Reach PLC Reports Statutory Loss Amid Major Impairment, But Underlying Profit Grows and Dividend Holds Steady

Reach PLC FY2025: profit up on an adjusted basis, big paper loss from impairment, dividend held

Reach plc has posted a very mixed set of full-year numbers for 2025. Under the bonnet, profitability and cash discipline improved. On the face of it, the statutory result shows a large loss after a sizeable non-cash impairment. The dividend is maintained.

Why the statutory loss isn’t the whole story

The headline statutory operating loss of £160.1m is driven by a £222.8m impairment (non-cash). Management has reset long‑term assumptions given weaker referral traffic – notably a 46% year-on-year drop from Google in H2 – and a tougher macro backdrop. That’s cautious but sensible accounting. It doesn’t hit cash, but it does tell you management expects lower long‑term growth than before (the long‑term growth rate used in testing moved to -2.3%).

On an adjusted basis – which strips out that impairment, restructuring and pension finance costs – Reach actually improved. Adjusted operating profit rose 2.4% to £104.7m, and the margin climbed to 20.2% thanks to a 5.2% reduction in operating costs, ahead of the 4‑5% target. That is real progress.

Revenue mix: print reliable, digital resilient but under pressure

• Total revenue fell 3.7% to £518.4m.
• Print revenue: £388.1m (-4.6%). Within that, circulation was relatively steady at £288.4m (-3.4%) as cover price increases offset volume decline. Print advertising fell 14.8%, in line with weaker volumes.
• Digital revenue: £128.9m (-0.9%). On‑platform page views fell 8% for the year, but revenue per thousand page views (RPM) rose 8% as monetisation improved.
• Digital direct revenue (sold directly to advertisers or consumers) declined 5.9%; diversified streams within that – subscriptions, affiliates, ecommerce and partnerships – grew 4.5%.
• Digital indirect revenue (programmatic and off‑platform) grew 2.8% for the year, although Q4 saw an 8.4% decline as referral volumes tightened.

Q4 told the story of the year’s endgame: Group revenue down 5.6%, digital down 7.8% as the Google hit bit harder, and print down 4.7% but still steady.

Strategy check-in: video, subscriptions and off‑platform distribution

Management has leaned into three priorities – connecting with audiences, accelerating tech and AI, and diversifying revenues – and there’s evidence of execution:

• Video push: over 100 new specialist video roles, around 300 social videos a day, and franchises such as All Out Football and the Daily Expresso show. Social/off‑platform traction is improving, with off‑platform page views up 20% and social referrals to Reach’s sites up 21% (H225 vs H224). Direct video, social video and sponsorship posted strong double‑digit revenue growth, although total video revenue dipped 3% due to weaker programmatic.
• Subscriptions: six launches so far (including the Manchester Evening News and the Express), offering ad‑lite access and exclusives. About 15,000 subscribers at year end, plus 17,000 e‑edition subscribers, with a target of more than 75,000 subscribers in 2026.
• AI and tech: in‑house tools like Guten now support 26% of articles and Google Gemini has high adoption (>40% frequent users). A pay‑per‑usage AI content deal with Amazon AWS introduces a new recurring revenue stream; further platform discussions are ongoing.

This is the right kind of diversification for a publisher whose on‑platform volumes have been dented by search algorithm changes. The early signals (off‑platform growth, sponsor-led video, and subscriber uptake) are encouraging, but we’ll need to see revenue scale through 2026.