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October 11, 2022updated 13 Dec 2022 1:08pm

Reach reveals impact of Queen advertising blackout as CFO departs

By Charlotte Tobitt

Reach has revealed the extent to which an advertising blackout in the wake of the Queen’s death in September “significantly reduced” revenue in both print and digital.

The insight came as chief financial officer Simon Fuller “mutually agreed” with the company to step down on 31 December. He will be succeeded by Darren Fisher, who is joining from ITV where he is group director of finance and divisional chief financial officer for the media and entertainment division.

The Daily Express and Daily Mirror grew their aggregate print circulations by around 30% on the day following the Queen’s death, Friday 9 September, and the day after her funeral, Tuesday 20 September.

Daily Express executive editor Karl Holbrook previously said that his newspaper sold 75% more copies than usual on the day after her death.

Total circulation across Reach’s national and regional newspapers was up by 4.3% overall in September due to this uplift.

However Reach said in its Q3 trading update on Tuesday that this growth in sales was “more than offset” by the hit to print advertising revenue, which was down by 32.2% in September compared to 17% in July and August.

Therefore overall print revenue at Reach declined by 2.9% year-on-year across the quarter.

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However circulation revenues in the whole of Q3 were up by 2%, with a swathe of cover price increases implemented.

For example the UK editions of the Sunday Mirror and People rose from £2 to £2.10 on 3 July, while weekday editions of the Daily Mirror in England, Wales and Northern Ireland rose from £1 to £1.10 and in Scotland from £1.10 to £1.20 from 1 August, with Saturday editions increasing to £1.80 across the UK. The National Federation of Retail Newsagents repeatedly criticised the company for reducing retailers’ profit margins.

In digital, revenue was up by 5.9% in July and August which the company said “reflects ongoing momentum in data-led initiatives, continued growth in page views (6% across the period) and stabilisation in comparative programmatic yields as Q2 headwinds moderated”.

Reach had set a target of reaching 10m registered users by the end of 2022 but it met this early in the year. It has now reached 12m.

In September, however, digital revenue declined by 8.1% as brands deferred or cancelled ad campaigns during the 11-day period of national mourning for the Queen.

Despite the hit to ads in print and digital in September, the company said it expected an uplift for the final part of the year, traditionally the strongest for advertising.

The trading update said: “We expect circulation revenue to be supported by increased cover prices, while advertising revenue should benefit from seasonally stronger yields, particularly around Black Friday and Christmas and from the football World Cup which starts in November.”

Chief executive Jim Mullen said: “I am particularly proud of our teams who worked so tirelessly over recent weeks to produce such comprehensive, respectful, and sensitive coverage of the Queen’s passing, a truly once in a generation event.

“Actions on costs are helping to mitigate inflationary pressures and while macro uncertainty persists, improved revenue trends during Q3 are a positive. The strength of our balance sheet underpins ongoing investment in the strategy, as we continue to transition to an increasing mix of higher quality digital earnings.

Chartered accountant Fuller, who will have a period of gardening leave after his departure, has been chief financial officer at Reach since March 2019 and Mullen praised him for “helping to steer the business through the pandemic”. Fuller had a total remuneration package of £3.4m in 2021, with a base salary of £451,000.

Picture: Rasid Necati Aslim/Anadolu Agency via Getty Images

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