Reach now employs more journalists than it did in 2019, despite hundreds of jobs lost in a restructuring programme last year.
By the end of this year it will in fact be employing more journalists than it has for a decade, chief executive Jim Mullen (pictured) revealed on Tuesday. This figure will be about 10% more than it employed at the end of 2019.
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In 2019, Reach employed 2,598 journalists and editorial staff across its 150 national and regional press brands, which include the Mirror, Express and Star titles and the Liverpool Echo and Manchester Evening News.
The UK’s largest commercial publisher said it committed an extra £20m in 2020 and 2021 towards 14 investment projects to boost journalism, data and technology.
One example was My London, which launched in December 2018 and at the start of this year had 20 journalists covering mainly lifestyle stories. It now employs 55 journalists and has a broader range of coverage encompassing every London borough as well as transport, courts and local democracy. It has also hired its first race and diversity correspondent.
Reach last week announced 28 jobs at its its Scotland-based editorial operations with new Scottish Express and Aberdeen Live sites and a relaunched Football Scotland, while more than 70 sports journalism jobs are being created across the UK this summer.
The publisher’s mission to cover every county in England and Wales by the end of the year is also on track, with online newsbrands launching to cover Norfolk, Darlington, Dorset and Shropshire this week.
Last summer, Reach cut about 550 roles – around 12% of its workforce – to deliver savings of £35m a year at a one-off cost of £20m.
Mullen said the future prospects for the group are “better than for many years” thanks to strong growth in digital advertising and the growing momentum behind the customer value strategy of asking users to register with their email.
Registrations are now at 6.7m, 150% higher than a year ago, and the company is confident of reaching its target of 10m by the end of 2022.
Most registrations in the first half of this year came from Reach’s more than 300 newsletters and the local news aggregator InYourArea.
Newsletter readers consume three to six times more content than an unregistered customer, Reach found. Its newsletters drove 8m page views in January 2020, 22m in January this year and more than 47m this May.
The publisher’s half-year results published on Tuesday showed digital now makes up 23% of the business, up from 15% in 2019 and 17% in the first half of 2020.
Its digital revenue of £69m (following growth of 41% compared with 2019) is now roughly 37% bigger than its print advertising.
Following last year’s historic page views across the industry as readers sought out trusted Covid-19 news, Reach still managed to grow its page views by 1% this half-year, while its loyal users were up 30%.
‘Clear pathway to sustainable growth’
Mullen said: “Reach is transforming its prospects and with strong momentum in the customer value strategy we now have a clear pathway to sustainable growth.
“Our people continue to deliver on our core purpose as champions, campaigners and changemakers. Award-winning national and local journalism is delivering consistently higher audience engagement, supported by increased customer insight.
“As a result, we have been able to increase investment in journalism and the applied data technology that is key to us achieving our ambition of doubling digital growth over the medium term.”
The company said efficiencies driven by last year’s transformation programme “will continue to support increased digital investment, further expansion of our profit margin and a strong cash position”.
Adjusted group revenue increased by £11.5m, or 4% year-on-year, to £302m, which Reach said was driven by digital revenue growth fully mitigating print revenue decline.
On a two-year basis, comparing with 2019 instead of the pandemic-hit 2020, revenue was down 34% – staying fairly consistent with the 36% two-year rate of decline in the second half of 2020.
Print revenue of £232m was down 24% compared with 2019 and print circulation of £160m was down 16%. Reach said circulation “continues to demonstrate resilience and post-lockdown recovery” with growth seen in Q2 this year as the UK’s lockdowns eased.
Mullen said overall circulation decline is stable on a two-year view, trending back to historic norms. A circulation revenue decline rate of around mid-single digits is expected from the second half of this year.
[Read more: Latest national newspaper ABC circulation figures]
Reach reported an adjusted profit before tax for the half year of £68m, compared with £54m in the same period of 2020. Adjusted operating profit was £69m compared with £55m last year.
Meanwhile, its operating margin now stands at 23%, up from 19% last
Costs remained flat, despite last year’s being suppressed by factors including temporary salary reductions, furlough, bonus suspension and discretionary cost removal.
The implementation of Reach’s new home and hub model, reducing its number of offices to 15 with most staff in a hybrid working pattern, resulted in charges of £24m. Annual savings of £8m are expected as a result.
In addition, phone-hacking cost provisions were increased by £13m. Chief financial officer Simon Fuller said these costs “are very manageable in the context of our cash generation and will continue to be professionally dealt with”.
Some £32m remains in a pot to spend on hacking costs and is the current best estimate of the amount required to resolve the matter over the next few years.
Mullen told investors Reach is “now on a path to long-term sustainable growth.
“We are investing in national, regional and local journalism and content, as
well as in the data capabilities that will accelerate our progress.
“In doing so we are supported by our efficient operating model that ensures
strong cash flows. This gives us the flexibility to invest and grow the business. The prospects for Reach are transforming.”
Journalists’ efforts not ‘fully reciprocated’
The National Union of Journalists said its members deserved more reward for the success of the company following their hard work during the pandemic.
It said journalists had taken on costs to work from home permanently, which is generating the company savings, and pointed to shareholder payouts and a growing cash “cushion”. A 1% pay rise “does not send a message that their efforts are being properly recognised”, it added.
The union said in a statement: “It is good to hear a major publisher put investment in journalism at the heart of its strategy for growth – and this is a realisation that journalists are now very obviously a key driver providing the wealth of Reach plc and its shareholders.”
It added: “The commitment and sacrifices of NUJ members to make the company a success emerging from the Covid crisis has not yet been fully reciprocated in their rewards.”