The owner of the Express and Mirror newspapers has reported a £107,6m loss after slashing the value of its local newspapers, which include the Manchester Evening News and the Liverpool Echo.
Reach, which bought media titles including the Express and the Star from media tycoon Richard Desmond in a £200m deal in February, wrote down the value of its local papers by £150m because of a “more challenging than expected outlook”.
Print publishers have been increasingly struggling against a long-term decline in newspaper sales.
Reach’s revenues rose 10.6 per cent to £353.8m, helped by the acquisition of the Express and the Star but on a like-for-like basis sales slumped 7.2 per cent.
Publishing print revenues fell more dramatically - 9.3 per cent down on the previous year while digital revenues grew 6 per cent.
Reach said it had achieved £9m in cost savings over the six months to 1 July and expected to double that figure by the end of the year, beating its target by £3m.
The company is now free to push through further “synergy savings” which it estimates to amount to £20m per year after regulators Ofcom and the Competition and Markets Authority approved the Express and Star purchase last month.
Simon Fox, Reach chief executive, said the company had delivered “positive” financial performance despite challenging conditions.
“The benefit of improved performance from national print advertising coupled with further cost mitigation will support profits over the year despite a further increase in newsprint prices for the second half.
“We have started the process of integrating Express & Star in order to accelerate the benefits that our combined scale will deliver and have a clear strategy which fully reflects the changing shape of the Group.“
Print circulation for all major national newspapers fell in the past year, according to the latest industry figures.
The Telegraph’s circulation dropped to 370,613 in June, 23 per cent down on the same month last year. The Times was down 6.6 per cent, the Daily Mail fell 12 per cent and the Guardian 13 per cent.
