Reach PLC Reports Mixed Results: Revenue Down but Profits Up in 2024

The UK’s largest news publisher Reach PLC’s revenue dropped for the fifth time in six years in 2024.

Revenue fell 5.3% to £538.6 million ($686 million) from nearly £568.6 million ($724 million), but Chief Executive Officer Jim Mullen said on the earnings call that 2024 was “a real year of progress.” Operating profit increased 6% to £102.3 million ($130 million) from £96.5 million ($123 million), ahead of market expectations.

“An operating profit of £102 million, up 6% versus last year, is significant not only in it being ahead of expectations but also because it helps us sustain our commitment to an ad-funded free-to-access news model,” Mullen said on the call. “Because many households in the United Kingdom and families are simply not in a position to pay or subscribe to news.”

“News is not and never should be a luxury,” he said.

Reach reported its 2024 financial results using the standard financial year calendar; however, its prior 2023 results were reported using a 53-week period. Because of this, adjustments for like-for-like (LFL) comparisons are included in Reach’s financial results.

Other notable figures from Reach PLC’s results include:

• Operating costs down 7.6%, ahead of the 5% to 6% target set by the company. Reach cited “the cumulative impact of the decisive and early cost initiative taken in 2023” as drivers alongside some unwinding of inflation and newsprint inflation.
• Page view growth increased 6% in Q4, but was down 14% for the year.
• The central “content hub,” a team of journalists that produces traffic-driving content for use across websites, introduced in 2024, doubled the average page views of its team members, while Reach’s AI editorial tool increased page views by 25%. Reach’s AI-supported content is edited and approved by journalists.
• The video studio, also introduced last year, increased social video views by 12%. Reach will add new podcasting and video facilities in London, Glasgow, Manchester, Liverpool and Birmingham.
• Nine million people are signed up to get content directly from their devices via WhatsApp, newsletters or push notifications. Around 33% of those signups are on WhatsApp.

Digital revenue boost

Reach has a digital audience of 34 million, representing around 50% of the UK population, and is the sixth largest publisher in the country with 120 brands, according to Reach’s press materials. It has been working toward becoming “a data-driven, digitally-focused business” and 2024 saw a return to digital growth with digital revenue up 2.3% supported by a strong fourth quarter, including sales from the OK Beauty Box advent calendar, which sold out before December, and affiliate links over the Black Friday trading period.

Mullen described 2024 as the year where the company saw “opportunities become more tangible with non-advertising revenue including e-commerce and affiliates both growing steadily.”

Data-driven digital revenues now make up 45% of Reach’s total digital revenues, an increase of 2% compared to last year. Reach’s Customer Value Strategy (CVS), which asks users to share some of their personal information—such as email address or postcode—and then monetizes this data for the benefit of advertising partners, has played a role in driving this revenue increase.

Even though Reach’s focus is on digital, Mullen highlights that the company “can’t escape from print’s structural decline,” but it is still “a valuable part” of the business. Print represented 76% of Reach’s revenue for the year, while digital made up 24%. Reach is home to more than 100 local news brands as well as UK tabloids such as The Star and The Mirror. Print revenue declined 7.3% to £407 million ($518 million) from £439 million ($559 million).

Areas for growth

Reach is also no longer just a UK brand. It has been expanding into the U.S. as AMO has previously reported. It now has a readership of 30 million in the U.S. across three titles: The Mirror US, Express US and Irish Star. Audience growth in the country was 9% year-over-year.

Google Discover has become an important referral source for the brand over the past year, but Mullen noted the importance of diversified distribution channels and direct channels such as newsletters and WhatsApp.

Reach’s proprietary ad tech platform Mantis, where AI plays a significant role by recommending content based on readers’ history, is now being sold as a B2B product and has already secured deals with the UK’s LadBible and Australia’s Media9.

Mullen noted users’ frustrations with the experience on Reach’s websites, which are often cluttered with ads and are slow to load. Reach rolled out a new platform to deal with latency issues which has been introduced to titles such as the Liverpool Echo and Manchester Evening News and will be implemented across most of Reach’s digital estate by the end of the year.

The fourth quarter was “a stand out,” said Mullen, but he is taking a prudent view for growth expectations for the year ahead.

“We remain focused on delivering our Customer Value Strategy, optimizing our print assets, controlling our costs and managing our cash to continue building a more sustainable business for the future,” Reach said in a statement, noting expectations of further digital growth and a reduction of adjusted operating costs of between 4% to 5%.

Shares of Reach PLC were down a little over 0.5% in London on Tuesday.