Mirror owner Reach slumps to £107.6m loss after slashing value of its local newspapers

Group writes down value of regional titles by £150m because of ‘more challenging than expected outlook’

Publishing print revenues fell 9.3 per cent down on the previous year, Reach said (Getty)

The owner of The Daily Express and Daily Mirror newspapers has reported a £107.6m loss after slashing the value of its local newspapers, which include The Manchester Evening News and The Liverpool Echo.

Reach, which bought the Express and Star titles from media tycoon Richard Desmond in a £200m deal in February, wrote down the value of its local papers by £150m because of a “more challenging than expected outlook”.

Print publishers have increasingly struggled against a long-term decline in newspaper sales.

Reach’s revenues rose 10.6 per cent to £353.8m, helped by the acquisition of The Daily Express and Daily Star, but on a like-for-like basis sales slumped 7.2 per cent.

Print publishing revenues fell more dramatically – 9.3 per cent down on the previous year – while digital revenues grew 6 per cent.

Reach, formerly Trinity Mirror, said it had achieved £9m in cost savings over the six months to 1 July and expected to double that figure by the end of 2018, beating its full-year target by £3m.

The company is now free to push through further “synergy savings” which it estimates to amount to £20m per year after regulators approved the purchase of The Daily Express and Daily Star last month.

Simon Fox, Reach chief executive, said the company had delivered a “positive” financial performance despite challenging conditions.

“The benefit of improved performance from national print advertising coupled with further cost mitigation will support profits over the year despite a further increase in newsprint prices for the second half, he said.

“We have started the process of integrating The Express and Star in order to accelerate the benefits that our combined scale will deliver and have a clear strategy which fully reflects the changing shape of the group."

Print circulation for all major national newspapers fell over the past year, according to the latest industry figures.

The Daily Telegraph’s circulation dropped to 370,613 in June, 23 per cent down on the same month last year. The Times was down 6.6 per cent, The Daily Mail fell 12 per cent and The Guardian 13 per cent.