Online performance boosts newspaper publisher’s profit expectations

Newspaper publisher Reach expects to outperform expectations this year after it did better than first thought in its online and print publications.

Online publications have been the stand-out performer for the publisher of the Daily Mirror and Daily Express, as people have been stuck at home for the past year.

They continued strongly, with digital revenue soaring 35% in the four months to late April, Reach said on Thursday.

Overall, it led to a 3.1% drop in overall revenue.

This means that Reach now believes it will make an operating profit which is slightly ahead of the £137.1 million that analysts are expecting on average.

Like many industries, those that rely on selling newspapers have struggled in the past year.

Last year, Reach announced plans to cut costs which saw 550 people lose their jobs.

“We have had a positive start to the year and are seeing the benefits of last year’s transformation programme,” chief executive Jim Mullen said.

“With digital now accounting for more of our advertising revenues than print and growing strongly, we are well-placed to make further progress during 2021.”

On a two-year basis, print revenue had dropped around 24%, Reach said.

Reach publishes dozens of newspapers and other publications across the country, including the Daily Star, the Scottish Daily Record and OK! Magazine. It also runs many local newspapers.

Mr Mullen said: “We have a strong balance sheet and are now increasing investment to accelerate delivery of the Customer Value Strategy, focusing on the use of enhanced customer insight to drive engagement and support our medium-term objective of doubling digital revenues.”

Shares rose 5% on Thursday afternoon.