Shares in the Daily Express, Mirror and OK! magazine publisher Reach lost a quarter of their value today after the company warned it is to cut 200 posts following a bigger than expected fall in advertising revenue.
They dropped by 27p to 82.4p in early trading as it revealed that digital revenue slumped by 5.9% and print ad revenue by 20.2% in the three months ending on Christmas Day.
Reach said this was due to “lower than anticipated” spending on campaigns in the run up to Black Friday and Christmas and “the continued impact of macroeconomic and consumer uncertainty, reflected in slowing market demand for advertising.”
The newspaper group, which also owns hundreds of regional titles including the Manchester Evening News, Birmingham Mail and Liverpool Echo, said it would respond with a £30 million cost cutting drive.
The publisher told staff the job and cost cuts would be achieved through measures including “simplification of central support functions, supply chain efficiencies in print and distribution, and accelerated removal of editorial duplication”.
An internal email said: “Under the proposals we’re announcing today we anticipate that, regrettably, around 200 roles of current employees will be made redundant.”
Circulation revenue was slightly up after cover price increases earlier in the year but revenue for the group as a whole was down 4.2% in the quarter, and 2.3% for the year.
Chief executive Jim Mullen said: “We expect current market headwinds will continue during 2023 and have therefore taken decisive action, putting in place a further cost reduction plan. This will ensure we retain our strong foundations and are able to continue investing in our digital growth priorities, which position us to benefit strongly when the economic environment improves.”
Mullen said the cost of newsprint had soared by 60% over the last year.