Reach to pay dividend on confidence in online news

Reach’s confidence that its online business will grow rapidly has prompted the UK’s largest regional news group to propose a dividend for 2020, a year in which revenues and profits were hit by the pandemic.

The London-listed group behind titles including the Daily Mirror and Daily Express on Monday said that revenues in the year ending December dropped nearly 15 per cent to £600m. Profit before tax, adjusted for costs from a restructuring and the closure of printing sites, dropped 8 per cent to £131m.

However, digital revenues rose just over a fifth to £118m, and the company expects them to double in the “medium term”. Digital sales are only a quarter of total revenues from print, which were badly hit by the pandemic.

The company’s digital push focuses on signing up new readers online and tracking them across its different publications, which include the Manchester Evening News and Liverpool Echo.

The company’s board said it would propose a final dividend of 4.26 pence per share, up 5.2 per cent on the 2019 payout that the company subsequently cancelled due to the pandemic.

Jim Mullen, chief executive, said the company had last year reached milestones in its digital transformation “ahead of original expectations” but added that “uncertainty resulting from Covid-19 clearly remains”.

Reach said that newspaper sales had over the year been affected by the closure of many stores that keep newsstands. With local businesses closed and economic activity limited, about 70 per cent of its regular small business customers stopped advertising when uncertainty caused by the pandemic was at its peak.

In July, the group said it would cut 550 jobs, slightly more than 10 per cent of its workforce.