Reach digital income beats expectations

Newspaper and online publisher Reach (LON: RCH) is the best performer in the FTSE Small Cap index with a 23.9% jump to 89.2p. That more than claws back the previous loss this year. Fourth quarter trading was stronger than anticipated.

The Daily Mirror owner benefited from a stronger digital advertising market. Black Friday was positive this year. Fourth quarter growth was around 7% and that improved the second half growth rate to 5%. Digital is still less than one-quarter of revenues, but that will change as it continues to grow and print revenues decline.

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Newspaper trading was in line with expectations. There have also been additional cost savings. Net debt is £22m.

There will be a one-off pension cost of £5m in 2025 due to a past error. There has been refinancing with a £145m revolving credit facility lasting four years.

Panmure Liberum has increased its 2024 pre-tax profit forecast from £94.6m to £98.1m. However, it is maintaining its 2025 figure at £93.2m, which reflects the added costs of the National Insurance rises. The dividend is expected to continue at 7.34p/share. The shares are trading on four times prospective earnings and yield 8.2%.

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