Reach, the publisher of the Mirror and Express newspapers, has cut the amount set aside to deal with legal claims relating to phone hacking and unlawful information-gathering by £20m as it seeks to draw a line under the scandal.
The company, which owns scores of newspapers and websites across the UK including the Express, the Daily Record, the Manchester Evening News and the Liverpool Echo, said it had set aside £18.2m to deal with such claims, which it said was its best estimate of the amount needed to settle the long-running legal controversy.
Announcing its annual results on Tuesday, Reach said it would release a further £20.2m provision after a high court ruling last year set clear parameters on the time limits for new cases.
Last December Mirror Group Newspapers, owned by Reach, was ordered to pay Prince Harry £140,000 after the high court found he had been the victim of unlawful information-gathering by Mirror Group Newspapers. The ruling also meant that all cases issued after 31 October 2020 are likely to be dismissed unless exceptional circumstances apply.
Reach expects to resolve the majority of outstanding claims this year and in 2025 – effectively drawing a line under the controversy, which has cost the group about £110m in total. Jim Mullen, the chief executive, said: “I’ve been writing a lot of cheques for a lot of money and this will effectively put this issue to bed.”
Mullen added that Reach had resolved a longstanding problem involving its pension funds. Its agreement with trustees gives clarity on the scale of its future pension commitments – which from 2028 will reduce substantially from its current rate of £60m.
Reach shares were up 14% on Tuesday. The company reported adjusted operating profit of £96.5m in the 53 weeks to 31 December – slightly better than the £95m expected by analysts.
Profit before tax on a statutory basis fell 45% in 2023 to £36.7m from £66.2m in 2022 as Reach suffered a drop in advertising and a sharp drop in traffic to its webpages after Facebook, one of its largest traffic referrers, made changes to its feed that deprioritised news content. Reach was also affected by updates to Google’s core algorithm that forced it to change how it delivered content to readers.
Reach said its headcount had fallen by 14% last year. In November it announced it was cutting 450 jobs in one of the biggest annual culls in the UK newspaper industry for decades. In January this year Reach confirmed the departure by mutual agreement of the Daily Mirror’s Alison Phillips, a longstanding employee who was the title’s first female editor since its launch in 1903.
