Reach PLC Trading Update (6915X)
06 May 2021 - 4:00PM
UK Regulatory
TIDMRCH
RNS Number : 6915X
Reach PLC
06 May 2021
Reach plc
Trading update for the 4-month period to 25 April 2021
Strong growth in digital revenues, trading ahead of
expectations
6 May 2021
Reach plc ('the Group') is issuing a trading update for the
4-month period from 28 December 2020 to 25 April 2021 ('the
period'), ahead of its 2021 Annual General Meeting today.
-- Good start to the year with digital and print revenue
performing slightly ahead of our expectations
-- Continued growth in registrations; now at 6.2m, versus 5.8m
reported at the beginning of March
-- Customer Value Strategy progressing well with continued increase in loyalty and engagement
-- High level of interest from brands in new 'plus' portfolio of
products; building strong pipeline for H2
-- Transformation programme efficiencies and digital mix support growth in operating margin
Strong acceleration of digital revenue growth and moderation of
print decline
During the period, digital revenue grew by 35.0%, with total
print revenue down 10.4% and circulation down by 7.9%. Group
revenue for the period was down 3.1%.
The year on year movements in digital and print reflect softer
comparatives during the latter part of the period as we annualised
the first COVID-19 lockdown, which although beneficial for online
volumes, was negative for digital yields, print advertising and
circulation. On a two-year growth rate basis, digital revenue
increased by 41.3%, a broadly stable rate of growth compared to the
H2'20 two-year growth of 39.8%. The two-year movement in print
revenue was also broadly stable, down 24.3% in the period compared
to 23.3% during H2'20.
Continued strategic momentum
The business has made further progress in growing the number of
registered customers, which now stands at 6.2m, and remains well on
track to reach 10m by the end of 2022. Customer engagement has
continued to grow and will be supported by increased strategic
investment in data and analytics, including a focus on customer
journey mapping to support the objective of growing average revenue
per user.
Outlook
The business is performing well with strong progress against all
strategic objectives. Although headline revenue growth is currently
flattered by a soft prior year comparative, underlying momentum has
been encouraging, particularly in digital where good early progress
has been made in commercialising our new 'plus' portfolio of
products. The business is continuing to benefit from the
efficiencies driven by last year's transformation programme, which
together with a growing mix of digital revenues, means that
operating profit for the year is now expected to be slightly ahead
of market expectations(1) .
Jim Mullen, Reach plc Chief Executive:
"We have had a positive start to the year and are seeing the
benefits of last year's transformation programme. With digital now
accounting for more of our advertising revenues than print and
growing strongly, we are well placed to make further progress
during 2021. We have a strong balance sheet and are now increasing
investment to accelerate delivery of the Customer Value Strategy,
focusing on the use of enhanced customer insight to drive
engagement and support our medium-term objective of doubling
digital revenues."
(1) Latest company compiled view of market expectations shows
consensus adjusted operating profit of GBP137.1m for 2021
Notes
Revenue movements stated on like-for-like basis excluding ISL
and impact of regional portfolio changes.
Period YOY Breakdown
--------------------------------- ----------- -----------
Period YOY Q1 YOY % April YOY Period 2yr
% % %*
----------- ---------- ----------- -----------
Digital Revenue 35.0% 25.2% 78.4% 41.3%
----------- ---------- ----------- -----------
Print Revenue -10.4% -15.2% 9.1% -24.3%
----------- ---------- ----------- -----------
* circulation revenue -7.9% -11.3% 5.3% -15.8%
----------- ---------- ----------- -----------
Group Revenue -3.1% -8.7% 19.7% -15.5%
----------- ---------- ----------- -----------
*Period 2yr movement is a combined two-year like-for-like
comparison versus the same period in 2019
Enquiries
Reach
communications@reachplc.com
Jim Mullen, Chief Executive Officer
Simon Fuller, Chief Financial Officer
Ciaran O'Brien, Communications Director
Matt Sharff, Investor Relations Director +44 (0)7341 470 722
Tulchan Communications reachplc@tulchangroup.com
David Allchurch/Giles Kernick +44 (0)207 353 4200
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