Reach (RCH) H2 2024 earnings summary

Executive summary

• Delivered strong financial performance in 2024, exceeding market expectations with digital revenue growth and operational efficiency despite macroeconomic challenges.

• Digital business returned to growth, supported by a data-led strategy and Customer Value Strategy, with data-driven digital revenues up 7% and now 45% of digital revenue.

• U.S. expansion, investments in content, AI, and e-commerce contributed to audience and revenue growth.

• Maintained commitment to an ad-funded, free-to-access news model.

• Operating margin improved to 19% from 17%, supported by cost actions and strong Q4 trading.

Financial highlights

• Adjusted operating profit reached £102 million, up £7 million like-for-like, with adjusted operating margin at 19%.

• Digital revenue grew 2.3% to £130 million; print revenue declined 6% (£32 million).

• Adjusted EPS increased to 25.3p from 21.8p; total dividend per share maintained at 7.34p.

• Cash conversion strong at 105%, with adjusted operating cash flow of £107 million.

• Ended the year with £21 million cash and £14 million net debt after £59 million pension contributions and £23 million dividends.

Outlook and guidance

• 2025 outlook in line with market expectations; consensus adjusted operating profit for FY25 is £99.3 million.

• Digital revenue expected to grow; total operating costs targeted to reduce by 4%-5% through efficiencies and lower newsprint volumes.

• Capital expenditure and pension contributions to remain consistent with 2024 levels, with a one-off £5 million payment in 2025.

• Macro environment remains uncertain, with prudent growth assumptions and no major events expected.

• Working capital inflow expected to unwind in H1 2025.