2) - (0.9) Net cash used in invesng acvies (20.6) (1.4) (3.7) Financing acvies Dividends paid - (11.2) (18.6) Interest paid on borrowings (0.6) (1.6) (3.3) Drawdown/(repayment of) bank borrowings 25.0 (20.3) (60.0) Repayments of obligaons under leases (5.2) - - Net cash received from/(used in) financing acvies 19.2 (33.1) (81.9)

Net increase in cash and cash equivalents 46.5 7.6 1.2

Cash and cash equivalents at the beginning of the period 14 20.4 19.2 19.2

Cash and cash equivalents at the end of the period 14 66.9 26.8 20.4

The Group has applied IFRS 16 'Leases' at 30 December 2019 using the modiﬁed retrospecve approach. Under this approach, comparave informaon is not restated and the cumulave eﬀect of applying IFRS 16 is recognised in Retained earnings and reserves at the date of inial applicaon (see note 2).

Consolidated statement of changes in equity for the 26 weeks ended 28 June 2020 (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019)

Retained Share Capital earnings and Share premium Merger redempon other capital account reserve reserve reserves Total £m £m £m £m £m £m

At 29 December 2019 (audited) (30.9) (606.7) (17.4) (4.4) 24.2 (635.2) Loss for the period - - - - 2.4 2.4 Other comprehensive income for the period - - - - (19.4) (19.4)

Total comprehensive income for the period - - - - (17.0) (17.0)

Credit to equity for equity-seled share-based payments - - - - (0.6) (0.6)

At 28 June 2020 (unaudited) (30.9) (606.7) (17.4) (4.4) 6.6 (652.8)

At 30 December 2018 (audited) (30.9) (606.7) (17.4) (4.4) 101.7 (557.7) Proﬁt for the period - - - - (47.0) (47.0) Other comprehensive loss for the period - - - - 15.7 15.7

Total comprehensive income for the period - - - - (31.3) (31.3)

Credit to equity for equity-seled share-based payments - - - - (0.4) (0.4)

Dividends paid - - - - 11.2 11.2

At 30 June 2019 (unaudited) (30.9) (606.7) (17.4) (4.4) 81.2 (578.2)

At 30 December 2018 (audited) (30.9) (606.7) (17.4) (4.4) 101.7 (557.7) Proﬁt for the period - - - - (94.3) (94.3) Other comprehensive income for the period - - - - (0.7) (0.7)

Total comprehensive loss for the period - - - - (95.0) (95.0)

Credit to equity for equity-seled share-based payments - - - - (1.1) (1.1) Dividends paid - - - - 18.6 18.6

At 29 December 2019 (audited) (30.9) (606.7) (17.4) (4.4) 24.2 (635.2)

The Group has applied IFRS 16 'Leases' at 30 December 2019 using the modiﬁed retrospecve approach. Under this approach comparave informaon is not restated and the cumulave eﬀect of applying IFRS 16 is recognised in Retained earnings and reserves at the date of inial applicaon (see note 2).

Consolidated balance sheet at 28 June 2020 (at 30 June 2019 and 29 December 2019)

29 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) notes £m £m £m

Non-current assets

Goodwill 12 42.0 42.0 42.0 Other intangible assets 12 810.0 810.0 810.0 Property, plant and equipment 216.4 236.8 224.9 Right-of-use assets 42.6 - - Investment in associates 21.9 25.8 21.9 Rerement beneﬁt assets 13 74.6 19.8 31.2 Deferred tax assets 55.0 68.2 55.9 1,262.5 1,202.6 1,185.9 Current assets Inventories 5.1 6.1 5.9 Trade and other receivables 91.9 110.2 116.4 Cash and cash equivalents 14 66.9 26.8 20.4

163.9 143.1 142.7 Total assets 1,426.4 1,345.7 1,328.6 Non-current liabilies Trade and other payables (24.1) (40.1) (40.1) Borrowings - (39.7) - Lease liabilies (38.4) - - Rerement beneﬁt obligaons 13 (336.2) (368.0) (327.1) Deferred tax liabilies (178.9) (159.6) (159.3) Provisions 15 (17.5) (3.5) (20.5)

(595.1) (610.9) (547.0) Current liabilies Trade and other payables (107.8) (132.5) (122.2) Borrowings 14 (25.0) - - Lease liabilies 14 (6.4) - - Current tax liabilies 8 (4.7) (7.2) (8.7) Provisions 15 (34.6) (16.9) (15.5)

(178.5) (156.6) (146.4) Total liabilies (773.6) (767.5) (693.4) Net assets 652.8 578.2 635.2

Equity Share capital 16 (30.9) (30.9) (30.9) Share premium account 16 (606.7) (606.7) (606.7) Merger reserve 16 (17.4) (17.4) (17.4) Capital redempon reserve 16 (4.4) (4.4) (4.4) Retained earnings and other reserves 16 6.6 81.2 24.2

Total equity aributable to equity holders of the parent (652.8) (578.2) (635.2)

Notes to the consolidated ﬁnancial statements for the 26 weeks ended 28 June 2020 (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019)

1. General informaon

The financial informaon in respect of the 52 weeks ended 29 December 2019 does not constute statutory accounts within the meaning of Secon 434 of the Companies Act 2006. A copy of the statutory accounts for that period has been delivered to the Registrar of Companies and is available at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP and on the Company's website at www.reachplc.com. The auditors' report was unqualified, did not include reference to any maers to which the auditors drew aenon by way of emphasis without qualifying the report and did not contain a statement under secon 498 (2) or (3) of the Companies Act 2006.

The ﬁnancial informaon for the 26 weeks ended 28 June 2020 and the 26 weeks ended 30 June 2019 do not constute statutory accounts within the meaning of Secon 434 of the Companies Act 2006 and have not been audited. No statutory accounts for these periods have been delivered to the Registrar of Companies.

This half-yearly ﬁnancial report constutes a disseminaon announcement in accordance with Secon 6.3 of the Disclosure and Transparency Rules.

The auditors, PricewaterhouseCoopers LLP, have carried out a review of the condensed set of ﬁnancial statements and their report is set out at the end of this announcement.

The half-yearly ﬁnancial report was approved by the directors on 28 September 2020. This announcement is available at the Company's registered oﬃce at One Canada Square, Canary Wharf, London E14 5AP and on the Company's website at www.reachplc.com.

2. Accounng policies

Basis of preparaon

The Group's annual consolidated financial statements are prepared in accordance with IFRS as adopted by the European Union. The condensed consolidated financial statements included in this half-yearly financial report have been prepared in accordance with IAS 34 'Interim Financial Reporng' as adopted by the European Union. Taxes on income in the interim period are accrued using the tax rate that would be applicable to expected total annual profit or loss.

Going concern

These condensed consolidated ﬁnancial statements have been prepared on a going concern basis as set out in the Financial Review in this half-yearly ﬁnancial report.

Changes in accounng policy

Other than the adopon of IFRS 16 'Leases' the same accounng policies, presentaon and methods of computaon are followed in the interim condensed consolidated ﬁnancial statements as applied in the Group's latest annual consolidated ﬁnancial statements.

IFRS 16 has been applied by the Group in the 26 weeks ending 28 June 2020 and supersedes the current lease guidance including IAS 17 and the related interpretaon.

Nature of change IFRS 16 sets out the principles for the recognion, measurement, presentaon and disclosure of leases and requires lessees to account for all leases under a single on balance sheet model as the disncon between operang and ﬁnance leases is removed. The only excepons are short-term and low-value leases. At the commencement date of a lease, a lessee will recognise a lease liability for the future lease payments and an asset represenng the right to use the underlying asset during the lease term (right- of-use asset). Lessees will be required to separately recognise the interest expense on the lease liability and the depreciaon expense on the right-of use asset.

Impact on the Group The standard has impacted the accounng for the Group's operang leases relang to leased properes and leased vehicles. The Group has applied the simpliﬁed transion approach (modiﬁed retrospecve approach) and recognised the lease liability on transion at the present value of the remaining lease payments, discounted using its incremental borrowing rate of 3.3% at the date of transion. On inial adopon, right-of-use assets have been measured at an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments. Lease incenves (e.g. rent-free periods) are recognised as part of the measurement of the right-of-use assets and lease liabilies, whereas under IAS 17, a lease incenve liability was recognised and amorsed as a rental expense on a straight-line basis. Short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense to the income statement.

Praccal Expedients applied on adopon In its inial applicaon of IFRS 16, the Group has used the following praccal expedients allowed by the standard: · Applied a single discount rate to a porolio of leases with similar characteriscs; · Relied on its assessment of whether a lease is onerous by applying IAS 37 immediately before the date of inial applicaon; · Not recognised leases whose lease term end within 12 months of the adopon date of 30 December 2019; · Excluded inial direct costs from the measurement of right-of-use assets at the date of inial applicaon; and · Used hindsight in determining the lease term if the contract contains opons to extend or terminate the lease.

The following table reconciles the minimum lease commitments for the 52 weeks ended 29 December 2019 to the amount of lease liabilies recognised on inial adopon at 30 December 2019. £m Operang lease commitment at 29 December 2019 as shown in the consolidated financial statements 52.2 Discount using the incremental borrowing rate (7.1) Discounted using the incremental borrowing rate 45.1 Less: short-term leases of one year or less from the date of applicaon (0.7) Add: adjustments as a result of a different treatment of terminaon opons 4.2 Lease liability recognised at 30 December 2019 (classified as current £6.3m and non-current £42.3m) 48.6

Impact on the primary statements Impact on the consolidated income statement As a result of applying IFRS 16, the Group has recognised depreciaon and interest costs, rather than rental expenses for leases that are within the scope of IFRS 16 and which were classified previously as operang leases. In the 26 weeks ended 28 June 2020, the Group recognised £3.5m of addional depreciaon charges and £0.8m of interest costs in respect of these leases instead of recognising the rental expense of £3.9m. This resulted in a £0.4m posive impact to adjusted and statutory operang profit and £0.4m negave impact on adjusted and statutory profit before tax.

Impact on consolidated cash flow statement As a result of applying IFRS 16, in the 26 weeks ended 28 June 2020, the Group has increased net cash flow from operang acvies by £5.2m and reduced its net cash from financing acvies by £5.2m.

Impact on consolidated balance sheet 29 December IFRS 16 29 December 2019 adjustment 2019 (audited) 2019 (unaudited) £m £m £m Non-current assets Goodwill 42.0 - 42.0 Other intangible assets 810.0 - 810.0 Property, plant and equipment 224.9 - 224.9 Right-of-use-asset - 45.61 45.6 Investment in associates 21.9 - 21.9 Rerement beneﬁt assets 31.2 - 31.2 Deferred tax assets 55.9 - 55.9 1,185.9 45.6 1,231.5 Current assets Inventories 5.9 - 5.9 Trade and other receivables 116.4 (0.6)2 115.8 Cash and cash equivalents 20.4 - 20.4

142.7 (0.6) 142.1 Total assets 1,328.6 45.0 1,373.6 Non-current liabilies Trade and other payables (40.1) - (40.1) Lease liabilies - (42.3)3 (42.3) Rerement beneﬁt obligaons (327.1) - (327.1) Deferred tax liabilies (159.3) - (159.3) Provisions (20.5) - (20.5) (547.0) (42.3) (589.3) Current liabilies Trade and other payables (122.2) 3.24 (119.0) Lease liabilies - (6.3)5 (6.3) Current tax liabilies (8.7) - (8.7) Provisions (15.5) 0.46 (15.1) (146.4) (2.7) (149.1) Total liabilies (693.4) (45.0) (738.4) Net assets 635.2 - 635.2

Total equity aributable to equity holders of the parent (635.2) - (635.2)

1 Right-of-use asset recognised represenng the right to use the asset over the lease term. 2 Adjustment mainly in respect of prepaid rent. 3 Non-current element of the lease liability recognised. 4 Adjustment in respect of accruals related to leases. 5 Current element of the lease liability recognised. 6 Adjustment in respect of the onerous lease provision.

Alternave performance measures

The Company presents the results on a statutory and adjusted basis and revenue trends on a statutory and like-for-like basis. The Company believes that the adjusted basis and like-for-like trends will provide investors with useful supplemental informaon about the financial performance of the Group, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key performance indicators used by management in operang the Group and making decisions. Although management believes the adjusted basis is important in evaluang the Group, they are not intended to be considered in isolaon or as a substute for, or as superior to, financial informaon on a statutory basis. The alternave performance measures are not recognised measures under IFRS and do not have standardised meanings prescribed by IFRS and may be different to those used by other companies, liming the usefulness for comparison purposes. Note 18 sets out the reconciliaon between the statutory and adjusted results. An adjusted cash flow is presented in note 19 which reconciles the adjusted operang profit to the net change in cash and cash equivalents. Set out in note 20 is the reconciliaon between the statutory and adjusted cash flow.

Adjusng items

Adjusng items relate to costs or incomes that derive from events or transacons that fall within the normal acvies of the Group, but are excluded from the Group's adjusted profit measures, individually or, if of a similar type in aggregate, due to their size and/or nature in order to beer reflect management's view of the performance of the Group. The adjusted profit measures are not recognised profit measures under IFRS and may not be directly comparable with adjusted profit measures used by other companies. Details of adjusng items are set out in notes 5 and 18.

Key sources of esmaon uncertainty

The key assumpons concerning the future and other key sources of esmaon uncertainty that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilies within the next ﬁnancial year, are discussed below:

Provisions (notes 8 and 15) There is uncertainty as to liabilies arising from the outcome or resoluon of the ongoing historical legal issues and in addion there is uncertainty as to the amount of expenditure that may be tax deducble and addional tax liabilies may fall due in relaon to earlier years. Provisions are measured at the best esmate of the expenditure required to sele the obligaon based on the assessment of the related facts and circumstances at each reporng date.

Rerement benefits (note 13) Actuarial assumpons adopted and external factors can significantly impact the surplus or deficit of defined benefit pension schemes. Valuaons for funding and accounng purposes are based on assumpons about future economic and demographic variables. These result in risk of a volale valuaon deficit and the risk that the ulmate cost of paying benefits is higher than the current assessed liability value. Advice is sourced from independent and qualified actuaries in selecng suitable assumpons at each reporng date.

Impairment review (note 12) There is uncertainty in the value-in-use calculaon. The most significant area of uncertainty relates to expected future cash flows for each cash-generang unit. Determining whether the carrying values of assets in a cash-generang unit are impaired requires an esmaon of the value in use of the cash-generang unit to which these have been allocated. The value-in-use calculaon requires the Group to esmate the future cash flows expected to arise from the cash-generang unit and a suitable discount rate in order to calculate present value. Projecons are based on both internal and external market informaon and reflect past experience. The discount rate reflects the weighted average cost of capital of the Group.

Crical judgements in applying the Group's accounng policies In the process of applying the Group's accounng policies, described above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements:

Indefinite life assumpon in respect of publishing rights and tles (note 12) There is judgement required in connuing to adopt an indefinite life assumpon in respect of publishing rights and tles. The directors consider publishing rights and tles (with a carrying amount of £810.0m) have indefinite economic lives due to the longevity of the brands and the ability to evolve them in an ever changing media landscape. At each reporng date management review the suitability of this assumpon.

Idenﬁcaon of cash-generang units (note 12) There is judgement required in determining the cash-generang unit relang to our Publishing brands. At each reporng date management review the interdependency of revenues across our porolio of Publishing brands to determine the appropriate cash-generang unit. The Group operates its Publishing brands such that a majority of the revenues are interdependent and revenue would be materially lower if brands operated in isolaon. As such, management do not consider that an impairment review at an individual brand level is appropriate or praccal. As the Group connues to centralise revenue generang funcons and has moved to a matrix operang structure over the past few years all of the individual brands in Publishing have increased revenue interdependency and are assessed for impairment as a single Publishing cash-generang unit.

3. Segments

The performance of the Group is presented as a single reporng segment as this is the basis of internal reports regularly reviewed by the Board and chief operang decision maker (execuve directors) to allocate resources and to assess performance. The Group's operaons are primarily located in the UK and the Group is not subject to signiﬁcant seasonality during the year.

4. Revenue

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Print 241.0 301.8 591.3

Circulaon 163.9 185.1 361.7 Adversing 53.1 78.0 152.5 Prinng 11.8 19.7 38.5 Other 12.2 19.0 38.6

Digital 48.2 48.7 107.0 Other 1.6 2.1 4.2

Total revenue 290.8 352.6 702.5

The Group's operaons are located primarily in the UK. The Group's revenue by locaon of customers is set out below:

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

UK and Republic of Ireland 290.3 351.8 700.9 Connental Europe 0.4 0.7 1.5 Rest of World 0.1 0.1 0.1

Total revenue 290.8 352.6 702.5

5. Operang adjusted items

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Pension administrave expenses (note 13) (2.0) (1.1) (2.9) Restructuring charges in respect of cost reducon measures (note 15) (3.0) (6.1) (10.7) Provision for historical legal issues (note 15) (5.0) - (11.0) Provision for historical property development (note 15) (15.5) - - Other (a) - - (2.7)

Operang adjusted items included in administrave expenses (25.5) (7.2) (27.3) Operang adjusted items included in share of results of associates (b) (0.5) (0.4) 5.6

Total operang adjusted items (26.0) (7.6) (21.7)

(a) Other in 2019 related to an impairment of prinng press in Salre which was mothballed.

(b) Group's share of operang adjusted items incurred by PA Group, Brand Events and the Independent Star in Ireland.

6. Interest income

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Interest income on bank deposits - 0.1 0.1

7. Finance costs

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Interest on bank overdrafts and borrowings (0.6) (1.5) (2.9)

Interest on lease liability (0.8) - - Finance costs (1.4) (1.5) (2.9)

8. Tax

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Corporaon tax charge for the period (4.3) (10.8) (15.9)

Current tax charge (4.3) (10.8) (15.9)

Deferred tax charge for the period (4.3) (0.4) (9.9) Deferred tax charge for rate change (19.0) - - Prior period adjustments - - (0.8)

Deferred tax charge (23.3) (0.4) (10.7)

Tax charge (27.6) (11.2) (26.6)

Reconciliaon of tax charge % % %

Standard rate of corporaon tax (19.0) (19.0) (19.0) Tax effect of items that are not deducble in determining taxable profit (27.9) (0.4) (3.3) Change in rate of corporaon tax (62.5) - - Prior period adjustment - - (0.8) Tax effect of share of results of associates (0.1) 0.2 1.1

Tax charge rate (109.5) (19.2) (22.0)

The standard rate of corporaon tax for the period is 19% (2019: 19%). The tax eﬀect of items that are not deducble in determining taxable proﬁt includes certain costs where there is uncertainty as to their deducbility. The current tax liabilies amounted to £4.7m (26 weeks ended 30 June 2019: £7.2m and 52 weeks ended 29 December 2019: £8.7m) at the reporng date and include net provisions of £4.7m (26 weeks ended 30 June 2019: £1.1m and 52 weeks ended 29 December 2019: £2.7m). At the reporng date the maximum amount of the unprovided tax exposure relang to uncertain tax items is some £5m (26 weeks ended 30 June 2019: £7m and 52 weeks ended 29 December 2019: £5m).

The opening deferred tax posion is recalculated in the period in which a change in the standard rate of corporaon tax has been enacted or substanvely enacted by parliament. The reversal of the change in rate from 19% to 17% in 2020 has been accounted for in the current year resulng in a £19.0m debit in the consolidated income statement and a £5.9m credit in the consolidated statement of comprehensive income.

The tax on actuarial gains or losses on deﬁned beneﬁt pension schemes taken to the consolidated statement of comprehensive income is a deferred tax charge of £3.1m (26 weeks ended 30 June 2019: credit of £3.2m and 52 weeks ended 29 December 2019: charge of £2.8m).

9. Dividends

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019

(unaudited) (unaudited) (audited) Pence Pence Pence Per share Per share Per share Dividends paid per share and recognised as distribuons to equity holders in the period - 3.77 6.27

Dividend proposed per share but not paid nor included in the accounng records - 2.50 4.05

The ﬁnal dividend proposed for 2019 of 4.05 pence per share was withdrawn by the directors as a result of the COVID-19 outbreak.

On 10 May 2019 the ﬁnal dividend proposed for 2018 of 3.77 pence per share was approved by shareholders at the Annual General Meeng and was paid on 7 June 2019. An interim dividend for 2019 of 2.50 pence per share was paid on 27 September 2019. Total dividend payment in 2019 amounted to £18.6m (2018 ﬁnal dividend payment of £11.2m and 2019 interim dividend payment of £7.4m).

10. Earnings per share

Basic earnings per share is calculated by dividing proﬁt for the period aributable to equity holders of the parent by the weighted average number of ordinary shares during the period and diluted earnings per share is calculated by adjusng the weighted average number of ordinary shares in issue on the assumpon of conversion of all potenally diluve ordinary shares.

26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited)

Thousand Thousand Thousand

Weighted average number of ordinary shares for basic earnings per share 296,475 296,032 296,138 Eﬀect of potenal diluve ordinary shares in respect of share awards 3,596 1,798 3,457

Weighted average number of ordinary shares for diluted earnings per share 300,071 297,830 299,595

The weighted average number of potenally diluve ordinary shares not currently diluve was 5,354,112 (30 June 2019: 5,879,561 and 29 December 2019: 3,526,324).

Statutory earnings per share 2020 2019 2019 Pence Pence Pence

(Loss)/earnings per share - basic (0.8) 15.9 31.8 (Loss)/earnings per share - diluted (0.8) 15.8 31.5

Adjusted earnings per share 2020 2019 2019 Pence Pence Pence

Earnings per share - basic 14.6 19.1 41.1 Earnings per share - diluted 14.4 19.0 40.6

Set out in note 18 is the reconciliaon between the statutory and adjusted results.

11. Cash generated from operaons 26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Operang profit 28.9 63.7 131.7 Depreciaon of property, plant and equipment 13.5 11.0 21.5 Share of results of associates 0.2 (0.6) (7.4) Charge for share-based payments 0.7 0.4 1.1 Profit on disposal of land and buildings - - 0.3 Impairment of fixed assets - - 2.7 Write-off of fixed assets - - 0.2 Pension administrave expenses 2.0 1.1 2.9 Operang cash flows before movements in working capital 45.3 75.6 153.0 Decrease in inventories 0.8 0.2 0.4 Decrease/(increase) in receivables 23.7 (1.8) (7.8) Increase/(decrease) in payables 8.4 (3.6) 1.8 Cash generated from operaons 78.2 70.4 147.4

12. Goodwill and other intangible assets

The carrying value of goodwill and other intangible assets is:

Publishing Total rights and Intangible Goodwill tles assets £m £m £m

Opening carrying value 42.0 810.0 852.0

Closing carrying value 42.0 810.0 852.0

The Group has two cash-generang units (Publishing and Digital Classiﬁed Recruitment). Goodwill of £42.0m comprises Publishing £35.9m and Digital Classiﬁed Recruitment £6.1m. Publishing rights and tles comprises Publishing £810.0m.

There is judgement required in connuing to adopt an indefinite life assumpon in respect of publishing rights and tles. The directors consider publishing rights and tles (with a carrying amount of £810.0m) have indefinite economic lives due to the longevity of the brands and the ability to evolve them in an ever changing media landscape. The Group has grown digital revenue in recent years and is focused on invesng to connue the growth for the coming years. The directors believe growth from digital and new revenue streams will offset print declines on an aggregate basis, leading to a future stabilisaon of revenue. This, combined with our inbuilt and relentless focus on maximising efficiency, gives the Board confidence that the delivery of sustainable growth in revenue, profit and cash flow is achievable in the future.

There is judgement required in determining the cash-generang units. At each reporng date management review the interdependency of revenues across our Publishing brands to determine the appropriate cash-generang unit. The Group operates its Publishing brands such that a majority of the revenues are interdependent and revenue would be materially lower if brands operated in isolaon. As such, management do not consider that an impairment review at an individual brand level is appropriate or praccal. As the Group connues to centralise revenue generang funcons and has moved to a matrix operang structure over the past few years all of the individual brands in Publishing have increased revenue interdependency and are assessed for impairment as a single Publishing cash-generang unit.

The Group tests the carrying value of assets at the cash-generang unit level for impairment annually or more frequently if there are indicators that assets might be impaired. The review is undertaken by assessing whether the carrying value of assets is supported by their value in use which is calculated as the net present value of future cash flows derived from those assets, using cash flow projecons. If an impairment charge is required this is allocated first to reduce the carrying amount of any goodwill allocated to the cash-generang unit and then to the other assets of the cash-generang unit but subject to not reducing any asset below its recoverable amount.

The impact on revenues due to COVID-19 is a triggering event which requires an impairment review to be performed at the half year. The impairment review concluded that no impairment charge was required.

For the 2020 half year impairment review of the cash-generang units, the Group prepared cash flow projecons using the latest forecasts and projecons. The forecasts for 2020 and 2021 are internal projecons based on the impact of COVID-19 on the revenues and the associated reducon in costs as a result of the revenue declines. Projecons for a further nine years have been prepared as this is the period over which the transformaon to digital can be assessed. The projecons are extrapolated based on esmated growth rates which do not exceed the average long-term growth rates for the relevant markets. The long-term growth rates beyond the 10-year period have been assessed at 0% based on the Board's view of the market posion and maturity of the relevant market. We connue to believe that there are significant longer term benefits of our scale naonal and local digital audiences and there are opportunies to grow revenue and profit in the longer term.

The discount rate reﬂects the weighted average cost of capital of the Group. The current post-tax and equivalent pre-tax discount rate used in respect of all cash-generang units is 11.1% and 13.7% respecvely.

The impairment review is highly sensive to reasonably possible changes in key assumpons used in the value-in-use calculaons. There is increased uncertainty due to COVID-19. For the Publishing cash-generang unit a combinaon of reasonably possible changes in key assumpons such as print revenue declining at a faster rate than projected, digital revenue growth being significantly lower than projected or the scale of cost saving iniaves being delivered being lower than forecast, could lead to an impairment in the Publishing cash-generang unit. If these sensivies led to an 11% reducon in cash flows in each of the years in the 10 year period this would lead to the removal of the headroom. Alternavely an increase in the discount rate by 1.4 percentage points would lead to the removal of the headroom. For the Digital Classified Recruitment cash-generang unit, a 23% reducon in cash flows in each of the years in the 10 year period this would lead to the removal of the headroom. Alternavely an increase in the discount rate by 3.5 percentage points would lead to the removal of the headroom.

13. Rerement beneﬁt schemes

Deﬁned contribuon pension schemes

The Group operates a deﬁned contribuon pension scheme for qualifying employees: The Reach Pension Plan (the "RPP"). The assets of the RPP scheme where employees have an individual account at Fidelity are held separately from those of the Group in funds under the control of Trustees.

The current service cost charged to the consolidated income statement for the period of £8.7m (26 weeks ended 30 June 2019: £8.6m and 52 weeks ended 29 December 2019: £17.7m) represents contribuons paid by the Group at rates speciﬁed in the scheme rules. All amounts that were due have been paid over to the schemes at all reporng dates.

Deﬁned beneﬁt pension schemes

Background

The defined benefit pension schemes operated by the Group are all closed to future accrual. The Group has six defined benefit pension schemes: · Trinity Mirror schemes (the 'TM Schemes'): the MGN Pension Scheme (the 'MGN Scheme'), the Trinity Rerement Benefit Scheme (the 'Trinity Scheme') and the Midland Independent Newspapers Pension Scheme (the 'MIN Scheme'); and · Express & Star schemes (the 'E&S Schemes'): the Express Newspapers 1988 Pension Fund (the 'EN88 Scheme'), the Express Newspapers Senior Management Pension Fund (the 'ENSM Scheme') and the West Ferry Printers Pension Scheme (the 'WF Scheme').

Characteriscs

The defined benefit pension schemes provide pensions to members, which are based on the final salary pension payable, normally from age 65 (although some schemes have some pensions normally payable from an earlier age) plus surviving spouses or dependants benefits following a member's death. Benefits increase both before and after rerement either in line with statutory minimum requirements or in accordance with the scheme rules if greater. Such increases are either at fixed rates or in line with retail or consumer prices but subject to upper and lower limits. All of the schemes are independent of the Group with assets held independently of the Group. They are governed by Trustees who administer benefits in accordance with the scheme rules and appropriate UK legislaon. The schemes each have a professional or experienced independent trustee as their chairman with generally half of the remaining Trustees nominated by the members and half by the Group.

Maturity proﬁle and cash ﬂow

Across all of the schemes at the reporng date, the uninsured liabilies related 60% to current pensioners and their spouses or dependants and 40% related to deferred pensioners. The average term from the reporng date to payment of the remaining uninsured beneﬁts is expected to be around 16 years. Uninsured pension payments in 2019, excluding lump sums and transfer value payments, were £70m and from the end of 2019 were projected to rise to an annual peak in 2031 of £99m and reducing thereafter.

Funding arrangements

The funding of the Group's schemes is subject to UK pension legislaon as well as the guidance and codes of pracce issued by the Pensions Regulator. Funding targets are agreed between the Trustees and the Group and are reviewed and revised usually every three years. The funding targets must include a margin for prudence above the expected cost of paying the benefits and so are different to the liability value for IAS 19 purposes. The funding deficits revealed by these triennial valuaons are removed over me in accordance with an agreed recovery plan and schedule of contribuons for each scheme.

The funding valuaons of the schemes: at 31 December 2016 for the MGN Scheme showed a deficit of £476.0m, for the Trinity Scheme showed a deficit of £78.0m and for the MIN Scheme showed a deficit of £68.2m; at 5 April 2017 for the EN88 Scheme showed a deficit of £69.8m and for the ENSM Scheme showed a deficit of £3.2m; and at 31 December 2017 for the WF Scheme showed a deficit of £6.5m. The next valuaon for funding of all six defined benefit pension schemes as at 31 December 2019 is ongoing and would usually be completed by 31 March 2021. There is no direct link to the IAS 19 valuaons which use different actuarial assumpon derivaon methodologies (although a number of assumpons are consistent) and are updated at each reporng date.

At the prior year end, the deficits in all schemes were expected to be removed before or in 2027 by a combinaon of the contribuons and asset returns. Contribuons (which include funding for pensions administrave expenses) are payable monthly. Contribuons per the current schedule of contribuons are for £48.9m in 2020, £56.1m per annum in 2021 to 2023, £55.3m per annum in 2024 to 2026 and £53.3m in 2027. Group contribuons to the defined benefit pension schemes in the first half were £22.0m (2019: £24.5m). As part of the key migaon acons resulng from the COVID-19, the Group agreed with the Trustees a deferment of its pension contribuons for April, May and June amounng to £12.2m. Of this amount 80% (£9.8m) was paid over to an escrow account and 20% (£2.4m) was retained in the business. The Group could have drawn on the amounts in escrow if certain condions were met up to 28 June 2020. None of the condions were met and the 80% was released to the pension schemes in July 2020. The amount in escrow at 28 June 2020 (£9.8m) has been included in pension contribuons and is reflected as a reducon in the pension deficit at the half year date. The 20% of the deferment (£2.4m) remained in cash at the half year balance sheet date. Following the connued strong liquidity, the remaining 20% was paid over to the schemes in September 2020.

The Group has agreed that in respect of dividend payments in 2018, 2019 and 2020 that addional contribuons would be paid at 75% of the excess if dividends paid in 2018 were above 6.16 pence per share. For 2019 and 2020 the threshold increases in line with the increase in dividends capped at 10% per annum.

The future deficit funding commitments are linked to the three-yearly actuarial valuaons. Although the funding commitments do not generally impact the IAS 19 posion, IFRIC 14 guides companies to consider for IAS 19 disclosures whether any surplus can be recognised as a balance sheet asset and whether any future funding commitments in excess of the IAS 19 liability should be provisioned for. Based on the interpretaon of the rules for each of the defined benefit pension schemes, the Group considers that it has an uncondional right to any potenal surplus on the ulmate wind-up after all benefits to members have been paid of all of the schemes except the WF Scheme. Under IFRIC 14 it is therefore appropriate to recognise any IAS 19 surpluses which may emerge in future and not to recognise any potenal addional liabilies in respect of future funding commitments of all of the schemes except for the WF Scheme. For the WF Scheme at the reporng date, the assets are surplus to the IAS 19 benefit liabilies. However, to allow for IFRIC 14, the Group recognises a deficit of the value of its future deficit contribuon commitment to the scheme in line with the schedule of contribuons in force at the reporng date.

The calculaon of Guaranteed Minimum Pension ('GMP') is set out in legislaon and members of pension schemes that were contracted out of the State Earnings-Related Pension Scheme ('SERPS') between 6 April 1978 and 5 April 1997 will have built up an entlement to a GMP. GMPs were intended to broadly replicate the SERPS pension benefits but due to their design they give rise to inequalies between men and women, in parcular, the GMP for a male comes into payment at age 65 whereas for a female it comes into payment at the age of 60 and GMPs typically receive different levels of increase to non GMP benefits. On 26 October 2018, the High Court handed down its judgement in the Lloyds Trustees vs Lloyds Bank plc and Others case relang to the equalisaon of member benefits for the gender effects of GMP equalisaon. This judgement creates a precedent for other UK defined benefit schemes with GMPs. The judgement confirmed that GMP equalisaon was required for the period 17 May 1990 to 5 April 1997 and provided some clarificaon on legally acceptable methods for achieving equalisaon. An allowance for GMP equalisaon was first included within liabilies at 30 December 2018 and was recognised as a charge for past service costs in the income statement. The esmate is subject to change as we undertake more detailed member calculaons and/or as a result of future legal judgements. There have been no significant developments since then with further guidance expected in the remainder of 2020 or 2021.

Risks

Valuaons for funding and accounng purposes are based on assumpons about future economic and demographic variables. This results in risk of a volale valuaon deﬁcit and the risk that the ulmate cost of paying beneﬁts is higher than the current assessed liability value.

The main sources of risk are: · Investment risk: a reducon in asset returns (or assumed future asset returns); · Inﬂaon risk: an increase in beneﬁt increases (or assumed future increases); and · Longevity risk: an increase in average life spans (or assumed life expectancy).

These risks are managed by: · Invesng in insured annuity policies: the income from these policies exactly matches the benefit payments for the members covered, removing all of the above risks. At the reporng date the insured annuity policies covered 12% of total liabilies; · Invesng a proporon of assets in other classes such as government and corporate bonds and in liability driven investments: changes in the values of the assets aim to broadly match changes in the values of the uninsured liabilies, reducing the investment risk, however some risk remains as the duraons of the bonds are typically shorter than that of the liabilies and so the values may sll move differently. At the reporng date non-equity assets amounted to 84% of assets excluding the insured annuity policies; · Invesng a proporon of assets in equies: with the aim of achieving outperformance and so reducing the deficits over the long term. At the reporng date this amounted to 16% of assets excluding the insured annuity policies; and · The gradual sale of equies over me to purchase addional annuity policies or liability matching investments: to further reduce risk as the schemes, which are closed to future accrual, mature.

Pension scheme accounng deﬁcits are snapshots at moments in me and are not used by either the Group or Trustees to frame funding policy. The Group and Trustees are aligned in focusing on the long-term sustainability of the funding policy which aims to balance the interests of the Group's shareholders and members of the schemes. The Group and Trustees are also aligned in reducing pensions risk over the long term and at a pace which is aﬀordable to the Group.

The E&S Schemes and the Trinity Scheme have an accounng surplus at the reporng date. For the WF Scheme this is before allowing for the IFRIC 14 asset ceiling. Across the MGN Scheme and MIN Scheme, at the 2019 year end the invested assets were expected to be sufficient to pay the uninsured benefits due up to 2044, based on the 2019 year end assumpons. The remaining uninsured benefit payments, payable from 2045, are due to be funded by a combinaon of asset outperformance and the deficit contribuons currently scheduled to be paid up to 2027. For the MGN and MIN Schemes, actuarial projecons at the year-end reporng date show removal of the combined accounng deficit by the end of 2025 due to scheduled contribuons and asset returns at the current target rate. From this point, the assets are projected to be sufficient to fully fund the liabilies on the accounng basis. The Group is not exposed to any unusual, enty specific or scheme specific risks. Other than the impact of GMP equalisaon, there were no plan amendments, selements or curtailments in 2020 or 2019 which resulted in a pension cost.

Results

For the purposes of the Group's consolidated ﬁnancial statements, valuaons have been performed in accordance with the requirements of IAS 19 with scheme liabilies calculated using a consistent projected unit valuaon method and compared to the esmated value of the scheme assets at 28 June 2020.

The assets and liabilies of the schemes as at the reporng date are: TM Schemes E&S Schemes Total £m £m £m

Present value of uninsured scheme liabilies (1,907.1) (540.7) (2,447.8) Present value of insured scheme liabilies (170.8) (148.1) (318.9) Total present value of scheme liabilies (2,077.9) (688.8) (2,766.7) Invested and cash assets at fair value 1,599.8 622.6 2,222.4 Value of liability matching insurance contracts 170.8 148.1 318.9 Total fair value of scheme assets 1,770.6 770.7 2,541.3 Funded (deﬁcit)/surplus (307.3) 81.9 (225.4) Impact of IFRIC 14 - (36.2) (36.2) Net scheme (deﬁcit)/surplus (307.3) 45.7 (261.6)

Based on actuarial advice, the assumpons used in calculang the scheme liabilies and the actuarial value of those liabilies are:

28 June 30 June 28 December 2020 2019 2019 £m £m £m

Financial assumpons (nominal % pa) Discount rate 1.66 2.25 1.94 Retail price inﬂaon rate 2.82 3.21 2.96 Consumer price inﬂaon rate 1.97 2.21 2.01 Rate of pension increase in deferment 2.11 2.38 2.17 Rate of pension increases in payment (weighted average across the scheme's) 3.23 3.40 3.31

Mortality assumpons - future life expectancies from age 65 (years) Male currently aged 65 21.8 21.4 21.7 Female currently aged 65 24.1 23.3 24.0 Male currently aged 55 21.6 22.0 21.5 Female currently aged 55 24.1 24.1 24.0

The discount rate should be chosen to be equal to the yield available on "high quality" corporate bonds of appropriate term and currency. The yields available on corporate bonds generally fell in the first half by around 0.5% pa. The Group has taken actuarial advice and has updated the approach to determining the bond constuents for the determinaon of the discount rate. The bond constuents used for the 2020 interim disclosures have been taken from a new Bloomberg classificaon system which counteracted the fall in the discount rate by around 0.2% pa. The discount rate for 2019 was derived from classificaon informaon at an enty level provided by Bloomberg. Bloomberg have recently offered an alternave classificaon system called BCLASS, which provides classificaon informaon on each individual security and which Bloomberg describes as the "fixed income standard". BCLASS also enables the inclusion of bonds issued by corporate special purpose vehicles, thereby increasing the size of the universe used to determine the discount rate. Our actuaries have determined an appropriate market bond yield based on a BCLASS extract from Bloomberg which excludes securies labelled under the following categories treated as non-corporate: Treasury, Government- related, Securised, or Municipal. The RPI and CPI differenal has reduced from 0.95% to 0.85% to reflect actuarial advice that the expected future differenal has reduced following the Government's consultaon on amending RPI in the long term.

The esmated impact on the IAS 19 liabilies and on the IAS 19 deficit at the reporng date, due to a reasonably possible change in key assumpons over the next year, are set out in the table below: Effect on Effect on liabilies deficit £m £m Discount rate +/- 0.5% pa -210/+230 -190/+210 Retail price inflaon rate +/- 0.5% pa +43/-41 +31/-30 Consumer price inflaon rate +/- 0.5% pa +54/-51 +54/-51 Life expectancy at age 65 +/- 1 year +164/-160 +143/-140

The RPI sensivity impacts the rate of increases in deferment for some of the pensions in the EN88 Scheme and the ENSM Scheme and some of the pensions in payment for all schemes except the MGN Scheme. The CPI sensivity impacts the rate of increases in deferment for some of the pensions in most schemes and the rate of increases in payment for some of the pensions in payment for all schemes.

The effect on the deficit is usually lower than the effect on the liabilies due to the matching impact on the value of the insurance contracts held in respect of some of the liabilies. Each assumpon variaon represents a reasonably possible change in the assumpon over the next year but might not represent the actual effect because assumpon changes are unlikely to happen in isolaon.

The esmated impact of the assumpon variaons make no allowance for changes in the values of invested assets that would arise if market condions were to change in order to give rise to the assumpon variaon. If allowance were made, the esmated impact would likely be lower as the values of invested assets would normally change in the same direcons as the liability values.

The amount included in the consolidated income statement, consolidated statement of comprehensive income and consolidated balance sheet arising from the Group's obligaons in respect of its deﬁned beneﬁt pension schemes is as follows:

26 weeks 26 weeks 52 weeks Consolidated income statement ended ended ended

28 June 30 June 29 December

2020 2019 2019

(unaudited) (unaudited) (audited)

£m £m £m

Pension administrave expenses (2.0) (1.1) (2.9) Pension ﬁnance charge (2.3) (4.1) (8.0)

Deﬁned beneﬁt cost recognised in income statement (4.3) (5.2) (10.9)

Consolidated statement of comprehensive income 26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Actuarial gain due to liability experience 34.1 5.4 24.9 Actuarial loss due to liability assumpon changes (163.6) (216.9) (271.8) Total liability actuarial loss (129.5) (211.5) (246.9) Returns on scheme assets greater than discount rate 149.5 194.3 261.9 Change in impact of IFRIC 14 (3.4) (1.7) (0.3) Total gain/(loss) recognised in statement of comprehensive income 16.6 (18.9) 14.7

Consolidated balance sheet 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Present value of uninsured scheme liabilies (2,447.8) (2,328.8) (2,337.9) Present value of insured scheme liabilies (318.9) (327.8) (326.0) Total present value of scheme liabilies (2,766.7) (2,656.6) (2,663.9) Invested and cash assets at fair value 2,222.4 2,014.8 2,074.8 Value of liability matching insurance contracts 318.9 327.8 326.0 Total fair value of scheme assets 2,541.3 2,342.6 2,400.8 Funded deﬁcit (225.4) (314.0) (263.1) Impact of IFRIC 14 (36.2) (34.2) (32.8) Net scheme deﬁcit (261.6) (348.2) (295.9)

Non-current assets - rerement beneﬁt assets 74.6 19.8 31.2 Non-current liabilies - rerement beneﬁt obligaons (336.2) (368.0) (327.1)

Net scheme deﬁcit (261.6) (348.2) (295.9)

Net scheme deﬁcit included in consolidated balance sheet (261.6) (348.2) (295.9) Deferred tax included in consolidated balance sheet 51.7 63.4 53.0

Net scheme deﬁcit after deferred tax (209.9) (284.8) (242.9)

Movement in net scheme deﬁcit 26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Opening net scheme deﬁcit (295.9) (348.6) (348.6) Contribuons 22.0 24.5 48.9 Consolidated income statement (4.3) (5.2) (10.9) Consolidated statement of comprehensive income 16.6 (18.9) 14.7 Closing net scheme deﬁcit (261.6) (348.2) (295.9)

Changes in the present value of scheme liabilies 26 weeks 26 weeks 52 weeks ended ended ended 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Opening present value of scheme liabilies (2,663.9) (2,462.8) (2,462.8) Interest cost (25.3) (33.1) (66.3) Actuarial gain- experience 34.1 5.4 24.9 Actuarial (loss)/gain - change to demographic assumpons (64.3) 9.7 42.7 Actuarial loss - change to ﬁnancial assumpons (99.3) (226.6) (314.5) Beneﬁts paid 52.0 50.8 112.1 Closing present value of scheme liabilies (2,766.7) (2,656.6) (2,663.9)

26 weeks 26 weeks 52 weeks Changes in impact of IFRIC 14 ended ended ended

28 June 30 June 29 December

2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Opening impact of IFRIC 14 (32.8) (32.5) (32.5) Increase in impact of IFRIC 14 (3.4) (1.7) (0.3) Closing impact of IFRIC 14 (36.2) (34.2) (32.8)

26 weeks 26 weeks 52 weeks Changes in the fair value of scheme assets ended ended ended

28 June 30 June 29 December

2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

Opening fair value of scheme assets 2,400.8 2,146.7 2,146.7 Interest income 23.0 29.0 58.3 Actual return on assets greater than discount rate 149.5 194.3 261.9 Contribuons by employer 22.0 24.5 48.9 Beneﬁts paid (52.0) (50.8) (112.1) Administrave expenses (2.0) (1.1) (2.9) Closing fair value of scheme assets 2,541.3 2,342.6 2,400.8

Fair value of scheme assets 28 June 30 June 29 December 2020 2019 2019 (unaudited) (unaudited) (audited) £m £m £m

UK equies 43.5 40.6 49.2 US equies 134.6 122.5 128.6 Other overseas equies 184.4 272.1 191.1 Property 21.9 43.5 24.4 Corporate bonds 282.8 266.2 242.1 Fixed interest gilts 132.5 103.9 184.2 Index linked gilts 84.7 43.6 71.9 Liability driven investment 1,080.3 531.7 773.9 Cash and other 257.7 590.7 409.4

Invested and cash assets at fair value 2,222.4 2,014.8 2,074.8 Value of insurance contracts 318.9 327.8 326.0

Fair value of scheme assets 2,541.3 2,342.6 2,400.8

The majority of the scheme assets have quoted prices in acve markets. Scheme assets include neither direct investments in the Company's ordinary shares nor any property assets occupied nor other assets used by the Group.

14. Net cash

The net cash for the Group is as follows:

29 December IFRS 16 28 June 2019 Cash Loans opening IRFS 16 2020

(audited) ﬂow drawn adjustment movement (unaudited) £m £m £m £m £m £m

Current liabilies Revolving credit facility - - (25.0) - - (25.0)

Current assets Cash and cash equivalents 20.4 21.5 25.0 - - 66.9

Net cash (Under IAS 17) 20.4 21.5 - - - 41.9

Non-current liabilies Lease liabilies - - - (42.3) 3.9 (38.4)

Current liabilies Lease liabilies - - - (6.3) (0.1) (6.4)

Net (debt) (Under IFRS 16) 20.4 21.5 - (48.6) 3.8 (2.9)

The Group had drawings of £25m at the reporng date on the four year non-amorsing £65m revolving credit facility, which expires in December 2023 and is subject to four covenants: Net Worth, Interest Cover, Net Debt to EBITDA and Cash Flow all of which were met at the half year.

The Group has implemented IFRS 16 'Leases' with eﬀect from 30 December 2019 using the modiﬁed retrospecve approach to transion and has accordingly not restated prior periods. The impact of the implementaon has been to recognise the Group's previous operang lease commitments in relaon to properes and vehicles as lease liabilies on the balance sheet at the inial date of applicaon at 30 December 2019 (see note 2). Total lease liabilies at 28 June 2020 are £44.8m.

Acquision deferred consideraon Deferred consideraon in respect of the acquision of Express & Star is included in trade and other payables. Payment of the first payment of £18.9m was made on 28 February 2020. Of the remaining amount of £40.1m, £16.0m is classified as current liabilies (payable on 28 February 2021) and £24.1m is classified as non-current liabilies (£17.1m on 28 February 2022 and £7.0m on 28 February 2023). There are no condions aached to the payment of the deferred consideraon and the transacon was structured such that no interest accrues on these payments. However, under the sale and purchase agreement the Group has the right to offset agreed claims arising from a breach of warranes and indemnies and can also offset any shoralls on the contracted adversing from the Health Loery. The deferred consideraon has not been discounted as we do not believe that the impact of such discounng is material.

15. Provisions

Share-based Historical payments Property Restructuring legal issues Other Total £m £m £m £m £m £m

At 29 December 2019 (audited) (0.7) (5.7) (1.4) (21.1) (7.1) (36.0) IFRS 16 adjustment - 0.4 - - - 0.4 Released/(charged) to income statement 0.2 - (3.0) (5.0) (15.9) (23.7) Ulisaon of provision 0.1 0.8 3.9 0.9 1.5 7.2

At 28 June 2020 (unaudited) (0.4) (4.5) (0.5) (25.2) (21.5) (52.1)

The provisions have been analysed between current and non-current as follows:

28 June 30 June 29 December 2020 2019 2019

(unaudited) (unaudited) (audited) £m £m £m

Current (34.6) (16.9) (15.5) Non-current (17.5) (3.5) (20.5)

(52.1) (20.4) (36.0)

The share-based payments provision relates to Naonal Insurance obligaons aached to the future crystallisaon of awards. This provision will be ulised over the next three years.

The property provision relates to future commied costs related to occupied, let and vacant properes. A majority of the provision will be ulised over the next two years and reﬂects the remaining term of the leases or expected period of vacancy.

The restructuring provision relates to restructuring charges incurred in the delivery of cost reducon measures. This provision is expected to be ulised within the next year.

The historical legal issues provision relates to the cost associated with dealing with and resolving civil claims in relaon to historical phone hacking and unlawful informaon gathering. The provision has been increased by £5.0m at the half year to reﬂect an increase in the esmate of the cost of seling claims. At the period end, £25.2m of the provision remains outstanding and this represents the current best esmate of the amount required to sele the expected claims. There are three parts to the provision: known claims, potenal future claims and common court costs. The esmates are based on historical trends and experience of claims and costs. The provision is expected to be ulised over the next few years. The Group has recorded an increase in the provision in each of the last ﬁve years which highlights the challenges in making a best esmate. Certain cases and other maers relang to the issue are subject to court proceedings, the dynamics of which connue to evolve, and the outcome of those proceedings could have an impact on how much is required to sele the remaining claims and on the number of claims. It is not possible to provide a range of potenal outcomes in respect of this provision. Due to this uncertainty, a conngent liability has been highlighted in note 17.

Other provisions include a charge of £15.5m made in the half year reflecng a historic property development, which as a result of COVID-19 has become onerous. In 2018 the Group sold part of its freehold property in Liverpool with total net proceeds of £6.6m resulng in an accounng profit of £2.3m being included in operang adjusted items. The Group also entered into a joint venture to develop the property into a hotel and retail/office space. As a result of COVID-19 the development has incurred significant me delays and cost overruns, with no certainty as to the amount that could be incurred on compleon of the development and insufficient contractual protecons based on the historical agreement. A new agreement has been reached with the joint venture party to limit the exposure to the Group to £15.5m. A one-off provision of £15.5m has been made in the half year results and the £15.5m has been paid to the joint venture party. The Group has no further exposure in respect of this development. The remaining other provisions relates to libel and other maers and is expected to be ulised over the next two years.

16. Share capital and reserves

The share capital comprises 309,286,317 alloed, called-up and fully paid ordinary shares of 10p each. The Company holds 10,017,620 shares as Treasury shares. The share premium reﬂects the premium on issued ordinary shares. The merger reserve comprises the premium on the shares alloed in relaon to the acquision of Express & Star. The capital redempon reserve represents the nominal value of the shares purchased and subsequently cancelled under share buy-back programmes. Cumulave goodwill wrien oﬀ to retained earnings and other reserves in respect of connuing businesses acquired prior to 1998 is £25.9m (2019: £25.9m). On transion to IFRS, the revalued amounts of freehold properes were deemed to be the cost of the asset and the revaluaon reserve has been transferred to retained earnings and other reserves.

Shares purchased by the Reach Employee Beneﬁt Trust are included in retained earnings and other reserves at £2.8m (30 June 2019: £3.8m and 29 December 2019: £3.7m). During the period, 629,178 were released relang to grants made in prior years (26 weeks ended 30 June 2019: 425,946 and 52 weeks ended 29 December 2019: 522,572).

During the period, 1,218,530 awards were granted to Execuve Directors on a discreonary basis under the Long Term Incenve Plan (26 weeks ended 30 June 2019: 1,998,167 and 52 weeks ended 29 December 2019: 2,970,531). The exercise price of each award is £1. The awards vest after three years, subject to the connued employment of the parcipant and sasfacon of certain performance condions and are required to be held for a further two years.

During the period, 2,163,246 awards were granted to senior managers on a discreonary basis under the Senior Management Incenve Plan (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019: 2,593,910). The exercise price of each award is £1. The awards vest after three years, subject to the connued employment of the parcipant and sasfacon of certain performance condions.

During the period, 50,618 awards were granted to senior managers under the Restricted Share Plan (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019: 77,399). The awards vest after three years. During the period, 60,000 awards were granted to senior managers under the Senior Management Incenve Plan (26 weeks ended 30 June 2019 and 52 weeks ended 29 December 2019: nil). The awards vest after three years.

17. Conngent liabilies

There is the potenal for further liabilies to arise from the outcome or resoluon of the ongoing historical legal issues (note 15). At this stage, due to the uncertainty in respect of the nature, ming or measurement of any such liabilies, we are unable to reliably esmate how these maers will proceed and their ﬁnancial impact.

18. Reconciliaon of statutory to adjusted results

26 weeks ended 28 June 2020 (unaudited) Operang Pension adjusted finance Statutory items charge Tax Adjusted results (a) (b) (c) results £m £m £m £m £m Revenue 290.8 - - - 290.8 Operang profit 28.9 26.0 - - 54.9 Profit before tax 25.2 26.0 2.3 - 53.5 (Loss)/profit after tax (2.4) 24.7 1.9 19.0 43.2 Basic (loss)/earnings per share (p) (0.8) 8.4 0.6 6.4 14.6

26 weeks ended 30 June 2019 (unaudited) Operang Pension adjusted finance Statutory items charge Tax Adjusted results (a) (b) (c) results £m £m £m £m £m Revenue 352.6 - - - 352.6 Operang profit 63.7 7.6 - - 71.3 Profit before tax 58.2 7.6 4.1 - 69.9 Profit after tax 47.0 6.2 3.3 - 56.5 Basic earnings per share (p) 15.9 2.1 1.1 - 19.1

52 weeks ended 29 December 2019 (audited) Operang Pension adjusted finance Statutory items charge Tax Adjusted results (a) (b) (c) results £m £m £m £m £m Revenue 702.5 - - - 702.5 Operang profit 131.7 21.7 - - 153.4 Profit before tax 120.9 21.7 8.0 - 150.6 Profit after tax 94.3 20.9 6.5 - 121.7 Basic earnings per share (p) 31.8 7.1 2.2 - 41.1

(a) Operang adjusted items relate to the items charged or credited to operang profit as set out in note 5. (b) Pension finance charge relang to the defined benefit pension schemes as set out in note 13. (c) Tax items relate to the impact of tax legislaon changes due to the change in the future corporaon tax rate on the opening deferred tax posion as set out in note 8.

Set out in note 2 is the raonale for the alternave performance measures adopted by the Group. The reconciliaons in this note highlight the impact on the respecve components of the income statement. Items are adjusted for where they relate to material items in the year (impairment, restructuring, disposals, tax rate changes) or relate to historic liabilies (historical legal and contract issues, deﬁned beneﬁt pension schemes which are all closed to future accrual).

19. Adjusted cash ﬂow

28 June 30 June 29 December 2020 2019 2019

(unaudited) (unaudited) (audited) £m £m £m

Adjusted operang profit 54.9 71.3 153.4 Depreciaon 13.5 11.0 21.5 Adjusted EBITDA 68.4 82.3 174.9 Net interest paid (0.6) (1.5) (3.2) Income tax paid (8.3) (3.8) (11.7) Restructuring payments (3.9) (7.7) (13.6) Net capital expenditure (1.5) (1.6) (3.4) Repayments of obligaons under leases (5.2) - - Working capital and other 14.6 (2.5) (9.9) Adjusted operang cash flow 63.5 65.2 133.1 Historical legal issues payments (0.9) (1.6) (3.5) Dividends paid - (11.2) (18.6) Pension funding payments (22.0) (24.5) (48.9) Adjusted net cash flow 40.6 27.9 62.1 Bank facility net borrowings/(repayment) 25.0 (20.3) (60.0) Acquision related cash flow (19.1) - (0.9) Net increase in cash and cash equivalents 46.5 7.6 1.2

20. Reconciliaon of statutory to adjusted cash ﬂow

26 weeks ended 28 June 2020 2020 2020 Stat (a) (b) Adjusted £m £m £m £m Cash flows from operang acvies Cash generated from operaons 78.2 (15.6) 0.9 63.5 Adjusted operang cash flow Pension deficit funding payments (22.0) - - (22.0) - - (0.9) (0.9) Historical legal issues payments Income tax paid (8.3) 8.3 - - Net cash inflow from operang acvies 47.9 Invesng acvies Proceeds on disposal of property, plant and 0.3 (0.3) - - equipment Purchases of property, plant and equipment (1.8) 1.8 - - Acquision of Subsidiary undertakings (18.9) - - (18.9) Deferred consideraon of E&S acquision Acquision of associate undertaking (0.2) - - (0.2) Net cash used in invesng acvies (20.6) Financing acvies Dividends paid - - - - Interest paid on borrowings (0.6) 0.6 - - Increase in bank borrowings 25.0 - - 25.0 Repayments of obligaons under leases (5.2) 5.2 - - Net cash used in financing acvies 19.2 Net increase in cash and cash equivalents 46.5 - - 46.5

26 weeks ended 30 June 2019 2019 2019 Stat (a) (b) Adjusted £m £m £m £m Cash flows from operang acvies Cash generated from operaons 70.4 (6.8) 1.6 65.2 Adjusted operang cash flow Pension deficit funding payments (24.5) - - (24.5) - - (1.6) (1.6) Historical legal issues payments Income tax paid (3.8) 3.8 - - Net cash inflow from operang acvies 42.1 Invesng acvies Interest received 0.1 (0.1) - - Dividends received 0.1 (0.1) - - Purchases of property, plant and equipment (1.6) 1.6 - - Net cash used in invesng acvies (1.4) Financing acvies Dividends paid (11.2) - - (11.2) Interest paid on borrowings (1.6) 1.6 - - Repayment of bank borrowings (20.3) - - (20.3) Net cash used in financing acvies (33.1) Net increase in cash and cash equivalents 7.6 - - 7.6

52 weeks ended 29 December 2019 2019 2019 Stat (a) (b) Adjusted £m £m £m £m Cash flows from operang acvies Cash generated from operaons 147.4 (17.8) 3.5 133.1 Adjusted operang cash flow Pension deficit funding payments (48.9) - - (48.9) - - (3.5) (3.5) Historical legal issues payments Income tax paid (11.7) 11.7 - - Net cash inflow from operang acvies 86.8 Invesng acvies - Interest received 0.1 (0.1) - - Dividends received 0.5 (0.5) - - Proceeds on disposal of property, plant and equipment 0.5 (0.5) - - Purchases of property, plant and equipment (3.9) 3.9 - - Acquision of associate undertaking (0.9) - - (0.9) Net cash used in invesng acvies (3.7) Financing acvies Dividends paid (18.6) - - (18.6) Interest paid on borrowings (3.3) 3.3 - - Repayment of bank borrowings (60.0) - - (60.0) Net cash used in financing acvies (81.9) Net increase in cash and cash equivalents 1.2 - - 1.2 (a) Items included in the statutory cash flow on separate lines which for the adjusted cash flow are included in adjusted operang cash flow. (b) Payments in respect of historical legal issues (2019 and 2020) is shown separately in the adjusted cash flow.

Independent review report to Reach plc

Report on the Condensed interim consolidated ﬁnancial statements

Our conclusion

We have reviewed Reach plc's Condensed interim consolidated financial statements (the "interim financial statements") in the Half-Yearly Financial Report of Reach plc for the 26 week period ended 28 June 2020. Based on our review, nothing has come to our aenon that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with Internaonal Accounng Standard 34, 'Interim Financial Reporng', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim ﬁnancial statements comprise:

· the Consolidated balance sheet as at 28 June 2020;

· the Consolidated income statement and Consolidated statement of comprehensive income for the period then ended;

· the Consolidated cash ﬂow statement for the period then ended;

· the Consolidated statement of changes in equity for the period then ended; and

· the explanatory notes to the interim ﬁnancial statements.

The interim ﬁnancial statements included in the Half-Yearly Financial Report have been prepared in accordance with Internaonal Accounng Standard 34, 'Interim Financial Reporng', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2 to the interim financial statements, the financial reporng framework that has been applied in the preparaon of the full annual consolidated financial statements of the Group is applicable law and Internaonal Financial Reporng Standards (IFRSs) as adopted by the European Union.

Responsibilies for the interim ﬁnancial statements and the review

Our responsibilies and those of the directors

The Half-Yearly Financial Report, including the interim ﬁnancial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Half-Yearly Financial Report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express a conclusion on the interim ﬁnancial statements in the Half-Yearly Financial Report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in wring.

What a review of interim ﬁnancial statements involves

We conducted our review in accordance with Internaonal Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Informaon Performed by the Independent Auditor of the Enty' issued by the Auding Pracces Board for use in the United Kingdom. A review of interim ﬁnancial informaon consists of making enquiries, primarily of persons responsible for ﬁnancial and accounng maers, and applying analycal and other review procedures.

A review is substanally less in scope than an audit conducted in accordance with Internaonal Standards on Auding (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all signiﬁcant maers that might be idenﬁed in an audit. Accordingly, we do not express an audit opinion.

We have read the other informaon contained in the Half-Yearly Financial Report and considered whether it contains any apparent misstatements or material inconsistencies with the informaon in the interim ﬁnancial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

London

28 September 2020

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