Reach PLC, a prominent media company in the UK, announced a decline in pretax profit for the first half of the year, primarily due to a decrease in revenue and higher adjusted expenses. Nevertheless, the company remains positive about meeting market expectations by 2023.
During the 26-week period ending on June 25, pretax profit amounted to £6.7 million ($8.6 million), a notable decrease compared to last year’s figure of £32.0 million. Administrative expenses also saw an increase, rising to £71.4 million from £56.4 million. Additionally, adjusted expenses, which include costs related to the phone-hacking trial, rose to £25.0 million from £12.7 million.
Revenue for the period was reported at £279.4 million, down from £297.4 million the previous year. This decline was mainly driven by a 2.7% drop in print revenue and a substantial 16% decrease in digital revenue. The reduced digital revenue can be attributed to lower advertising demand, attributed to macroeconomic uncertainty and decreased page views following algorithm changes on Meta Platforms Inc.’s Facebook.
Jim Mullen, Chief Executive of Reach PLC, acknowledged that external market conditions have impacted the company’s financial performance and hindered its short-term growth potential. However, he emphasized their commitment to enhancing and diversifying their digital offering to position themselves for future growth as the macro environment improves.
Despite these challenges, Reach PLC insists that it remains on track to meet its full-year expectations. Cost reduction measures have been implemented to support profit expectations.
The company’s board also confirmed an interim dividend of 2.88 pence per share, maintaining consistency with the previous year.