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(Alliance News) - Reach PLC on Tuesday said revenue was down significantly in its second quarter due to lower circulation and advertising and the company is now implementing its transformation plans which include cutting 12% of its workforce.
The commercial national and regional news publisher said revenue was down 28% in its second quarter ended June 28 compared to the same quarter of financial 2019. This included a 30% drop in print revenue and 15% digital revenue drop.
At present, circulation is still well below pre-pandemic levels and local advertising has remained challenging. Year-to-date revenue to June 28 was 18% lower, helped by a good start before Covid-19.
In June alone, revenue wad down 24% compared to 31% in April, demonstrating "modest but encouraging improvements in circulation and national digital revenue" as lockdown restrictions eased.
"Reach continues to maintain a strong balance sheet with access to sufficient liquidity," the company said.
The company is now in the process of transforming its business with the goal of becoming "a streamlined, efficient organisation with more focussed editorial, advertising (solutions and local commercial) and central operations".
This will include a more centralised editorial structure and a move to fewer locations with a simplified management structure.
Overall, Reach intends to shrink its headcount by around 550 people or 12% of the workforce.
These measures mean that Reach can end its temporary pay cuts for all colleagues excluding its chief executive, chief financial officer, and other board members who will still be subject to a pay cut of 20%. Bonus schemes are still suspended.
Chief Executive Officer Jim Mullen said: "Structural change in the media sector has accelerated during the pandemic and this has resulted in increased adoption of our digital products. However, due to reduced advertising demand, we have not seen commensurate increases in digital revenue.
"To meet these challenges and to accelerate our customer value strategy, we have completed plans to transform the business and are ready to begin the process of implementation. Regrettably, these plans involve a reduction in our workforce and we will ensure all impacted colleagues are treated with fairness and respect throughout the forthcoming consultation process."
In terms of its dividend, which has been suspended, Reach said it "recognises the importance of a dividend" for shareholder and is keeping future dividends under review with plans to restart payments when it becomes "appropriate to do so".
By Anna Farley; annafarley@alliancenews.com
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