Euros coverage helps Reach profits rise as cost cutting offsets falling revenue

Cost-cutting at newspaper and website publisher Reach helped its half-year profit rise today, as did demand for its coverage of England’s progress to the finals of the Euros. 

The publisher of the Daily Mirror reported a rise of almost a quarter in operating profit of £44.5 million for the six months to the end of June. That came from revenue of £265 million, down by over 5%. 

There have been controversial job cuts at the firm, which has centralised the production of stories that drive traffic to its portfolio of national and local websites. The changes followed similar moves made at its audio and video teams. 

Nonetheless, after changes to the algorithms used by search engines, page view volumes dropped by a quarter. Reach said the fall came “due to ongoing impact of 2023’s referrer deprioritisation of news”. 

It also said circulation revenues from its print editions were “a reliable revenue stream”, and that its teams “mitigated the circulation volume headwind with cover price increases, strong promotional activity and standalone products tying into popular events”. 

Jim McMullen, chief executive, said: “Alongside our expertise in managing our print product, we have traded our digital assets hard and delivered an operating margin improvement,” adding”

 “We continue to build a stronger, more resilient business and are on track with our plans for the year.”

It has been making more use of artificial intelligence in its newsrooms and said today that “we continue to robustly test a number of AI opportunities to support both our editorial teams and the wider business.”

The company did not set aside any more money to pay for “civil claims in relation to historical phone hacking and unlawful information gathering”. 

It has faced high-profile lawsuits over phone hacking, including legal action from Prince Harry. 

Reach said today: “Payments of £5.2m have been made during the period. At the half year, a provision of £13.0m remains outstanding and this represents the current best estimate of the amount required to resolve this historical matter”. 

It expects to make any further payouts to victims in the next two years.

Reach’s shares were up  over 4p to 105p today, a rise of just over 4%.