The UK’s largest commercial news publisher has blamed a shake-up of Facebook’s content priorities for a major slump in half-year profits.
Reach, which owns The Mirror, Daily Star, Daily Express and Manchester Evening News, posted statutory operating profit of £11.1million in the 26 weeks to 25 June, down 67.8 per cent on the same time last year.
The group’s revenue slipped by 6.1 per cent year on year to £279.4million, as digital revenues collapsed 16.1 per cent to 14.1 billion.
The company also saw its page views down by 16.1 per cent over the same time period to £60.1m
Jim Mullen, chief executive of Reach, said: ‘Digital growth for the period has been materially affected by lower referral traffic across the sector, particularly following Facebook’s deprioritisation of news content, which has driven page view declines for publishers.
‘In spite of this and continued macroeconomic uncertainty, our focus on customer data means we’re driving more diversified, higher performing revenues, with greater exposure to directly sold, higher value advertising.’
It is not the first time Reach has attributed falling income to Meta’s crackdown on news circulation on Facebook
In April, Facebook owner Meta shut down Instant Articles, a mobile-friendly format that allowed users to read entire articles on the social media website’s app without having to leave the platform to access them.
It forms part of a broader shift away from news-focused products at Meta.
Last year, Meta spokesperson Erin Miller claimed that only 3 per cent of Facebook feed posts contained links to news pieces, adding that ‘it doesn’t make sense to over-invest in areas that don’t align with user preferences’.
But Reach’s print titles were also not immune from a broader advertising slowdown.
Circulation revenues rose 2.4 per cent over the six months, but an 18.3 per cent drop in ad revenues saw overall revenue for the segment fall 2.7 per cent.
Mullen said: ‘Our scale audience and base of registered customers supports the growth of first party data, a key advantage in a market moving closer to a future without third party cookies.
‘The ongoing resilience and predictability of print underpins continued investment in a strong digital offering, with circulation revenue growing and newsprint costs starting to decline.
‘Cash generation is supported by a focus on driving efficiencies, with cost reductions on plan and expected to support a stronger second half performance. ‘
Despite the slump in profits, Reach shares soared by more than 17 per cent to 80.3p on Tuesday morning.
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