A 5.3 per cent dip in like-for-like revenue might not sound like good news, but for publishing group Reach (RCH) this was its slowest rate of sales decline since 2014. Benefiting from £12m in efficiency savings and £16m in synergies from its 2018 acquisition of Express & Star, the adjusted operating profit margin expanded by 1.7 percentage points to 21.8 per cent in 2019. Meanwhile, statutory earnings swung back into the black.
Circulation volumes for national daily titles continued to fall, with a 13 per cent reduction exceeding the 10 per cent decline in the wider UK tabloid market. But higher cover prices narrowed the decrease in circulation revenue from 5.1 per cent to 4.5 per cent, giving a total of £362m. Circulation revenue accounts for more than half of total sales.
By contrast, digital revenue jumped 13.2 per cent on a like-for-like basis to £107m as the UK monthly online audience grew by 8 per cent to 40m people. Reach is looking to better monetise its digital footprint by shifting from generalised to targeted advertising. It is aiming to collect more customer data by increasing the number of registered online users from just under 1m to 7m by the end of 2022.
Numis expects adjusted pre-tax profit of £141.8m and EPS of 39.3p in 2020, down from £150.6m and 41.1p in 2019.
| REACH (RCH) | ||||
| ORD PRICE: | 170p | MARKET VALUE: | £510m | |
| TOUCH: | 170-176p | 12-MONTH HIGH: | 175p | LOW: 58p |
| DIVIDEND YIELD: | 3.8% | PE RATIO: | 5 | |
| NET ASSET VALUE: | 212p* | NET CASH: | £20.4m | |
| Year to 30 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 593 | 67.2 | 33.9 | 5.15 |
| 2016 | 713 | 76.5 | 24.9 | 5.45 |
| 2017 | 623 | 81.9 | 23.0 | 5.80 |
| 2018 | 724 | -120 | -41.0 | 6.14 |
| 2019** | 703 | 121 | 31.8 | 6.55 |
| % change | -3 | - | - | +7 |
| Ex-div: | 10 May | |||
| Payment: | 5 Jun | |||
| *Includes intangible assets of £852m, or 285p a share. **52 weeks to 29 Dec. | ||||
