Reach plc (LSE:RCH) reported revenue of £232.9 million for the six months ended 30 June 2026, a 9% decline from the previous year as both its print and digital businesses continued to face challenging market conditions. Print revenue fell 8.3%, reflecting lower newspaper circulation, although advertising and circulation income proved more resilient than the decline in volumes. Digital revenue dropped 11.4%, largely due to reduced referral traffic from Google, which contributed to a 40% fall in on-platform page views.
Cost savings protect profitability
Despite the lower revenue base, adjusted operating profit slipped only modestly to £43 million, while the adjusted operating margin improved to 18.5%. The performance was supported by a 10.3% reduction in operating costs following restructuring initiatives and the continued rationalisation of the company’s print production network.
On a statutory basis, Reach recorded an operating loss of £43.5 million, reflecting non-cash impairment charges associated with print site closures, the amortisation of publishing rights and newspaper titles, together with higher restructuring costs.
Strong cash generation improves financial flexibility
The publisher generated adjusted operating cash flow of £48.8 million during the period, with cash conversion reaching 113%. Net debt declined to £47.5 million, leaving leverage at just 0.4 times.
Reach also reported an improvement in its defined benefit pension scheme, which moved into a small IAS 19 surplus. Deficit reduction payments are expected to reduce over the coming years before ending in 2028, providing additional flexibility for future capital allocation.
Focus shifts towards digital growth
The company has reset its dividend policy, reducing the interim dividend to 1.44 pence per share in order to direct more capital towards investment in digital products, subscriptions and video content.
Management said the strategy is designed to reduce reliance on referral traffic from search engines by increasing direct audience engagement and expanding higher-value digital revenue streams. The group is also exploring the use of artificial intelligence tools and potential AI licensing opportunities to support long-term revenue diversification while maintaining disciplined cost control.
Reach expects to meet market expectations for the 2026 financial year and anticipates operating margins will remain broadly stable during 2027 despite ongoing structural pressures in the publishing industry.
Investment outlook
Reach’s valuation remains attractive, supported by a relatively low price-to-earnings ratio and a high dividend yield. However, this is offset by long-term revenue declines, weaker operating fundamentals and the significant statutory loss reported during the period.
Technical indicators also remain weak despite oversold conditions, suggesting investors continue to take a cautious view of the group’s transformation strategy.
About Reach
Reach plc is the largest commercial news publisher in the UK and Ireland, operating around 120 national, regional and digital media brands, including the Mirror, Express, Daily Record, Daily Star and a wide range of local news titles. The company reaches more than two-thirds of the UK online population while also serving international audiences through its expanding digital platforms.
Reach generates revenue through a combination of print circulation, advertising, digital publishing, subscriptions and other online services. Its long-term strategy focuses on growing direct digital revenues, expanding video and premium content, improving operational efficiency and reducing reliance on third-party traffic sources, while continuing to manage its legacy print operations and pension commitments.
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