Newspaper publisher Reach revealed a collapse in its profit on Monday as the company was hit by a series of one-off costs.
The Daily Mirror and Daily Star owner said that its pre-tax profit had fallen from £120.9 million in 2019 to just £400,000 in 2020.
It blamed several impairments, saying that when stripping out those its underlying results were less serious.
Adjusted pre-tax profit dropped 13% to £131.3 million, on revenue of £600.2 million, down 14.6%.
The company’s online publications helped it avoid a bigger drop, as digital revenue grew by 10.6% as people stuck at home during the pandemic read more news on their phones, tablets and laptops.
However, the company’s physical newspaper sales suffered, with print revenue down 18.9% due to the impact of Covid-19. This eased somewhat in the final three months of the year, Reach said.
“We have delivered our strategic milestones ahead of our original expectations and will now increase investment to accelerate delivery, focusing on the use of enhanced customer insight to drive engagement and our medium-term objective of doubling digital revenues,” said chief executive Jim Mullen.
“Resilience in print circulation is the foundation for the strong cash generation which underpins strategic investment, our pension commitments and growing returns to shareholders.”
The one-off charges that pulled apart Reach’s profit include £9.3 million in severance payments it was forced to make to redundant staff.
In July the business said it would cut around 550 jobs, or 12% of its workforce, as part of cost reductions that would save around £35 million every year.
The cost of reducing those costs reached £36.4 million, including more than £10 million to close two printing sites.
The business also took a £34.7 million impairment charge on its property and equipment.
“Reach has become a stronger business in 2020 thanks to the ongoing hard work and commitment of our people during this unprecedented year,” Mr Mullen said.
“A radical reorganisation of our business model not only makes us more efficient, it also enables our changing culture, which is evolving to support a growth-led agenda.”