2 May 2019

Reach plc

Trading Update

Solid start to 2019

Reach plc ('the Group') is issuing a trading update for the 4 month period from 31 December 2018 to 28 April 2019 ('the period'), ahead of its 2019 Annual General Meeting later today.

Outlook in line with market expectations ⁽¹⁾

The Board anticipates performance for the year to be in line with market expectations.

Like for like ⁽²⁾ revenue trends improved on prior year

Group revenue in the period grew by 4.4%, reflecting the benefit of the inclusion of the Express & Star acquisition for four months in the current period versus two months in the comparative period.

On a like for like basis Group revenue in the period fell by 6.4%, an improvement on the 7.8% like for like fall in the first four months of 2018. Within like for like revenue, print ⁽³⁾ fell by 7.9% and digital ⁽³⁾ grew by 8.4%. There are a series of digital initiatives underway, which are expected to further accelerate this growth.

Integration of Express & Star continues to progress well

We remain on track to deliver synergy savings of at least £20 million per annum by 2020.

Strong cash flows and further reduction in net debt

Net debt at the end of April of £22.2 million comprised drawings on the Acquisition Term Loan of £39.7 million (reduced from £60.0 million at the year end following early repayment of £20.3 million due in December 2019) less cash balances of £17.5 million.

Simon Fox, Chief Executive, commented:

"I am pleased with the solid start to the year and the positive improvement in revenue trends. Our early term loan repayment demonstrates the continued success of the Express & Star acquisition and the strong cash generation of the Group. We also continue to make good strategic progress, most importantly with a range of digital projects to drive both page views and revenue, the effects of which we expect to see in the second half of the year."

Enquiries

The statement on future performance is given as at the date of this announcement and is subject to a number of risks and uncertainties and actual results and events could differ materially from those currently being anticipated as reflected in the statement. The Company undertakes no obligation to update this forward-looking statement.

⁽¹⁾   The market consensus range for adjusted PBT for the 52 weeks ended 29 December 2019 is £140.6 million to £145.1 million. This range includes estimates from the analysts that have issued notes since our annual results announcement on 25 February 2019. Adjusted PBT excludes operating adjusted items (restructuring charges in respect of cost reduction measures, pension administrative expenses and amortisation of intangible assets) and the pension finance charge.

⁽²⁾    The like for like trends for 2019 include Express & Star as if it had been owned from the beginning of 2018 and exclude from the 2018 comparative the impact of portfolio changes and the disposal of Communicator Corporation.

⁽³⁾   Print revenue comprises circulation, advertising (including digital classified which is predominantly upsold from print) and other (including third party printing contracts). Digital revenue comprises the combined display and transactional revenue streams.