Daily Mirror and Express publisher Reach today put aside another £6 million to cover phone hacking claims and warned that the amount it is likely to pay to victims could grow even further.
Reach has faced claims from a number of public figures from Elizabeth Hurley to Kevin Keegan regarding the hacking of voicemail services since 2015. Initially, the Mirror Group, as it was known then, set aside just £4 million to deal with claims, but as more and more celebrities demanded compensation, the total kept growing.
Despite having already paid out more than £60 million to claimants, Reach upped the amount it put aside again, to £45.4 million.
It warned that it could end up paying even more, up to £64 million for the cases in question. What’s more, the total could grow again as this Summer’s high-profile trial involving Prince Harry is not included, as it is still too early to tell the results of that case.
The publisher also blamed falling revenue and profit on “Facebook’s deprioritisation of news content” as it revealed online page views fell in the first half of the year.
Views across Reach’s portfolio fell by 16% to 1.4 billion, with CEO Jim Mullen saying most of the drop was due to Facebook’s changes. The social media giant’s relationship with news publishers has been tense of late, as it threatened to withdraw all news content in Canada, while new Twitter rival Threads - owned by Facebook parent Meta - opted not to promote “politics and hard news”.
Page views across Reach’s portfolio fell by 16% to 1.4 billion, with Reach CEO Jim Mullen saying most of the drop was due to Facebook’s changes. The social media giant’s relationship with news publishers has been tense of late, as it threatened to withdraw all news content in Canada, while new Twitter rival Threads - owned by Facebook parent Meta - opted not to promote “politics and hard news”.
That fall in views meant digital revenue fell at a similar rate to £60.8 million. Overall revenue slipped by 6% to £279.4 million.
Given the decline, Reach is looking for revenue streams “less dependent on direct customer volumes”, such as affiliate marketing and the launch of paywalled newsletters.
On the print side, there was good news as circulation revenue was up by 2% and newsprint costs fell dramatically, but ad revenue dropped by more than 20% due to an end to Government-bought public health ads which ran during the pandemic.
The strong print circulation performance meant the overall decline was less severe than many in the City expected, prompting Reach shares to rise by 10p, or 15%, to 78.6p.
Fiona Orford-William, director of TMT at Edison, said: “Reach’s half-year numbers show some reasons for cheer, given that the full year expectations are maintained.”
Reach also continues to look into AI, after announcing earlier this year that robots were already writing some of its articles.
