Reach has said it made ‘more than average’ price increases in the last 12 months, often coupled with retailer terms cuts in order to ‘protect’ its own print margins.
In its newly published annual results, the publisher saw copy sales revenue fall by 1.7%. Chief executive Jim Mullen described this as “steady and broadly predictable.”
Despite Mullen heralding reader “relative price resilience, ” and claiming price rises had “minimal impact” on print volumes, ABC figures show Reach’s national titles have the worst print reader retention rates of any major publisher in the last year. Many lost around one in five readers in the last twelve months.
The company also revealed it had reduced the number of copies it was providing to stores and had cut the pagination of its titles by ‘around four pages’. Despite the changes, Mullen said there was “no material impact on availability” and that average page counts were higher than pre-pandemic levels.
Reach cut retailer percentage margins nine times last year on its national titles alone, with weekday titles falling from 20% to 18.5% retail margin since the start of 2022. Mullen said Reach would ‘remain committed to our strategy’ and would target further print efficiency measures in 2023. He told investors “As part of our cost reduction plan for 2023, we expect to make savings in our print supply chain, driven by more efficient raw materials sourcing and distribution planning.”
The firm stated a 60% increase in newsprint costs was a major factor behind the firm’s overall operating profit falling by more than a quarter to £106.1m. Mullen reassured investors, stating: “Print remains a profitable business with multiple years of cash flow to come.”
However, the company said there was an increased risk of ‘supply chain disruption and price increases’ going forward, due to cost pressures. Reach said it had responded with “Increased the monitoring of our key suppliers” during the past 12 months.
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