TIDMRCH
RNS Number : 1917T
Reach PLC
23 November 2021
Reach plc
Digital growth and strengthening print help support further
investment
23 November 2021
Reach plc is issuing a trading update covering 28 June 2021 to
21 November 2021 ('the period').
Jim Mullen, Reach plc Chief Executive
"Strategic delivery is transforming our prospects for growth and
we're progressing towards our goal of doubling digital revenue over
the medium term. Registration numbers are strong, and advertisers
are responding to our expanded portfolio of data-led products.
Together with our efficient operating model, this is enabling us to
invest further in digital content as we build a modern and
inclusive media business."
-- Revenue currently trading ahead of full year expectations, enabling digital investment
-- Customer registrations now over 8m, up from 6.7m at end of July
-- Newly extended and enlarged RCF and strong cash conversion increases financial flexibility
Continued strong growth in digital revenue and further print
resilience
We have seen a more normalised pattern of year-on-year trading
during H2, following the relatively soft H1 comparatives as we
annualised the first COVID lockdown. Revenue has continued to grow
and was up 1.2% overall in the period, with digital up 17.2% and
print declines moderating further to 3.5%.
A strong digital revenue performance in the period was driven by
yield expansion, supported by strategic delivery and a recovery in
digital advertising versus 2020. On a two-year basis, digital
revenue growth remains encouraging, up by 39.0% for the
year-to-date, with average page views growing by 30%.
The full year outlook for print has strengthened, driven
predominantly by circulation which is on an improved two-year
trajectory compared to H1. This reflects a combination of market
recovery, strategic investment in availability, marketing,
promotions and product enhancement.
Delivery of strategy on track with investment programme
accelerating
Customer registrations are now over 8m (6.7m at end of July),
with growth supported by the recent addition of Google 'one tap'
functionality, a more frictionless route to sign-up, which enables
deeper customer understanding. As we approach our target of 10m
registered users, we're focusing on the next phase of the Customer
Value Strategy, driving retention, engagement frequency and dwell
time to grow ARPU. Our 'PLUS' products have now been used to
support over 150 campaigns and we're exploring routes to deeper and
broader integration with advertisers via programmatic exchanges,
curated marketplaces and other digital buying platforms.
Revenue mix and cost savings from last year's transformation
programme are supporting a stronger profit margin and increased
strategic investment, particularly in expanding the breadth and
depth of our digital content. So far this year we have hired c.400
additional digital editorial roles in both national and local
titles and completed the rollout of the local Live network into
every county of England and Wales.
While transformation in 2020 enabled a more efficient and
adaptable operating model, we remain vigilant regarding wider
consumer confidence and inflationary pressure in the post-pandemic
environment. We have begun to see an increase in the cost of print
production, particularly for energy and newsprint. With the
longer-term effect on the cost base still emerging, we are closely
monitoring developments and will continue to prioritise
efficiencies to mitigate the impact.
We have yet to reach agreement with regard to the triennial
review of our pension commitments but we continue to engage in
discussions and remain committed to working towards our objective
of achieving funding of all schemes as agreed in our 2016 triennial
review.
New credit facility underpins strength of balance sheet and cash
flow
We recently concluded an increase in our revolving credit
facility with an expanded syndicate of relationship banks. The
increase in available facilities from GBP65m to GBP120m, for a term
of at least four years, demonstrates growing confidence in our
covenant and provides further flexibility to invest in the
strategy.
Notes
Latest company compiled view of market expectations shows
consensus group revenue of GBP604.1m and adjusted operating profit
of GBP145.8m for 2021.
Revenue movements stated on like-for-like basis excluding ISL
(Independent Star Limited) and impact of regional portfolio
changes. Period relates to 28 June to 21 November 2021 with
November being a latest estimate of revenues.
YOY Breakdown 2yr* Breakdown
---------------------------------
Period H1 Year to date Period H1 Year to
date
% % % % % %
------- ------- ------------- -------- -------- --------
Digital Revenue 17.2% 42.7% 29.2% 36.4% 41.4% 39.0%
------- ------- ------------- -------- -------- --------
Print Revenue (3.5%) (5.2)% (4.5%) (21.4%) (23.9%) (22.8%)
------- ------- ------------- -------- -------- --------
* circulation revenue (3.7%) (5.1)% (4.5%) (15.6%) (16.0%) (15.8%)
------- ------- ------------- -------- -------- --------
* advertising revenue (2.8%) (4.3)% (3.6%) (29.2%) (33.7%) (31.7%)
------- ------- ------------- -------- -------- --------
Group Revenue 1.2% 2.6% 2.0% (11.9%) (14.9%) (13.6%)
------- ------- ------------- -------- -------- --------
*Period 2yr movement is a combined two-year like-for-like
comparison versus the same period in 2019
Preliminary results for the 12 months to 26 December 2021 will
be published on 1 March 2022.
Enquiries
Reach
Jim Mullen, Chief Executive Officer
Simon Fuller, Chief Financial Officer
Ciaran O'Brien, Communications Director
communications@reachplc.com
Matt Sharff, Investor Relations Director +44 (0)7341 470 722
Tulchan Communications reachplc@tulchangroup.com
Giles Kernick +44 (0)207 353 4200
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFEFFUEEFSEEF
(END) Dow Jones Newswires
November 23, 2021 02:00 ET (07:00 GMT)
Reach (LSE:RCH)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Reach (LSE:RCH)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
