Reach, the publisher of the Manchester Evening News and Liverpool Echo, has recorded a first-half loss of £113.5m after slashing the value of its regional titles by £150m.
The company, formerly known as Trinity Mirror, booked a non-cash £150m impairment charge to “reflect a more challenging outlook for our regional business”. The UK’s largest publisher of local newspapers said this meant it had cut the value of its portfolio by almost half – from £347m to £197m.
Pre-tax loss for the 26 weeks to July 1st was £113.5m, compared with a pre-tax profit of £38.2m for the same period last year. First-half revenue rose 11% to £353.8m from £320m, reflecting the acquisition of the Daily Express and Daily Star newspaper titles as well as OK! Magazine for £200m.
Stripping out the impairment charge, Reach’s adjusted operating profits rose 6.2% year-on-year to £66.5m. On a like-for-like basis, revenue fell 7.2%, with an uplift of 6% in digital revenue failing to cover the fall in print publishing income.
The board declared an interim dividend of 2.37p a share, up 5.3% from 2.25p a share a year earlier. The UK’s largest publisher of local newspapers said it had cut the value of its portfolio by almost half – from £347m to £197m – to “reflect a more challenging outlook for our regional businesses”.
Reach also reported an £8m charge for restructuring costs such as the job cuts following the Express takeover, and a £7.5m charge to top up its fund for settling historical phone hacking claims against its newspapers. The company said it expects to make £18m in cost savings for the full year – up from a previous target of £15m.
“We have delivered a positive financial performance in what remains a difficult trading environment for the industry, in particular the regional businesses,” said chief executive Simon Fox.
“The benefit of improved performance from national print advertising coupled with further cost mitigation will support profits over the year despite a further increase in newsprint prices for the second half.”
