Taylor Swift’s Eras tour, the Euro 2024 football tournament and the UK general election – as well as a deep round of cost-cutting and job losses – helped the publisher of the Mirror and Express newspapers to its best quarterly performance in almost two years.
Reach reported a 23% increase in operating profit to £44.5m in the first half and a return to growth in digital revenues for the first time since the third quarter of 2022.
Jim Mullen, chief executive of Reach, said recently that its print titles could become loss-making within five years and the group was relying on a digital-first strategy for survival.
However, the publisher’s digital strategy has faltered, declining by £21m year on year to £127.8m last year.
On Wednesday, Reach reported that digital income rose 6.7% in the second quarter, compared with a decline of 8.5% in the first quarter, which it attributed to “strong multi-platform content” and increased digital advertising around key events including Swift’s tour, Euro 2024 and the election.
Investors reacted warmly, sending Reach’s share price up more than 5% in early trading on Wednesday.
The company said that the increase in operating profits was fuelled by its wide-ranging cost-cutting strategy. In the space of a year Reach has cut almost 800 roles in the biggest annual reduction of jobs in the newspaper industry for decades. Mullen said he did not expect to have to make more cuts in the foreseeable future.
Operating margin increased to 16.8% in the first half, up from 12.9% in the same period last year.
Reach reported a decline in total revenues of 5.2% to £265m in the first half, as traditional print revenues continued an inexorable downward spiral, falling by 6%.
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However, the return to digital growth helped to ameliorate the total decline in revenues from 6.7% in the first quarter to 3.6% in the second quarter.