The publisher of the Mirror, Express and Daily Star newspapers has blamed changes in the way Facebook displays news content for a slide in its digital revenues.
Reach, which also owns hundreds of regional newspapers including the Birmingham Mail, Liverpool Echo and Manchester Evening News, reported a fall in group revenue of almost 6% for the four months to 23 April.
It has previously announced plans to slash hundreds more jobs amid a £30m cost-cutting drive as it battles higher costs resulting from inflation and disappointing advertising sales.
The newspaper group, which owns a network of regionally focused news websites including Glasgow Live and Hampshire Live, said it had experienced a slowdown in the number of page views from online readers, with changes to the presentation of news by Facebook reducing traffic to its sites.
Reach’s digital revenues have slumped by almost 15% since January and it warned of a challenging environment for digital advertising. However, it said its print revenue remained strong, and it had continued to sell “robust” quantities of newspapers.
The company said revenue from print circulation rose by 2% over the period, as it benefited from higher prices it is charging for its newspapers that were introduced last year. Print advertising was slightly ahead of expectations.
Jim Mullen, Reach’s chief executive, said: “External factors continue to impact digital revenue, delivery of the customer value strategy is driving a higher quality mix, underpinned by the strength of print.
“Our focus on data, means customers are receiving and responding more often to relevant content and a more engaging user experience.”
Reach, which is holding its annual shareholder meeting on Wednesday, said it was continuing with its plans to cut its operating costs by 5-6% this year, adding that its actions to do so were “well advanced”.
The publisher warned in March that up to 420 staff could face redundancy as part of its cost-cutting plans, including 192 journalists, only weeks after announcing it would cut 200 jobs.
Reach added it was continuing its investment in a digital operation to tap the US market, and had almost 100 full-time staff in place before its launch of US websites for the Mirror and the Express in the coming months.
