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Reach PLC's shares dropped on Tuesday as it posted a dim outlook alongside a higher profit and dividend for the first half of its financial year.
Reach's shares fell 28% to 84.60 pence each in London on Tuesday morning.
In the six months ended June 26, pretax profit rose 25% to £32.0 million from £25.7 million a year ago.
Costs fell by 4.0% to £263.6 million from £274.5 million, the London-based owner of the Daily Mirror, Daily Star and Daily Express newspapers reported.
However, revenue shrank by 1.6% to £297.4 million from £302.3 million. Reach noted that digital was its only branch that grew in revenue, up 5.4% from a year ago. Print revenue fell by 3.9%, circulation revenue was down 5.1% and advertising revenue fell by 9.9%.
It declared an interim dividend of 2.88 pence per share, up 4.7% from 2.75p a year ago.
‘Over the past three years, the evolution towards a more digitally focused operating model has made us a more agile and more efficient business, with our customer value strategy driving a more sustainable, longer term growth trajectory,’ the company explained.
However, the company posted a dim outlook. ‘Energy prices [are] fuelling all-time high newsprint cost; not forecasting any improvement during financial year 2022,’ it explained. ‘In the context of an uncertain macro and political climate, we remain mindful of the risk of further deterioration in economic conditions,’ Reach added.
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