Mirror and Express owner Reach swings into the red as it takes a £150m hit on its regional print titles
- Reach posted a £113.5m pre-tax loss for the first half of the year
- The group – formally the Trinity Mirror – took a £150m hit on its regional arm
- Its acquisition of the Express and Star helped sales grow 10.6% to £353.8m
- Reach’s share price slid more than 3% on the news
The publisher of the Mirror and Express newspapers has plunged into the red as it grapples with an ongoing industry-wide decline in print advertising.
Reach – formally known as Trinity Mirror – swung to a £113.5m pre-tax loss, compared with profits of £38m a year earlier, after slashing the value of its flagging regional titles, which include the Liverpool Echo, Birmingham Mail and the Manchester Evening News.
Reach was forced to swallow a £150m impairment charge after being stung by ‘more challenging than expected’ conditions in this part of the business.
Reach owns the Daily Mirror, Express and Star newspapers, as well as regional titles like the Liverpool Echo, Birmingham Mail and Daily Record
Reach was also forced to set aside an additional £7.5m to deal with higher than anticipated civil claims over the phone hacking scandal.
The cash, earmarked to cover the cost of claimants’ legal expenses, brings the total put aside for settlements to £70.5m.
The publisher, which snapped up the Express and Star newspapers from Richard Desmond’s Northern & Shell Media Group in February, said its new national titles spearheaded a 10.6 per cent spike in group sales to £353.8m.
On a like-for-like basis, sales sunk 7.2 per cent.
Boss Simon Fox dubbed it a ‘positive financial performance’ in what remains a difficult trading environment for the industry.
Revenue from print advertising is in decline, while digital ad sales are in growth
‘The benefit of improved performance from national print advertising coupled with further cost mitigation will support profits over the year despite a further increase in newsprint prices for the second half,’ he said.
Reach is confident that its full-year figures will be in line with market expectations and that it will secure the £18m in cost savings it has pledged.
Its share price sunk more than 3 per cent in early trading.