Mirror, Express and Star publisher Reach is “accelerating plans” to drive digital engagement and capture customer data after group revenue fell by nearly a third in April as a result of the Covid-19 crisis.
In line with other news publishers, Reach said the Covid-19 crisis began impacting its business from mid-March, leading to a drop in sales and print advertising revenue at both the national and local level.
But the company, which also runs a network of local and regional news titles, said it had seen “unprecedented demand for news and content” across its digital titles, reaching 42m users in the UK in March.
April was the first full trading month impacted by the lockdown and led to a drop in group revenues of 30.5 per cent, with print revenue down 32 per cent and digital revenue falling by 22.5 per cent.
Reach said higher page volumes were not able to offset declines in advertising yields.
‘Advertising remains very challenging…’
Group revenue for the four-month period from 30 December 2019 to 26 April 2020 fell by 13 per cent, with print revenue down 16 per cent. Digital revenue grew by five per cent.
The figures were released in a trading update ahead of the group’s annual general meeting, which is being held today in Surrey.
Reach said: “While in some areas we have recently seen a stabilisation in trends, circulation remains significantly below pre-Covid-19 levels and advertising remains very challenging and uncertain, with regional advertising particularly impacted.”
In April the group recorded a total of 1.7bn page views and had 674,000 daily users across its digital apps on average, while hyperlocal news platform In Your Area surpassed 650,000 registered users.
On 6 April Reach introduced cost-saving measures to mitigate the financial impact of the coronavirus crisis, including putting a fifth of its staff on furlough, equal to nearly 1,000 employees.
Staff not furloughed had their salaries cut by ten per cent, never falling below the living wage, while board and senior editorial and management staff had a 20 per cent pay cut, including chief executive Jim Mullen.
Bonus schemes for 2020 have also been suspended at the UK’s largest news publisher along with the final dividend for 2019 to shareholders. Reach has also agreed a three-month deferral of monthly pension contributions.
Revenue expected to be ‘significantly impacted’ by crisis
The company has a net cash surplus of £33.2m as of 26 April, after drawing £25m from its £65m credit facility, which is available until December 2023.
Reach said it expected revenue performance to be “significantly impacted by the Covid-19 crisis” but cost saving measures would “partially protect profitability levels and cash generation”.
It added: “We came into this crisis with a robust financial position and continue to run an efficient business.”
Mullen said in a statement: “Our priority in this crisis has been to ensure the health and safety of our colleagues and I would like to thank all of them for the positive way they have responded throughout this process.
“Our teams continue to focus on producing the award-winning journalism and content that is so valued by our customers at this critical time.
“We continue to build on our position as the UK’s largest commercial national and regional news publisher. Our strategy is now even more relevant than before the crisis so we are accelerating plans to drive digital engagement and capture the customer insight and data that is so key.
“This will ensure a strong and sustainable future for Reach’s trusted news brands.”
Picture: Yui Mok/PA Wire