Mirror publisher denies interest in rival newspaper group
Daily Mirror publisher Reach has ruled out a bid for rival business JPIMedia as shares surged on better-than-expected results and a bonus award for investors.
Chief executive Jim Mullen said Reach was "not participating in any process" for The Scotsman owner JPI, which re-hoisted a "for sale" sign earlier this month.
Mr Mullen, who pulled Reach out of the first auction for JPI last year, said "the price isn't right" for JPI's stable of more than 200 regional titles.
Instead, he planned to ramp up competition by expanding into areas where Reach "doesn't have a foothold".
The comments came as Reach shares jumped by as much as a fifth on Monday after a digital advertising resurgence helped it beat analysts expectations for the first half.
Although dividends remain suspended, the UK's biggest regional publisher issued investors with an award equal to an interim dividend of 2.63p.
Mr Mullen said the share bonus would allow the company to reward investors while protecting its cash in the event of more disruption.
Reach closed 11.1p higher at 75.6p but the company remains worth just £230m. Shares were as high as 180p earlier this year.
The rise came despite a slide in newspaper and advertising sales that sent Reach's pre-tax profits down 56pc to £25.2m for the 26 weeks to June.
Revenues also dropped 18pc to £352.6m, with its regional titles coming under pressure after four in five local advertisers cut spending at the start of lockdown.
Mr Mullen, a former boss of betting giant Ladbrokes Coral, has been using customer data to boost sales since he joined in August last year.
That includes getting more readers to register online, with the company achieving 3.5m registered users as of this month – far beyond this year's target of 2m.
Reach said it had enjoyed a "strong recovery" in digital advertising, while newspaper sales had "stabilised" and began a "gradual recovery" since the pandemic struck.
Media companies have suffered since the crisis started as advertisers cut costs to protect their cash and fewer people bought newspapers.
In July, Reach said it would cut 12pc of its staff – about 550 jobs – as it grappled with the hit to circulation and advertising.
Alongside the daily and Sunday Star titles, Reach also owns more than 200 regional mastheads including the Liverpool Echo and the Manchester Evening News.
Despite digital advertising jumping 13pc in the third quarter, revenues still fell 15pc.
Print advertising, which accounts for a large portion of revenues, was down 30pc and 20pc respectively in the second and third quarters.
Reach said it would carry out a review of its printing capacity in the fourth quarter amid "ongoing uncertainty" around the renewal of its third-party contracts.
Barclays analyst Nick Dempsey said: "This is a business that is delivering well on cost, cash and digital, with potential over time to accelerate digital growth and improve group performance."
