Reach beats profit forecasts after Express and Star acquisition

Daily Mirror owner Reach climbed on Monday after its profits beat forecasts following its acquisition of the Daily Express and the Daily Star titles.

For the year ended 30 December the newspaper, magazine and digital publisher reported profit before tax of £141.9m, up 15.8% compared to the year before, after revenue increased by 16.2% to £723.9m.

The £126.7m acquisition of Northern & Shell's publishing assets, namely the Daily Express and Daily Star titles, contributed revenue of £159.5m, helping to offset "a significant increase in the price of newsprint".

This meant that on a like-for-like basis revenue fell by 6.6% with publishing revenue dropping by 6.9%, with publishing print revenue falling by 8.7% and digital revenue up by 5.3%.

However, the publisher reported that it delivered structural cost savings of £20m, £5m ahead of its original target of £15m, as synergy cost savings of £3m were delivered from the integration of Express & Star.

In the current year, the company said it expects further structural cost savings of £10m as well as incremental synergy cost savings of £12m from integrating Express & Star, keeping the company on track to deliver at least £20m of annualised synergy cost savings by 2020.

The London-listed company had cash and cash equivalents of £19.2m at the end of the period, up from £16.0m at the same point the year before, and proposed a final dividend of 3.77p per share, bringing the total dividend for the year up 5.9% from the previous year to 6.14p per share.

Simon Fox, chief executive of Reach, said: "I am pleased with the performance we have delivered in 2018 and encouraged by the stronger finish to the year. We have begun 2019 in a strong financial position with good momentum on the integration of Express & Star and with clear plans for digital growth."

Reach's shares were up 5.39% at 60.60p at 1226 GMT.