Reach (RCH) H2 2025 earnings summary

Executive summary

• Delivered strong financial results in 2025, with profit growth and an adjusted operating margin over 20%.

• Completed a complex transformation program, including restructuring, print site consolidation, and a focus on digital priorities such as video, AI integration, and subscriptions.

• Maintained robust cost and cash discipline, with a 5.2% reduction in costs and 99% cash conversion.

• Navigated significant headwinds, notably a sharp decline in Google referral traffic and macroeconomic pressures impacting digital revenues.

• Adjusted operating profit exceeded market expectations.

Financial highlights

• Revenue declined 3.7% year-over-year to £518.4m; digital revenue down 0.9% to £128.9m; print revenue down 4.6% to £388.1m.

• Adjusted operating profit rose to £104.7m (up £2.4m), with margin improving to 20.2%.

• Adjusted EPS increased to 26.8p from 25.3p; dividend per share maintained at 7.34p.

• Net debt at year-end was £34.9m, with a £145m revolving credit facility extended to December 2029.

• Operating costs reduced by 5.2% year-over-year, ahead of target.

Outlook and guidance

• On track to deliver in line with market expectations for 2026, with consensus adjusted operating profit at £96.4m, despite ongoing volatility in referral traffic.

• Targeting a further 5%-6% reduction in operating costs in 2026, supported by print site closures.

• Pension contributions to reduce by £9m in 2026/27 due to successful buy-in; majority of pension commitments expected to unwind by 2028.

• Capital expenditure expected to remain similar to 2025; no significant property disposals anticipated in 2026.