Trading Update November 27, 2020
RNS Number : 6932G Reach PLC 27 November 2020
27 November 2020 Reach plc ('Reach' or 'the Company') Trading Update
Digital momentum drives performance ahead of 2020 market expecta ons
Reach plc is today issuing a trading update for the 52 weeks ending 27 December 2020, covering the period from 29 June to 27 November 2020 ('the period').
Strong digital growth, resilient circula on
Overall Group performance has exceeded market expecta ons, with con nued strong digital revenue growth of 16.2% for the five months to 22 November 2020, assisted by increased customer engagement.
Circula on sales have remained resilient despite the recent lockdowns, supported by management ac on on availability and increased cross-promo on of na onal and regional tles. Overall, for the five months to 22 November 2020, a decline in print revenue of 19.6% contributed to a Group revenue decline of 13.9%.
The Group expects these trends of strong digital growth and resilient circula on to con nue into December, while recognising that the current macroeconomic uncertain es make forecas ng more challenging.
New, more efficient opera ng model
During the period, Group costs have been significantly reduced, underpinned by the transforma on programme. Given this cost focus and increasing digital contribu on, the opera ng margin in the second half is expected to be materially ahead of the first half. Having successfully implemented a strategic transforma on programme in the period, the Company has recently announced plans to consolidate its prin ng opera ons to achieve further efficiencies. A consulta on on these proposals, which would involve closure of two of its six prin ng sites, is ongoing.
Con nued good progress with new customer value strategy
Customer registra ons have now exceeded 4.25m, and the company is on track to deliver the 10m registra ons it is targe ng by the end of 2022. Reach retains its leading scale audience in the UK with 42.1m unique monthly visitors accessing its sites during October.
The strengthened customer and insight team con nues to focus on the launch of the Reach ID, which is on track to launch in December as planned. This will unlock significant poten al in the form of customer insights that Reach can offer during 2021.
Acquisi on of remaining 50% in Independent Star Limited
The Group completed the acquisi on of the remaining 50% in Independent Star Limited on 24 November 2020. The addi on of the Irish Star assets to the Reach por olio brings the number of newspapers it publishes in Ireland - North and South - to eight, plus one female lifestyle magazine (RSVP) and six online tles (Irishmirror.ie, Dublin Live, Cork Beo, Belfast Live, RSVP Live and Buzz.ie).
Posi ve balance sheet supported by strong cash flow
The Group has con nued to generate healthy levels of cash during the period and is forecast to retain a strong posi ve cash posi on at year-end despite incurring one off cash costs associated with the transforma on programme and other historical items.
Jim Mullen, Chief Execu ve Officer of Reach plc, commented:
"The passion and talent of our people con nue to take the Group and its news brands forward to its digital future. Reach has con nued to deliver great content and con nues to drive increased customer loyalty and engagement.
The headwinds from COVID-19 have been considerable, but while we remain mindful of poten al impacts from the current lockdowns, we approach the end of the year with a strong and growing digital business, resilient print circula on sales, and a new, efficient opera ng model. Our customer value strategy is now entering a new phase, with an increased focus on business intelligence and insight. The launch of the Reach ID, which will deliver a single view of customer ac vity across our na onal and regional network, is on track for December, and will provide enhanced data and insight that will support further digital revenue growth.
2020 has been a pivotal year for Reach and the response of our colleagues to the challenges of 2020 has been first-class. Whilst macroeconomic uncertainty remains, we approach 2021 with confidence in the long-term value of our loyal audience and trusted brands and with strong digital momentum."
-ends-
Note: Revenue trends on an actual and like-for-like basis are the same for 2020. The period relates to 29 June to 22 November 2020 with November represen ng the latest es mate of revenues. Reach will issue its Annual Results Announcement for the financial year ending 27 December 2020 on 1 March 2021.
Enquiries Jim Mullen, Chief Execu ve Officer Simon Fuller, Chief Financial Officer communica [email protected] Ciaran O'Brien, Director of 020 7353 4200 Communica ons Tulchan Communica ons David Allchurch / Giles Kernick [email protected]
About Reach plc
Reach plc is the largest commercial na onal and regional news publisher in the UK with a growing por olio in Ireland. We create engaging, differen ated content which is distributed through newspapers, magazines and digital pla orms - playing a central role in our audiences' daily lives.
Our na onal and regional brands have a long heritage of being trusted sources of the latest news, informa