The death of The Queen prompted a boost in circulation revenues at a regional publisher – but overall takings fell as advertisers shelved or cancelled campaigns during the period of national mourning.
In a quarterly trading update issued this morning, Reach plc said its revenue performance for both the third quarter of 2022 and September had been “distorted” by the impact of Her Majesty’s death.
The company reported a 4.3pc upturn in circulation revenue in September compared with the same month the previous year, with chief executive Jim Mullen praising journalists’ “comprehensive, respectful, and sensitive coverage of The Queen’s passing.”
But it also triggered a 32pc year-on-year fall in advertising revenues as many advertisers deferred or cancelled scheduled ad campaigns during the period of national mourning, leading to an estimated 5pc drop in revenue overall.
The company also issued a warning about the current “volatile” political climate, saying it is “mindful of the potential impact of changing consumer behaviour.”
The update, covering the the three-month period to 25 September, comes after new Chancellor Kwasi Kwarteng’s mini-budget last month led to disturbances on the markets and saw the pound drop, mortgage products withdrawn and the Bank of England stepping in to save some pension funds.
In an accompanying statement, Reach said: “The macroeconomic and political climate is volatile, and we are mindful of the potential impact of changing consumer behaviour on trading, given this uncertain external environment.
“Although the unusual period of trading during September impacted revenue and profit, underlying revenue trends during Q3 were broadly as anticipated heading into Q4, historically the strongest period for advertising.
“We expect circulation revenue to be supported by increased cover prices, while advertising revenue should benefit from seasonally stronger yields, particularly around Black Friday and Christmas and from the football World Cup which starts in November.”
As previously reported by HTFP, Reach increased cover prices by 10pc a copy at 26 of its regional titles in the final week of August. We have approached the company to clarify whether there are plans for any further increases.
Overall group revenue for the period July to September as a whole was down 1.9pc year-on-year, with advertising and print revenue declines of 23.1pc and 2.9pc respectively.
Digital revenue was up 1.1pc, having increased by 5.9pc during July and August, and circulation revenue up 2pc, including the 4.3pc uplift during September.
Mr Mullen said: “We have made further good strategic progress as we continue to deliver quality content to a growing and increasingly engaged digital audience.
“I am particularly proud of our teams who worked so tirelessly over recent weeks to produce such comprehensive, respectful, and sensitive coverage of the Queen’s passing, a truly once in a generation event.
“Actions on costs are helping to mitigate inflationary pressures and while macro uncertainty persists, improved revenue trends during Q3 are a positive.
“The strength of our balance sheet underpins ongoing investment in the strategy, as we continue to transition to an increasing mix of higher quality digital earnings.”