Express and Mirror owner to pay shareholder bonus months after job cuts

The company behind the Daily Mirror and Daily Express is set to do much better than expected, less than three months after plans to lay off 550 staff emerged.

Reach said that it is currently outperforming what the market expects, as its online news showed strong growth and circulation started to recover from the hit during the coronavirus lockdown.

Revenue was down by 17.5% in the first six months of the year, Reach said, as it hit £290.8 million across the period.

Most of this was down to the Covid-19 crisis, however even last year revenue dropped by 6.3%.

Print revenue dropped by just over a fifth to £241 million, after circulation revenue dropped 11.5% and the company lost nearly a third of its revenue from print advertising.

At its worst, around four in five of Reach’s regional advertisers had withdrawn from the market. Its regional titles include the Manchester Evening News, Liverpool Echo and Bristol Post.

The company’s digital revenue only dropped by 1% in the first half as Britons stuck at home took to reading the newspaper online.

The online revenue decline came after a strong first quarter, as advertisers cut back their spending in the second.

“This meant that despite our impressive audience numbers we still saw revenue declines in digital from mid-March for the rest of the first half,” Reach said.

Chief executive Jim Mullen said: “We have seen a strong recovery in the digital advertising market since the worst impacts of Covid-19 in April which has driven a return to healthy digital revenue growth since July.”

As the pandemic bit, Reach furloughed 20% of its staff, cut salaries by 10% for most of those left, suspended bonuses and cancelled shareholder dividends.

Even this was not enough, and later bosses put in place a plan that would slash Reach’s headcount by 550 people, or 12% of its workforce, as part of a package to save £35 million every year.

“Following the implementation of the major parts of the transformation programme, Reach now has a strong foundation to drive the next phase of the customer value strategy with increased efficiency and agility in our advertising and editorial operations,” Mr Mullen said.

Shareholders were able to celebrate on Monday as the board announced a share bonus in lieu of a dividend.

For each share they own investors will be given additional shares with a value of 2.63p.