Reach plc has blamed “recent changes to the way Facebook presents news content, causing a reduction in referred traffic across the sector” for a dip in digital revenue in the four months to April 23, 2023.
Reach, the leading UK regional and national publisher which owns both the Liverpool Echo and Manchester Evening News, as well as a host of other local dailies and nationals including the Mirror and Daily Express and the nationwide “Live” branded local news websites, reported a fall in group revenue of almost 5.9 per cent for the four months, compounded by a 14.5 per cent drop in its digital income.
It has been engaged in a £30m cost-cutting drive recently amid rising costs and an advertising dip, and seen the departure of key editorial staff, while simultaneously launching US websites for some of its key UK properties, and was the subject of an audacious, though ultimately unsuccessful takeover bid by Yorkshire Post publisher National World last November as it battles higher costs resulting from inflation and disappointing advertising sales.
On the print side, sales remained healthy, with a two per cent rise from circulation revenue, in part thanks to the higher purchase price it introduced for some of its titles last year. Print advertising was also ahead of expectations.
The update added that the group expects to mitigate some of the dip with a reduction in operating costs of between five and six per cent during FY23 , with most of these savings to be realised during H2.
Jim Mullen, Reach’s chief executive, said: “External factors continue to impact digital revenue, delivery of the customer value strategy is driving a higher quality mix, underpinned by the strength of print. Our focus on data, means customers are receiving and responding more often to relevant content and a more engaging user experience.”
Reach, which holds its annual shareholder meeting later today, warned in March that up to 420 staff could face redundancy, including 192 journalists, only weeks after announcing it would cut 200 jobs, as part of its drive to cut costs.
Responding to the latest results, Chris Morley, NUJ national Reach coordinator, said: “With hundreds of journalist roles being cut in recent months, today’s trading update from the company will provide no reassurance to staff that an upturn is round the corner. The NUJ will be taking its members’ views direct to the board inside today’s annual shareholders meeting in London. We will ensure senior executives and directors are reminded that they must be fair to all stakeholders.”
