Daily Mir­ror pub­lisher Reach to cut 550 jobs amid slump in ad­ver­tis­ing and cir­cu­la­tion

The Daily Telegraph - Business - - Business - By Christo­pher Wil­liams and Si­mon Foy

REACH, Bri­tain’s big­gest news­pa­per pub­lisher, is mak­ing more than one in 10 staff re­dun­dant as hun­dreds of mil­lions of pounds of ad­ver­tis­ing and cir­cu­la­tion in­come are lost to the coro­n­avirus pan­demic.

The pub­lisher of the Mir­ror and Ex­press ti­tles, as well as scores of re­gional news­pa­pers, said it will cut 550 jobs, equiv­a­lent to 12pc of its work­force, to save £35m per year.

Jim Mullen, chief ex­ec­u­tive since last sum­mer, who had been rid­ing a wave of re­newed City op­ti­mism in Reach’s prospects un­til Covid-19 struck, said the re­dun­dan­cies were nec­es­sary to safe­guard its finances.

They are likely to raise con­cern on re­gional news cov­er­age es­pe­cially, which is also fac­ing hun­dreds of job cuts at ri­val pub­lish­ers and the BBC.

Among ma­jor news­pa­per pub­lish­ers Reach is par­tic­u­larly ex­posed to the slump in ad­ver­tis­ing, as its fo­cus on tabloid and lo­cal news­pa­pers has left it with­out a dig­i­tal sub­scrip­tion busi­ness able to profit from the mas­sive in­ter­est in coro­n­avirus news.

Its re­gional arm is also de­pen­dent on the small busi­nesses that have been among the hard­est hit by the lock­down. Turnover in the sec­ond quar­ter was down 27.5pc and is ex­pected by an­a­lysts to be down by a fifth for the full year, or about £140m, with a last­ing im­pact in sub­se­quent years.

June showed only a small im­prove­ment on the peak of the pan­demic, with sales down 23.9pc, com­pared with 30.5pc in April.

Print rev­enues, which last year ac­counted for four fifths of Reach’s busi­ness, were al­ready in sharp de­cline be­fore lock­down. Dig­i­tal ad­ver­tis­ing, which had been grow­ing and is at the centre of Mr Mullen’s plans for the fu­ture of the pub­lisher and its ti­tles, is now also shrink­ing.

How­ever, Nu­mis, Reach’s in-house bro­ker, still ex­pected the com­pany to re­port a pre-tax profit of more than £100m this year and have a cash re­serve of more than £20m by its end. Reach said it “recog­nises the im­por­tance of a div­i­dend to share­hold­ers” but said it will re­main sus­pended, de­spite liq­uid­ity that Mr Mullen said puts the pub­lisher in “much better shape than some if not all of our com­peti­tors”.

The com­pany’s largest share­holder is Richard Des­mond, the for­mer owner of its Ex­press and Star na­tional ti­tles.

Its shares closed 14pc lower at 76.2p.

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