By Yadarisa Shabong
(Reuters) -Reach Plc said on Wednesday its annual operating profit would miss market expectations and it would cut around 200 jobs, as the British news publisher struggles with weak digital and print advertising, knocking shares 24% lower.
The owner of newspapers such as the Daily Mirror and Daily Express said it expected challenges to persist in 2023 and that it would start cutting costs to save at least 30 million pounds ($36 million).
As part of the savings drive, the company will axe about 4% of its workforce, or around 200 jobs, including journalists and commercial teams, a spokesperson said.
Reach, which employs over 4,500 people, has informed employees that consultations would start immediately, he added.
“Near-term economic conditions remain uncertain, creating unavoidable headwinds for the whole sector, with advertising weakness and prolonged cost inflation,” the company said in a statement.
Businesses staring at a possibly lengthy recession and a worsening cost-of-living crisis are cutting back on their advertising spend to save costs.
Digital revenue fell nearly 6% and print advertising revenue slumped about 20% in the three months to Dec. 25, hurt partly by lower campaign spends around Black Friday and Christmas. Circulation revenue grew by 1.8%.
Reach said operating profit for full-year 2022 would miss analysts’ forecast by mid-single digit percentage.
Shares in the company, which lost two-thirds of their value in 2022, were down 24% at 83 pence by 1341 GMT.
National World, which invests in news publishing businesses and was looking to takeover Reach, in November dropped plans to buy the publisher, citing unfavourable circumstances, without divulging the specifics.
($1 = 0.8233 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Subhranshu Sahu and Mark Potter)