Shares plunge as Reach warns on profits
Shares in Reach plunged in early trading on Wednesday, after the newspaper publisher warned on profits and pledged to cut costs by "at least" £30m.
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The owner of the Daily Mirror and Daily Express, as well as a raft of regional papers, said that while circulation had grown by 1.8% in the fourth quarter, group revenues had been lower than expected, down 4.2% year-on-year.
Digital revenues fell 5.9%, while print advertising revenues slumped 20.2%.
As a result, the firm said it now expects full-year operating profits to be below the current market consensus for £112.8m by "mid-single digit" percentage points.
As at 0900 GMT, shares in Reach had tumbled 28% to 78.91p.
Reach said that the economic backdrop had created "unavoidable" headwinds for the whole sector, including advertising weakness and prolonged cost inflation.
Jim Mullen, chief executive, said: "We expect current market headwinds will continue during 2023 and have therefore taken decisive action, putting in place a further cost reduction plan.
"This will ensure we retain our strong foundations and are able to continue investing in our digital growth priorities, which position us to benefit strongly when the economic environment improves."
Reach said it was targeting further cost savings of £30m through the "simplification of central support functions, supply chain efficiencies in print and distribution, and accelerated removal of editorial duplication". In a memo to staff, Reach said that under the proposals, "regrettably around 200 roles of current employees will be made redundant", The Guardian reported.