29 November 2019
This announcement contains inside information.
('Reach' or 'the Company')
Reach plc is today issuing a trading update for the 52 weeks ending 29 December 2019, covering the period from 1 July to 29 November 2019 ('the period').
Improved like-for-like (1) revenue trend
Trading during the period has been steady and remains in line with our expectations.
On a like-for-like basis, revenue during the five months ended 24 November 2019 fell by 4.4%, an improvement on the 6.6% like-for-like decline in the comparable period in 2018. Within like-for-like revenue, Print(2) fell by 7.3% and Digital(2) grew by 14.0%, with the prior year comparable period showing a fall of 8.2% and an increase of 9.3% respectively.
As previously anticipated, good progress has been made with a number of digital initiatives over the second half of the year. We continue to be encouraged by strong audience growth across our portfolio of national and regional sites. This has provided us with the confidence to further extend our network of digital regional brands into new territories, with at least seven new 'Live' launches planned for 2020 and approximately 50 journalists to be recruited.
Strong cash flow reduces net debt
Cash generation continued strongly during the period and the Company's balance sheet remains robust. In light of this favourable ongoing performance, we now expect to show a net positive cash balance at the year end.
Outlook for the full year
The Board remains confident that the full-year performance will meet its expectations.
Update on review of JPI Media's assets
Further to the Company's announcement on 18 July 2019, the Board of Reach confirms that it is no longer in active discussions about acquiring certain of JPI Media's assets. Merger and acquisition opportunities which would accelerate the Company's strategy will continue to be reviewed on a regular and disciplined basis.
Jim Mullen, Chief Executive Officer of Reach plc, commented:
"Since joining the business in August, I've been impressed by the strength of Reach's national and regional brands, the quality of our content and the wide geographic distribution of our products through both print and digital channels. I've also been encouraged by the wealth of talented and inspirational staff working in the business.
"We have made good financial and operational progress during the period, including an improved like-for-like revenue trend and a further reduction in net debt. The Reach brands continue to have real relevance at both a national and local level, as is demonstrated by our considerable audience growth. We are working to complement our audience reach with a significant depth of customer insight and data that will allow us to build an intelligent, relevant and trusted content business for the long term."
Capital Markets Day
We are planning to present a strategy update in the first quarter of 2020. Further details will be issued early in the New Year.
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020 7293 3000
Jim Mullen, Chief Executive Officer
Simon Fuller, Chief Financial Officer and Company Secretary
Angus Prentice, Interim Investor Relations Director
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020 7353 4200
David Allchurch, Partner
This announcement can be downloaded from www.reachplc.com. Reach will announce its FY2019 results on 24 February 2020.
The person who arranged for the release of this announcement on behalf of Reach was Simon Fuller, Chief Financial Officer and Company Secretary.
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 five months ended 24 November 2019 and trading in the period 1 July to 29 November 2019. 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.
(1) The like-for-like trends for the five months ended 24 November 2019 exclude from the 2018 comparative the impact of portfolio changes and the disposal of Communicator Corporation.
(2) Print revenue comprises circulation, advertising (including digital classified which is predominantly upsold from print), printing (including third party printing contracts) and other (contract publishing, syndication, reader offers and events). Digital revenue comprises the combined display and transactional revenue streams.
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