Reach (RCH) H1 2024 earnings summary

Executive summary

• Delivered solid operational and strategic progress in H1 2024, with resilience in both print and digital segments and strong cost management driving results.

• Digital transformation advanced, with digital revenue stabilizing and returning to 7% growth in Q2, and digital yield increasing over 30% year-over-year.

• Customer Value Strategy underpinned 9% growth in data-driven digital revenues, now 45% of digital revenue, and improved yield.

• Print circulation and advertising outperformed structural volume declines, supported by impactful journalism and a growing secure audience.

• Adjusted operating profit rose 23.1% to £44.5m, with margin improving to 16.8% from 12.9% due to effective cost management and restructuring.

Financial highlights

• Revenue for H1 2024 was £265m (down 5.2% year-over-year); digital revenue £60m (down 1.3%), print revenue £204m (down 6.1%).

• Adjusted operating profit: £44.5m (up 23.1%); adjusted operating margin: 16.8% (up from 12.9%).

• Adjusted EPS: 10.1p (up 16.1%); interim dividend maintained at 2.88p per share.

• Adjusted operating costs reduced by 9.3% to £221.8m, mainly from restructuring and lower newsprint costs.

• Net debt at period end: £12.3m, with strong cash conversion at 130% and adjusted operating cash flow of £58m.

Outlook and guidance

• On track to deliver full-year market expectations, with consensus adjusted operating profit at £97.8m.

• Cost reductions trending ahead of the 5-6% target; profitability expected to be more balanced between H1 and H2.

• Capital expenditure and pension contributions to remain broadly in line with 2023 (£15m capex, £60m pension).

• Print performance expected to remain resilient; digital revenue growth to continue, supported by improved yield and data-driven strategy.

• Group remains confident in 2024 outlook, with Customer Value Strategy driving resilience and diversification.