A cuts-hit regional publisher has warned of further “headwinds” facing its business after profits dropped by almost a third.

Reach plc has revealed an operating profit of £47.2m for the first half of 2022, a decrease of 31.5pc when compared with the £68.9m figure for the same period of the previous year.

Overall revenue was also slightly down at £297.4m, with the group citing the “impact of newsprint inflation and reduced advertiser demand” for the change.

The results come a week after the publisher opened a voluntary redundancy scheme for staff, while cuts have also recently been announced to its regional print production and commercial writing operation.

However, Reach says it is now a “stronger, more streamlined, and more efficient organisation” and is “well placed to benefit” when industry trends return to normal.

It said the “acceleration of operating model changes” will enable “further significant efficiencies” in the second half of the year.

The publisher said it now expects to implement increased cover prices during the second half of 2022, although print “remains a large-scale, resilient business which provides the foundation for our investment in digital”.

Reach has explained the slump in profit as being caused by “unprecedented increase in newsprint cost”, with prices rising by around two-thirds.

The results for the 26-week period to 26 June 2022 reveal print revenue stood at £223.4m, a decrease of 3.9pc, while circulation and advertising revenue were down 5.1pc and 9.9pc respectively.

Digital revenue stood at £72.5m, a year-on-year increase of 5.4pc, although lower digital growth recently was blamed on coverage of the war in Ukraine leading to “less brand-safe advertising space”.

The company now has more than 11m registered users, more than double the number it had in 2020, as part of its ‘Customer Value Strategy’.

Chief executive Jim Mullen, pictured, said: “We are making steady and significant progress in delivering our Customer Value Strategy. While the macroenvironment is naturally presenting challenges, we’re committed to investing in the data and digital capabilities that are shaping the future of our business.

“Our ongoing strategic transformation strengthens us financially and operationally while we continue to deliver positive change through our editorial impact.

“We have acted swiftly to address the headwinds facing the business and expect the further cost efficiencies and cover price increases to mitigate the impact of newsprint inflation and reduced advertiser demand which are affecting the whole sector.

“Our strategic shift towards greater customer engagement and data-driven revenue is driving a more sustainable and profitable future. We are a stronger, more streamlined, and more efficient organisation, with the group well placed to benefit once industry trends return to more normalised levels of activity.

“In addition, the strength of our balance sheet and cash generation underpin both a growing dividend and continued investment as we transition to an increasing mix of higher quality digital earnings.”

In its half-yearly report, published this morning, the company stated: “We expect a year over year improvement in total operating costs during H2, with the benefit of further strategically driven changes to our operating model and additional cost management actions mitigating the impact of inflation and preserving our ongoing investment plans.

“We do not anticipate an improvement in the existing rate of newsprint during the second half.

“In the context of an uncertain macro and political climate, we remain mindful of the risk of further deterioration in economic conditions.

“We currently expect management actions and the natural phasing of our business, to support a stronger than historical H2 profit contribution.”