Reach H2 Earnings Call Highlights

Reach (LON:RCH) reported a year of higher profits and ongoing strategic change in its full-year 2025 results presentation, while management highlighted a sharply more volatile digital referral environment in the second half of the year—driven largely by changes at Google—that has carried into the start of 2026.

Chief Executive Officer Piers North said the company delivered “growing profits” and an operating margin of “over 20%” during what he described as a busy first year in the role. He pointed to progress against three strategic priorities laid out in July—expanding video, accelerating the use of technology and AI, and diversifying revenue with subscriptions—alongside operational actions across pensions and printing.

Financial performance: profits rise as revenue declines

Chief Financial Officer Darren Fisher said Reach delivered “a strong set of financial results despite the challenging market conditions,” citing cost discipline, strong cash conversion, and a higher operating profit.

• Revenue: GBP 518 million, down GBP 20 million (a 3.7% decline).
• Digital revenue: GBP 129 million, down 0.9%.
• Print revenue: GBP 388 million, down 4.6% and representing 75% of total revenue.
• Operating profit: GBP 105 million, up 2.4% (GBP 3 million).
• Adjusted operating margin: 20%, up 1 percentage point.
• Adjusted operating cash flow: GBP 104 million; cash conversion was 99%.
• Net debt: GBP 35 million at year-end.
• Dividend: maintained at 7.34 pence per share for the year.

Fisher also noted Reach reduced adjusted operating costs by 5.2%, ahead of the 4%–5% range previously guided.

Digital: Google referral changes hit page views, but indirect revenue grew

Management emphasized that digital performance in 2025 was heavily influenced by changes in referral traffic, particularly in the second half. Fisher said on-platform page views grew 6% in the first half, but a “sharp decline in referral traffic, mainly Google” in the second half left on-platform page views down 8% for the full year, which “adversely” affected the company’s volume-driven programmatic business.

Reach now reports digital revenue in two categories—direct and indirect. Direct revenues (advertising or commercial revenues generated through direct engagement with advertisers, agencies, or consumers) fell 5.9%, with Fisher citing macroeconomic pressure, “in particular impacting our local advertising business.” Within direct revenues, diversified products such as premium subscriptions, affiliates, e-commerce, and partnerships grew 4.5%, driven by e-commerce—especially OK! Beauty Box—while “early indicators for subscriptions have been positive,” with six brands live.

Indirect revenues (largely programmatic) grew 2.8% in 2025. Fisher said Reach is placing increased emphasis on off-platform consumption across social platforms such as YouTube and Facebook, adding that monetization has improved and platforms are “increasingly rewarding engaging content.” North later said Reach’s global social audience is now over 110 million across platforms including YouTube, TikTok, Facebook, WhatsApp.

North provided more detail on Google’s impact, describing Discover as the bigger issue for publishers than Search. He said Google referrals fell by nearly 50% and now represent about 35% of Reach’s on-platform audience. He added that Google has been prioritizing more user-generated content, citing Reddit, and its own networks such as YouTube Shorts, and called Google “famously opaque.”

At the same time, North said Reach increased traffic from social sources, with referrals from Facebook and WhatsApp up 21% and accounting for nearly a third of traffic. Off-platform viewing was up 20% year-over-year, and he said Reach is managing the business on the assumption that on-platform volume “will not return to its former heights” in the short term.

Print: cover price actions offset steep volume declines; print sites to close

Print revenue declined 4.6% to GBP 388 million. Fisher said circulation revenue—just over half of total print revenue—fell 3.4% as Reach implemented three cover price increases during the year, which he said offset “the majority” of a 19% volume decline. Print advertising fell 14.8%, while printing and other print rose 2.6% due to one-off products such as football souvenir editions, which Fisher said are not expected to repeat.

Both executives reiterated that print remains meaningful to group cash generation but is in structural decline. Fisher said Reach is “laser focused” on the value exchange for readers to support cover price increases through content, offers, and promotional activity. In Q&A, he said management believes the company can continue to use price as “a lever to manage our print decline,” pointing to consistent revenue declines averaging 2.1% over the past three years.

Operationally, Fisher said Reach announced “complex changes” to its print operating model, including the closure of the Saltire and Watford print sites in favor of improved utilization of the Oldham site and outsourcing arrangements. North said the aim is to extend the life of the remaining facility, create more certainty around print costs, and remove operational risk tied to large and aging sites, allowing a stronger focus on digital priorities. The company expects a one-off cash cost of around GBP 25 million in 2026 related mainly to severance.

Pensions, cash use, and 2026 outlook

Fisher said Reach worked with the Trinity Retirement Benefit Scheme (TRBS), which completed a buy-in on 12 February, with member benefits now fully insured. He said pension payments totaled GBP 64 million in 2025, and noted restructuring outflows of GBP 23 million tied mainly to people changes. Reach also paid GBP 4 million related to the settlement of historic legal issues, and Fisher said the company expects to pay the remaining GBP 5 million during 2026.

Looking ahead, Fisher said the company is “on track to deliver in line with market expectations,” while warning that a volatile referral environment is expected to continue into 2026. Reach expects to reduce total operating costs by 5%–6% in 2026, partially supported by the printing changes. Pension contributions in 2026 and 2027 are expected to be GBP 9 million lower due to the TRBS buy-in, though Fisher noted a 25% tax charge as pension relief falls away.

On leverage, Fisher said it is currently 0.3 times EBITDA and the company does not expect it to exceed 1 time. He also noted the company extended its GBP 145 million revolving credit facility to December 2029.

In response to an analyst question about the pace of Google changes, North said the decline was not a “cliff edge” but rather “a general degradation since sort of the summer period,” with tough comparisons likely until the summer and autumn.

On subscriptions, North said Reach moved quickly from July’s plan to a first launch at the Manchester Evening News four months later, and has now rolled out to six titles including the Express and WalesOnline. As of year-end, Reach had around 15,000 paid subscribers, which includes legacy subscribers from earlier experiments, plus new paid customers, and separately has 17,000 e-edition subscribers. The company expects “at least 75,000 paid subscribers by the end of the year” and plans to add four more titles by the end of March, including Birmingham and Belfast Live.

North also highlighted AI initiatives including a rollout of Google Gemini across the business, saying around half of employees use it on a given day. He said the company is testing a “content score” in beta in newsrooms to translate multiple performance metrics into a single score to support real-time editorial decisions. He also said Reach has agreed a deal with Amazon under which its content supports Alexa answers, describing it as usage-based rather than a flat fee, and said the company is in discussions with other platforms regarding fair value for content used by AI models.

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.