Publisher of Mirror and Express newspapers sees values plummet – going into a financial loss for the half year
Reach, which was formerly known was Trinity Mirrror, has been hit with a £150million charge for its regional publications after a 'more challenging than expected outlook'
THE publisher of the MIRROR and EXPRESS newspapers has seen the value of its regional titles plummet, forcing it into a loss for the half year.
REACH, formerly known as TRINITY MIRROR, has been hit by a £150million charge due to a “more challenging than expected outlook” for its regional publications.
These are grappling with a slowdown in local advertising.
The company warned there is now “greater uncertainty” for its 100-plus regional titles — which include the Liverpool Echo, the Derby Telegraph and the Manchester Evening News — over the medium term.
The £150million bill means Reach plunged into a £113.5million pre-tax loss in the six months to July.
This compares with profits of £38.2million a year before.
Reach confirmed it has made £7.5million in extra provisions for legal bills relating to a phone hacking scandal, taking the total tab for settlements to £70.5million.
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Russ Mould, investment director at AJ BELL, commented: “Uncomfortable as the group’s ongoing legal woes may be, the real issue is a lack of growth.
“Merging businesses and stripping out costs can only go so far, especially if the quality of the underlying product is to be maintained.
“And Reach’s lack of sales or profit progress over the last decade, despite three big acquisitions and multiple rounds of cost-cutting, shows just how hard it is for publishers to monetise digital audiences and support readers who still prefer print.”
Revenues were 10.6 per cent higher overall at £354million, boosted by the acquisition of the Express and Star titles from Richard Desmond in February.
Reach chief executive Simon Fox said: “We have delivered a positive financial performance in what remains a difficult trading environment for the industry, in particular the regional businesses.”
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