Reach shares rally as optimistic guidance offsets revenue decline
Shares in publishing firm rallied early on Thursday as optimistic guidance helped offset news of a decline in first-quarter revenues.
Digital and print revenues fell during the first three months of the year, down by 8.5% and 6%, respectively., pushing group revenues down 6.7% year-on-year, with advertising revenues making up the majority of the decline.
However, increased spending from advertisers helped offset falling print volume trends, while a strengthening yield per page went a way to counteract a reduction in online page views.
Looking forward, Reach said trading remained robust despite wider challenging conditions, noting that the effects of a deprioritisation of news by major platforms in 2023 would lessen through the new year. It also noted that plans to reduce operating costs by 5% to 6% were on track.
As a result, Reach reckons it will meet market expectations for adjusted operating profits of £97.6m, up from £96.5m last year.
"The decision to take cost action early, alongside the continued implementation of the customer value strategy, is delivering a growing yield performance," said chief executive Jim Mullen. "This gives me confidence that we can continue to navigate current market conditions."
As of 1000 BST, Reach shares were up 7.67% at 80.0p.
Reporting by Iain Gilbert at Sharecast.com
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