A like-for-like sales contraction of 6.3 per cent might not sound like good news, but for Reach (RCH) this first-half performance represented a considerable improvement on the decline of 7.2 per cent seen a year earlier.
The group cited resilient circulation revenues, which dipped by just 3.9 per cent. By contrast, like-for-like sales of advertising – a “more structurally challenged” area – fell by 21.1 per cent. Overall, like-for-like group print sales were down 8.2 per cent.
Meanwhile, like-for-like revenues for digital – which are fuelled largely by page views – rose 9.7 per cent. Average monthly page views increased by 16 per cent to 1.2bn. This was driven by greater mobile engagement; desktop page views fell by 9 per cent.
The group delivered £6m in cost savings from the integration of the Express & Star titles. It now targets annualised savings of at least £22m in 2020 – up from its earlier ambition of £20m. Good operating cash generation led to a reduction of more than two-thirds in net debt against the year-end, to £12.9m.
Broker Peel Hunt expects adjusted EPS of 39p for 2019, flat on 2018.
| REACH (RCH) | ||||
| ORD PRICE: | 84.6p | MARKET VALUE: | £253m | |
| TOUCH: | 83.6-84.6 | 12-MONTH HIGH: | 91p | LOW: 54p |
| DIVIDEND YIELD: | 7.4% | PE RATIO: | 6 | |
| NET ASSET VALUE: | 193p* | NET DEBT: | 2% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 354 | -114 | -39.4 | 2.37 |
| 2019 | 353 | 58.2 | 15.9 | 2.50 |
| % change | -0.3 | - | - | +5 |
| Ex-div: | 05 Sep | |||
| Payment: | 27 Sep | |||
| *Includes intangible assets of £852m, or 285p a share | ||||
