Reach plc Reports Mixed Results: Digital Growth Offsets Print Decline
Why we think this is neutral
Reach plc's 2024 results present a mixed picture. While the company saw a 2.1% growth in digital revenue and an improvement in adjusted operating margin to 19.0%, these positives are balanced against a 5.3% decline in total revenue. The print business continues to face challenges, with a 7.3% decrease in revenue. However, the company's strategic focus on digital growth and cost management has yielded some positive results, with adjusted operating profit increasing by 6.0% to £102.3m. The refinancing of banking facilities provides improved liquidity, but the slight increase in net debt to £14.2m is worth noting. The outlook for 2025 is cautiously optimistic, with expectations of continued digital growth and further cost reductions. While the company faces ongoing challenges in adapting to the shifting media landscape, its efforts to diversify revenue streams and improve operational efficiency provide some stability.
Key Points
- Total revenue declined 5.3% to £538.6m
- Digital revenue grew 2.1% to £130.0m
- Print revenue decreased 7.3% to £406.7m
- Adjusted operating profit increased 6.0% to £102.3m
- Adjusted operating margin improved from 17.0% to 19.0%
- Net debt increased slightly from £10.1m to £14.2m
- Refinanced banking facilities with £145m revolving credit facility until December 2028
- Expects digital growth and 4-5% reduction in adjusted operating costs for 2025
- Confident in meeting market expectations for the full year
- Encouraging performance reported for first two months of 2025
Summary
Reach plc's 2024 results show a company navigating a challenging media landscape. Total revenue declined 5.3% to £538.6m, primarily due to a 7.3% decrease in print revenue. However, this was partially offset by digital revenue growth of 2.1%. The company's focus on its Customer Value Strategy has paid off, with adjusted operating profit increasing 6.0% to £102.3m and an improved adjusted operating margin of 19.0%. The company has successfully refinanced its banking facilities, extending its revolving credit facility to £145m until December 2028, although net debt increased slightly to £14.2m. Looking ahead, Reach expects continued digital growth and plans to reduce adjusted operating costs by 4-5% in 2025. The company remains confident in meeting market expectations for the full year, supported by encouraging performance in the first two months of 2025.