An investor-led “AI panic” saw the share price of the owner of the Mirror, Express and Star newspapers plunge over 12%, after the publisher said that traffic to its titles from Google has almost halved.
Reach, which also owns scores of regional titles including the Manchester Evening News, the Birmingham Mail and the Liverpool Echo, reported that digital revenues crucial to its future declined by 0.9% to £128.9m in the year to 3 March.
The publisher said that overall digital page views fell 8% year-on-year, primarily due to a 46% year-on-year decline in traffic from Google in the second half of its financial year.
Investor jitters were further fuelled by the company saying that it is taking a “cautious approach” to digital performance this year, and does not expect to provide hard numbers on expectations until potentially its half-year results.
The impact of features including Google’s AI Mode and AI Overviews, which sit at the top of the results page and summarise responses and often negate the need to follow links to source content, have prompted fears of a “Google zero” future where traffic referrals dry up.
Piers North, the chief executive of Reach, said that most of the traffic decline has come from Google Discover, which feeds users articles and videos tailored to them based on their past online activity, and has replaced search as the main source of click-throughs to content.
“The traffic referral headwinds we have seen have continued into January and February, there are a lot of unknowns,” he said, speaking to the Guardian. “What underpins that, is that related to AI, we can speculate. We have to be careful making sweeping statements one way or the other on such a changeable eco-system. Clearly AI at a macro level is changing the internet as we know it.”
Earlier this week, Roger Lynch, the chief executive of Vogue and New Yorker publisher Condé Nast, said that Google’s introduction of AI summaries was “another sort of death bow” in search traffic.
Overall, Reach beat market expectations on adjusted profits of £104.7m, which was helped by boosting the level of cuts to its operating costs to 5.2%, ahead of the 4% to 5% targeted.
The publisher, which in September made more than 300 redundancies, said it is targeting 5% to 6% of cuts this year.
Reach made an overall pre-tax loss of £165.9m after taking a non-cash impairment charge of £222.8m.
Total print revenues fell 4.6% year-on-year to £388m. Newspaper sales revenue fell 3.4% to £288m, while print advertising revenue dropped 14.8% to £55.8m.
Analysts at Panmure Liberum referred the current valuation of Reach reflected the “current AI panic” in the market.
North, who joined Reach in 2014 and was promoted to chief executive last March, said that Reach is in a strong position for the future as hefty annual payments to its pension plan end in 2028 and its nascent subscription strategy gathers momentum.
A believer in a primarily advertising funded future, Reach launched its first premium subscription service for the Manchester Evening News in November.
The company now has subscription offerings across six major titles, including the Express, with a total of 15,000 subscribers to date and a target of 75,000 by the end of this financial year.
“Clearly to have a robust and solidly performing business in media is no mean feat,” said North. “This is a defining year for the industry, from a macroeconomic and global perspective, there is huge change. We know the market is changing. Continual change is the norm and it is going to get quicker and faster.”
Losses narrow at GB News
Losses at GB News have hit almost £130m over the past four years, as the right-leaning TV broadcaster continues to struggle to make its business model work.
GB News, which is funded by investors including Spectator-owner Sir Paul Marshall and Dubai-based Legatum Ventures, reported a pre-tax loss of £22m in the year to 31 May 2025.
However, the broadcaster, which launched in June 2021 and has presenters including Nigel Farage and Eamonn Holmes, managed to significantly reduce its loss from the £32.7m recorded the previous year.
Overall, pre-tax losses since it began setting up ahead of its 2021 launch now total £127.9m.
GB News has continued to increase total revenues, which increased almost 60% year-on-year to £26.2m, with advertising income climbing 48% to £14.2m.
The commercial performance has been underpinned by audience growth with the company claiming an 18% year-on-year increase in the average monthly reach of viewers watching at least 3 minutes of GB News to 3.7m, according to figures from TV research body Barb.
GB News said that it still holds an ambition to become the “UK’s largest news channel by 2028”.
During the year GB News cut staff numbers from 311 to 263, trimming annual staff costs from £22m to £19.7m.
GB News remains dependent on funding from its parent company All Perspectives, in which Marshall controls more than a third and Legatum also has a large stake.
GB News received funding of £17.7m from All Perspectives last year, taking the total balance due to its parent company to £141m.
“The parent company has a strong positive net asset position and has confirmed its ongoing commitment to funding the operations of GB News Limited,” said GB News in its filing to Companies House. “After the year end, the investors have confirmed they will provide funding which the directors believe will be sufficient to cover any expected deficit.”
