A trading update from Reach PLC (LSE:RCH) revealed the digital revolution for the national and regional newspaper group has effectively run its course.
At the same time a longstanding legacy issue, contributions to the MGN Pension Scheme, continue to exert an impact on the business with contributions set to rise by £5.1 million to £46 million a year until 2028.
Against a tough market backdrop, the owner of the Daily Mirror said trading for the third quarter was in line with forecasts and that it would meet market expectations.
While digital revenues dropped 13.7% in the three months to 24 September 2023, and total turnover was off 7.8%, Reach hopes to mitigate the impact on the bottom line by cutting operating costs by 5-6%.
Chief executive Jim Mullin hailed the "resilient" print business, not something a newspaper boss has said in the last two decades with the internet taking on (and largely winning against) traditional media.
Investors will be little cheered by the outlook statement: “We do not anticipate the market backdrop to change materially in the near term and as a result we remain focused on the areas within our control; improving customer engagement, diversifying revenues and driving efficiencies.
“Our plans to reduce full-year operating costs by 5-6% remain on track.
“We expect a High Court judgement on time limitation relating to historical legal issues in the next few months.”