TIDMRCH
RNS Number : 1903M
Reach PLC
07 May 2020
7 May 2020
Reach plc trading update for the 4-month period to 26 April
2020
Informing and engaging customers during an unprecedented
crisis
Reach plc ('the Group') is issuing a trading update for the
4-month period from 30 December 2019 to 26 April 2020 ('the
period'), ahead of its 2020 Annual General Meeting today.
Revenue trends(1)
Group revenue in the period was down 13.1% with print revenue
down 15.8%, while digital revenue grew by 4.7%. Having started the
year well, with encouraging digital growth, the COVID-19 crisis
began impacting the business from mid-March. Since that time the
Group has seen declines in circulation sales, falls in print
advertising revenue at a national and local level, reduced printing
requirements from third parties, impacts from cancelled events and
a reduction in digital yields due to lower advertising demand.
Despite this we have seen unprecedented demand for news and
content across our digital titles, with 42 million online users in
the UK in March, ensuring Reach retained its position as the 5(th)
largest UK online property(2) . April saw total page views of 1.7
billion (up 57%)(3) , average daily app users rose by 47% to
674,000, and our hyperlocal news platform InYourArea surpassed
650,000 registered users(4) . This progress towards our key
strategic objectives of increasing customer registrations and
securing enhanced customer data and insight, provides strong
foundations for future progress.
April represented a full month of impact from the lockdown and
saw Group revenue fall by 30.5%, with print revenue down by 31.8%
and digital revenue falling 22.5%, with higher page volumes not
able to offset declines in advertising yields. 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.
Key mitigating actions
On 6 April, we confirmed that a number cash conservation and
cost reduction measures had already been introduced. Further to
these actions we also announced additional measures including pay
reductions, suspensions of all 2020 bonus schemes and furloughing
of a number of colleagues, as well as the cancellation of the 2019
final dividend. These changes were successfully implemented shortly
after the announcement. In addition, we began discussions with
pension funds about a three-month deferral of monthly contributions
which has now been agreed.
Balance sheet and liquidity
The Group continues to have access to sufficient liquidity. Net
cash surplus as at the 26 April 2020 was GBP33.2 million reflecting
the proactive steps taken to conserve cash. This represents a cash
balance of GBP58.2 million less GBP25.0 million which has been
drawn down from the Group's revolving credit facility of GBP65
million, which is available until December 2023. The business has a
proven track record for disciplined cost control and strong cash
management which will continue to be vital in the current uncertain
trading environment.
Outlook
While revenue performance for the year is expected to be
significantly impacted by the COVID-19 crisis, the cost mitigation
measures introduced will partially protect profitability levels and
cash generation. Given the continued uncertainty about the severity
and length of the crisis, Reach continues to suspend guidance. We
came into this crisis with a robust financial position and continue
to run an efficient business.
Jim Mullen, Reach plc Chief Executive, commented:
"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."
Notes
(1) Revenue trends - Revenue on an actual and like for like
basis are the same for 2020
(2) Source: Comscore UK multi-platform March 2020
(3) Source: Google Analytics
(4) Source: Reach data
Enquiries
Reach
Jim Mullen, Chief Executive Officer COMMUNICATIONS@REACHPLC.COM
Simon Fuller, Chief Financial Officer
Ciaran O'Brien, Communications Director
Tulchan
David Allchurch /Giles Kernick 020 7353 4200
REACHPLC@TULCHANGROUP.COM
Forward-looking statements
You are not to construe the content of this announcement as
investment, legal or tax advice and you should make your own
evaluation of the Company and the market. If you are in any doubt
about the contents of this announcement or the action you should
take, you should consult a person authorised under the Financial
Services and Markets Act 2000 (as amended) (or if you are a person
outside the UK, otherwise duly qualified in your jurisdiction).
This announcement has been prepared in relation to the financial
results for the four months ended 26 April 2020 and trading in the
period 30 December 2019 to 7 May 2020. The financial information
referenced in this announcement is not audited and does not contain
sufficient detail to allow a full understanding of the results of
the Group. Nothing in this announcement should be construed as
either an offer or invitation to sell or any offering of securities
or any invitation or inducement to any person to underwrite,
subscribe for or otherwise acquire securities in any company within
the Group or an invitation or inducement to engage in investment
activity under section 21 of the Financial Services and Markets Act
2000 (as amended). Certain information contained in this
announcement may constitute "forward-looking statements", which can
be identified by the use of terms such as "may", "will", "would",
"could", "should", "expect", "anticipate", "project", "estimate",
"intend", "continue", "target", "plan", "goal", "aim" or "believe"
(or the negatives thereof) or other variations thereon or
comparable terminology. These forward-looking statements include
all matters that are not historical facts and include statements
regarding the Company's intentions, beliefs or current expectations
concerning, among other things, the Company's results of
operations, financial condition, changes in global or regional
trade conditions, changes in tax rates, liquidity, prospects,
growth and strategies. By their nature, forward-looking statements
involve risks, assumptions and uncertainties that could cause
actual events or results or actual performance of the Company to
differ materially from those reflected or contemplated in such
forward-looking statements. No representation or warranty is made
as to the achievement or reasonableness of and no reliance should
be placed on such forward-looking statements. The Company does not
undertake any obligation to update or revise any forward-looking
statement to reflect any change in circumstances or in the
Company's expectations.
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.
END
TSTSSEFWMESSELI
(END) Dow Jones Newswires
May 07, 2020 02:00 ET (06:00 GMT)
Reach (LSE:RCH)
Historical Stock Chart
From Apr 2024 to May 2024
Reach (LSE:RCH)
Historical Stock Chart
From May 2023 to May 2024