Mirror, Express and Star publisher Reach has revealed plans to push reader registrations online to “accelerate” digital revenue growth.
The company said currently less than two per cent of its readers are registered users “largely because we have not asked for it”.
Under a new strategy the company is targeting 7m registered customers by the end of 2022, compared to less than 1m at the end of last year.
Reach, which is the largest commercial news publisher in the UK, grew digital revenues by 13.2 per cent to £107m in 2019, new figures show.
The company reported adjusted revenues down by three per cent to £702.5m for the year, according to accounts filed with Companies House.
The majority of Reach’s revenue (84 per cent) still comes from print, which made £591.3m in 2019, after a fall of five per cent year-on-year.
Reach reported adjusted pre-tax profits of £150.6m in 2019, up six per cent year-on-year. Adjusted operating profit grew by five per cent to £153.4m.
Chief executive Jim Mullen (pictured), who took over from Simon Fox in August, said the company had shown “strong foundations on which to invest and innovate to ensure a sustainable future for our trusted brands”.
Mullen, a former News International (now News UK) director of digital strategy, said: “Content is at the heart of the new customer value strategy we are announcing today.
“We have an unmatched reach in UK media and will deepen our relationships via increased customer engagement.
“Through this, we see significant potential to accelerate the diversification of our digital revenue and capture more value to deliver on our sustainable digital growth ambitions.”
The results are the first to cover a full year since Reach bought the Daily Express, Daily Star, Sunday Express and Daily Star Sunday from Richard Desmond’s Northern and Shell in a deal worth £127m in February 2018.
Mullen said a “refocus on operational management” after the Express and Star titles were integrated into the company had led to an “improved operating margin and profitability”.
The company said it had made “significant cost efficiencies” last year, including £12m in structural cost savings and “incremental acquisition synergies” of £16m, with a number of staffing cuts last year.
But Reach is still paying out millions each year to settle phone hacking claims, with an increase in its provision of £11m last year.
The total amount spent on these cases since 2014 has now reached £86.5m, with £21.1m of the provision outstanding – the current best estimate of the amount still required to settle expected claims.
Expanding on the new registration strategy, Mullen said Reach is the fifth biggest digital asset in the UK after Google, Facebook, Amazon and Microsoft with an online reach of 40m.
He estimated that more than 90 per cent of customers in the top four digital content providers have signed up and provided their data, allowing those firms “to develop strong commercial offerings”.
Reach has not pushed readers to register with an email address to read its news websites, including the Mirror, Express and Star, all of which are free to read, instead chasing scale and advertising revenues.
“This highlights the initial opportunities we have and the very significant growth potential we see,” Mullen said.
“Increased customer engagement will come from driving registration by engaging customers on key verticals and getting a better understanding of their behaviours and top interests.
“This increase in registered users will enable us to better personalise our offering and introduce these customers to new products and services.”
Reach’s print revenue is now divided between 61.2 per cent from circulation and 38.8 per cent from advertising.
A 4.5 per cent drop in circulation revenue was “part-mitigated” by cover price increases and “availability investment”, the company said.
Advertising decline of 19.4 per cent was impacted by an agreed reduction in Health Lottery advertising as part of the Express and Star acquisition and the absence of the World Cup, which had an impact in 2018.
Mullen also said Reach would continue to consider merger and acquisition opportunities going forward.
“These opportunities could be to provide further industry consolidation, increase our digital footprint or audience scale, develop our product set or to monetise our existing audience,” he said.
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