Reach (LON:RCH) said first-half revenue fell as lower referral traffic, particularly from Google, continued to weigh on digital audiences, but the publisher maintained that it remains on track to deliver full-year profit in line with market expectations.
Chief Executive Piers North told investors that the period was marked by “significant external change,” including a 40% decline in on-platform page views. He said Reach had partially mitigated that decline through growth in priority areas, leaving digital revenue down 11% rather than in line with the steeper fall in page views.
Revenue falls, but margins improve
Chief Financial Officer Darren Fisher said group revenue declined 9%, or £23 million, to £233 million in the first half of 2026. Digital revenue fell 11% to £54 million, while print revenue declined 8% to £178 million, representing about three-quarters of total revenue.
Adjusted operating profit decreased 4%, or £2 million, to £43 million. Fisher said adjusted operating costs were reduced by 10%, ahead of the company’s previous 5% to 6% target, helping lift adjusted operating margin by one percentage point to 18.5%.
Reach reported adjusted operating cash flow of £49 million and cash conversion of 113%. Net debt stood at £48 million at the end of the period. Fisher said the company continues to take a prudent approach to leverage, which was 0.4 times EBITDA, with a target of remaining below 1 times.
The company reduced its interim dividend to 1.4 pence per share. Fisher said the decision was intended to rebalance capital toward organic investments, including brand development, subscriptions and new technology platforms.
Digital strategy shifts away from referral traffic
Reach said the sharp decline in browser-based page views was mainly due to lower referrals from Google. Fisher said the pressure hurt the company’s volume-sensitive programmatic advertising business, with indirect digital revenue down 16%.
Direct digital revenue declined 4%, partly due to a decision to focus the local advertising business on higher-quality revenue. Excluding local revenue, direct revenue grew 6%, supported by video and agency work. Fisher said diversified products, including premium subscriptions, affiliates, e-commerce and partnerships, grew 2.5%.
North said on-platform audiences had stabilized over the prior 100 days, but the company is assuming referral volumes are unlikely to recover. He said Reach is focusing on original content, paid subscriptions, video, social engagement, off-platform distribution and AI licensing.
North said Reach still reaches two-thirds of the U.K. online population and that 35 million U.K. adults engage with its content each month. He also said social video views were up 55% from a year earlier and social followers were up 15%.
Subscriptions and video remain growth priorities
Reach has rolled out paid subscriptions across 15 sites and has secured more than 40,000 subscribers, North said. The company remains on track for its year-end target of 75,000 subscribers.
North said the company is still in the early stages of building the subscription proposition and plans further product and marketing investment. In response to an analyst question, he said Reach had “launched subscriptions” but, in practical terms, had initially launched paywalls, with work still needed to improve conversion through features such as Apple Pay and Google Wallet.
The company also plans to test new subscription-based community brands around smaller legacy print titles, including The Southport Visiter, Ayrshire Post and The Journal in the Northeast of England.
Video was highlighted as another area of momentum. North said studio revenue rose 70%, citing work with brands including Nestlé, NordVPN, Scottish Water and Pure Gold. He said stronger video capabilities are helping Reach attract larger commercial briefs and new advertisers.
AI licensing and technology investment
North said Reach is increasingly optimistic about AI licensing opportunities. He referenced the company’s March deal with Amazon, which he said is now generating ongoing revenue, and said Reach is close to agreeing terms with some of the largest businesses in the AI space during the second half.
He said the company is also working with a financial services business to provide contextual content for data and clients, and is developing real-time content marketplaces with Amazon Web Services and Tollbit. North described these as models that could allow Reach to be paid small amounts at high volume when AI bots use its content.
Reach is also rolling out Launchpad, an AI-powered publishing platform that North said brings together in-house tools to support editorial teams with tasks such as headline options, content ideas, archive images, editing and video uploads.
North said the company is investing £9 million during the year in video capabilities, technology and brands.
Print consolidation ahead of plan
Print revenue continued to decline, with circulation revenue pressured by higher volume declines. Fisher said circulation volumes fell 23% in the second quarter, above the company’s normal decline range of 17% to 20%. He said the company believes this reflects a combination of its latest cover price increase and continued cost-of-living pressure on readers.
In response to a question from Gareth Davies of Deutsche Numis, Fisher said the circulation weakness was primarily in national titles. He said Reach is likely to proceed with the next cover price increase to gather another data point before deciding whether to change its approach for 2027.
Print advertising revenue declined 11% but continued to outperform volume trends, supported by food retail advertising, including World Cup-related spending, and government spending.
Reach said its plan to consolidate print operations and close two printing facilities is progressing ahead of schedule, with savings tracking ahead of plan. The Saltire site in Scotland has been closed, with much of its printing moved to Oldham and the remainder covered by outsourcing agreements. The transfer of southern titles to the Broxbourne site was also completed.
The company reiterated that the closures are expected to create a one-off cash cost of about £25 million, mainly severance, with most of the cost payable in the second half. The Saltire and Watford sites are expected to be marketed for sale in 2026, with disposals targeted for 2027.
Looking ahead, Fisher said Reach retains a cautious outlook for both digital and print. He said the company expects to deliver around 10% operational cost savings in the second half and remains on track for profit in line with market expectations, despite revenue headwinds.
Fisher also said Reach is in the penultimate year of material pension payments, with contributions expected to total £57 million in 2026 and step down materially in 2028. He described the next 18 months as a “bridging period” requiring continued financial discipline.
About Reach (LON:RCH)
Reach plc is the UK’s and Ireland’s largest commercial news publisher. It is home to over 120 trusted brands, from national titles like the Mirror, Express, Daily Record and Daily Star, to local brands like MyLondon, BelfastLive and the Manchester Evening News.
With a purpose to enlighten, empower and entertain through brilliant journalism, these brands deliver the latest news, entertainment and sport to communities throughout the UK and Ireland and around the world every day. It’s proudly mainstream and each trusted title is a platform to represent and campaign for the voices of the communities they serve and to hold power to account.
Reach is transforming how it delivers value to stakeholders, evolving and growing a digitally-focused business while maintaining strong foundations in print.
