Shares bounced as Daily Mirror and Daily Express newspapers owner Reach PLC (LON:RCH) said it managed to slow the decline in print media while digital continued to shine, as it backed off talks to acquire JP Media.
In an update on Friday, the newspaper group confirmed it is “no longer in active discussions” to acquire Johnston Press, the owner of the i newspaper and The Scotsman, which last week called in the administrators after it said a formal sale process received no offers of “sufficient value”.
READ: Daily Mirror owner Reach mulls Johnston Press merger
Reach also provided a trading update, reporting a 4.4% drop in like-for-like revenue during the five months ended 24 November, improving from the 6.6% decline it posted a year ago.
Unsurprisingly, revenues in Reach’s print section declined a further 7.3%, as advertisers continue to divert money away from papers as circulation falls, but the pace of the decline slowed from a previous 8.2%.
“Strong audience growth across our portfolio of national and regional sites” boosted digital growth to 14%, going beyond the prior year’s 9.3%, which the company said has led it to further extend its network of digital regional brands into new territories, with at least seven new 'Live' launches planned for 2020 and 50 journalists to be recruited.
Newly-appointed chief executive Jim Mullen said the company had made “good financial and operational progress during the period, including an improved like-for-like revenue trend and a further reduction in net debt”, as the company expects to meet its full-year.
Broker Peel Hunt recommended the stock as a 'buy', and kept its price target at 150p, hoping that the group's "strong cash generation should be used to accelerate further the development of its digital presence and monetisable digital audiences".
Shares surged 10% to 92p in morning trading on Friday.