Annual Results for 53 weeks ended 31 December 2023

About this update from Reach Plc

[{"type":"text","content":"\n \n Reach plc (\"The Company\") Full Year Results - 53 weeks to 31 December 2023 \n 5 March 2024                                                                          \n   \n FY23 Progress on our digital strategy, long-term uncertainties resolved \n   \n Jim Mullen Chief Executive \n \"This year we have successfully gained clarity on two significant long-term uncertainties in pension funding and Historical Legal Issues. With the end of these issues in sight, we have significantly reduced our obligations and have a clear path forward for the business. \n \"The success of our strategy also came to the fore this year. Despite the macroeconomic pressures, we have continued to build a stronger digital business with an increasing portion of much higher yielding revenues, reducing our reliance on the open market. At the same time, we have expertly managed our print business, maintaining circulation revenues as well as delivering necessary cost and efficiency plans across the Group. \n \"Together, all of these actions have put our business in a stronger position, so that we can continue to deliver great content to our audiences as well as returns for our shareholders.\" \n   \n Capital allocation priorities unchanged with commitments unwinding \n \n \n \n \n ·   After a number of years, the 2019 and 2022 Pension Triennial valuations are concluded.  There is an agreed pathway to fully funding the schemes and from 2028 pension commitments are expected to reduce by c.£40m (1) \n \n \n \n \n ·   December's High Court judgment provides a resolution on time limitation for Historical Legal Issues. This means that a significant number of outstanding claims can be resolved, and this should largely bring an end to future claims. The expected cost of settling has reduced by £20.2m \n \n \n \n \n ·   Continued strategic investment with a focus on digital capabilities, digital infrastructure and the US operations, including the launch of Mirror and Express '.com' websites \n \n \n \n \n ·   Final £7.0m deferred consideration in respect of the Express & Star acquisition has been paid \n \n \n \n \n ·   Full year dividend maintained at 7.34p reflecting the Board's confidence in the business model and understanding of the importance of dividends to shareholders \n \n \n \n \n   \n Results overview \n   \n Data-led outperformance improves digital revenue resilience despite sector decline in page views \n   \n \n \n \n \n Financial Summary (2) \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n 53 weeks to 31 Dec 2023 \n \n \n   \n \n \n Adjusted results (3) \n \n \n Statutory results \n \n \n \n \n \n \n \n \n \n \n 2023 \n \n \n 2022 \n \n \n  Change \n \n \n 2023 \n \n \n 2022 \n \n \n  Change \n \n \n \n \n Revenue \n \n \n £m \n \n \n 568.6 \n \n \n 601.4 \n \n \n (5.4)% \n \n \n 568.6 \n \n \n 601.4 \n \n \n (5.4)% \n \n \n \n \n Operating profit \n \n \n £m \n \n \n 96.5 \n \n \n 106.1 \n \n \n (9.0)% \n \n \n 46.1 \n \n \n 71.3 \n \n \n (35.3)% \n \n \n \n \n Operating profit margin \n \n \n % \n \n \n 17.0% \n \n \n 17.6% \n \n \n (0.6)% \n \n \n 8.1 % \n \n \n 11.9% \n \n \n (3.8)% \n \n \n \n \n Earnings per share \n \n \n Pence \n \n \n 21.8 \n \n \n 27.1 \n \n \n \n \n \n 6.8 \n \n \n 16.8 \n \n \n \n \n \n \n \n Net (debt)/cash (4) \n \n \n £m \n \n \n (10.1) \n \n \n 25.4 \n \n \n \n \n \n (10.1) \n \n \n 25.4 \n \n \n \n \n \n \n \n Dividend per share (5) \n \n \n Pence \n \n \n 7.34 \n \n \n 7.34 \n \n \n \n \n \n 7.34 \n \n \n 7.34 \n \n \n \n \n \n \n \n   \n \n \n \n \n ·   Revenue declined 5.4% to £568.6m, Print revenue of £438.8m (FY22: £448.6m) down 2% and Digital revenue of £127.4m (FY22: £149.8m) down 15% \n \n \n \n \n ·   Strong print circulation performance £312.5m (FY22: £307.7m) - revenue up by 2% and volumes in line with our historical print volumes. Print advertising declined by 12% to £76.6m (FY22: £86.9m), outperforming volume trends \n \n \n \n \n ·   Data-driven digital revenues down 4% (FY23: £55.3m), continue to outperform the market driven by a material increase in yields and now represent 43% of total digital revenues (FY22: 38%) \n ·   Other digital revenues which includes open market programmatically driven advertising declined by 24% due to the sector-wide decline of platform referred traffic to newsbrands (down 24%) alongside declining open market yields (down 25%) \n \n \n \n \n ·   As committed to at the start of 2023, we delivered our cost programme and improved efficiency reducing operating costs by 5.7% on a like-for-like basis to £469.5m \n \n \n \n \n ·   Maintained our strong adjusted operating profit margin of 17.0% (FY 2022: 17.6%) \n \n \n \n \n ·   Highly cash generative with adjusted operating cash flow of £91.9m (FY 2022: £92.1m) (6) and closing net debt of £10.1m \n \n \n \n \n   \n FY24 Outlook - On track to deliver market expectations \n We remain focused on delivering our Customer Value Strategy and the areas within our control, building a more resilient growing digital business and delivering efficiencies. The sector-wide decline in referral traffic will impact Q1 2024 and we expect growing momentum across our digital business thereafter. As previously announced, we have made our operations better aligned to the digital world and are on track to deliver a reduction in full-year operating costs of 5-6% for 2024. Trading performance across the first two months of 2024 has been robust, with print advertising and digital performing well and we are on track with our full year outlook but we continue to operate in an uncertain macroeconomic environment. \n   \n Q4 Trading, factors impacting performance unchanged \n \n \n \n \n 2023 Like for like (2) \n \n \n  Q1 YOY \n % \n \n \n Q2 YOY \n % \n \n \n Q3 YOY \n % \n \n \n Q4 YOY \n % \n \n \n Q4 LFL YOY % \n \n \n FY YOY \n % \n \n \n FY LFL YOY % \n \n \n \n \n Digital Revenue \n \n \n (13.4) \n \n \n (18.7) \n \n \n (13.7) \n \n \n (14.2) \n \n \n (15.0) \n \n \n (15.0) \n \n \n (15.2) \n \n \n \n \n Print Revenue \n \n \n (3.0) \n \n \n (2.5) \n \n \n (5.8) \n \n \n 2.4 \n \n \n (2.8) \n \n \n (2.2) \n \n \n (3.5) \n \n \n \n \n ·    circulation revenue \n \n \n 2.6 \n \n \n 2.2 \n \n \n (3.3) \n \n \n 5.1 \n \n \n (1.1) \n \n \n 1.6 \n \n \n 0.0 \n \n \n \n \n ·    advertising revenue \n \n \n (21.1) \n \n \n (15.7) \n \n \n (8.9) \n \n \n (1.5) \n \n \n (5.6) \n \n \n (11.9) \n \n \n (13.0) \n \n \n \n \n Group Revenue \n \n \n (5.6) \n \n \n (6.5) \n \n \n (7.8) \n \n \n (2.0) \n \n \n (6.0) \n \n \n (5.4) \n \n \n (6.5) \n \n \n \n \n The factors affecting Q4 digital revenue include the well-publicised declining digital referral volumes alongside some the volatility from a higher than usual high number of Google core updates. As a result over the year, year-on-year page views declined 24%. Data driven revenue, which is higher value and more targeted (than open market), continues to outperform and now makes up a larger part of digital revenues at 43% (FY 2019 - 24%). \n In print, circulation revenue is down slightly, remaining a resilient and predictable revenue stream. The volume decline is actively managed alongside circulation and cover price increases. \n   \n   \n Notes: \n \n \n \n \n (1) \n \n \n The estimated committed pension payments are based on the current funding schedule and are subject to future valuations and movements in the underlying assets and liabilities. \n \n \n \n \n (2) \n \n \n The results have been prepared for the 53 weeks ending 31 December 2023 and the comparative period has been prepared for the 52 week period ending 25 December 2022. The revenue and costs have been adjusted to show the numbers on a like for like basis, the additional week added £6.2m to revenue and £0.8m to operating profit. \n \n \n \n \n (3) \n \n \n Set out in note 20 is the reconciliation between the statutory and adjusted results. \n \n \n \n \n (4) \n \n \n Net debt balance comprises cash and cash equivalents of £19.9m (inclusive of £0.9m restricted cash) less bank borrowings of £30m but excludes lease obligations (note 16). \n \n \n \n \n (5) \n \n \n Full year dividend of 7.34 pence per share comprised interim dividend of 2.88 pence per share and proposed final dividend of 4.46 pence per share. \n \n \n \n \n (6) \n \n \n Adjusted cash flow is presented in note 2 1 which reconciles the adjusted operating profit to the net change in cash and cash equivalents. Note 22 provides a reconciliation between the statutory and adjusted cash flows. \n \n \n \n \n (7) \n \n \n Market expectations compiled by the company are an average of analyst published forecasts - consensus adjusted operating profit for FY24 is £97.4m. \n \n \n \n \n   \n Enquiries \n \n \n \n \n Reach plc \n \n \n   \n \n \n \n \n Jim Mullen, Chief Executive Officer \n Darren Fisher, Chief Financial Officer \n Lija Kresowaty, Head of External Communications \n Jo Britten, Investor Relations Director \n \n \n \n \n [email protected] \n +44 (0)7557 557 447 \n \n \n \n \n \nTeneo \n \n \n \[email protected] \n \n \n \n \n Giles Kernick, David Allchurch \n \n \n 020 7353 4200 \n \n \n \n \n   \n About Reach \n We're Reach plc, the UK's and Ireland's largest commercial news publisher. We're home to more than 120 trusted brands, from national titles like the Mirror, Express, Daily Record and Daily Star, to local brands like MyLondon, BelfastLive and the Manchester Evening News, to our recently launched U.S. titles. Every month, 47 million people come to us, via print and online, for trusted news, entertainment and sport. \n LEI:  213800GNI5XF3XOATR61 \n Classification: 3.1 Additional regulated information required to be disclosed under the laws of the United Kingdom \n Jim Mullen, Chief Executive Officer and Darren Fisher, Chief Financial Officer will be hosting a webcast at 9:00am (UK) on 5 March 2024. It will be followed by a live question and answer session. The presentation slides will be available on www.reachplc.com from 7.00am (UK). \n   \n You can join the webcast to watch the presentation or listen to the Q&A via the following weblink, which you can copy and paste into your browser:  https://edge.media-server.com/mmc/p/q6sqyveg \n   \n To participate in the Q&A session and register to ask a question, please access the following weblink and register your details. https://register.vevent.com/register/BI461ede9e33b144b29446ae2b5214a8dd \n   \n Please try to allow at least 10 minutes prior to the start time to provide sufficient time to access the event. \n   \n   \n Forward looking statements \n This announcement has been prepared in relation to the financial results for the 53 weeks ended 31 December 2023. Certain information contained in this announcement may constitute 'forward-looking statements', which can be identified by the use of terms such as 'may', 'will', 'would', 'could', 'should', 'expect', 'seek, 'anticipate', 'project', 'estimate', 'intend', 'continue', 'target', 'plan', 'goal', 'aim', 'achieve' or 'believe' (or the negatives thereof) or words of similar meaning. Forward-looking statements can be made in writing but also may be made verbally by members of management of the Company (including, without limitation, during management presentations to financial analysts) in connection with this announcement. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company's intentions, beliefs or current expectations concerning, among other things, the Company's results of operations, financial condition, changes in global or regional trade conditions, changes in tax rates, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks, assumptions and uncertainties that could cause actual events or results or actual performance or other financial condition or performance measures of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements. The forward-looking statements reflect knowledge and information available at the date of this announcement and the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information or to reflect any change in circumstances or in the Company's expectations or otherwise. \n   \n Chief Executive's Review \n A path to progress \n 2023 was far from a straightforward year, but it was an important and necessary one for the business. We can now look to the future having removed several long-term uncertainties and delivered market expectations, while also having progressed our Customer Value Strategy (CVS) and more firmly pointed the business towards our digital audiences. \n Much of this progress was several years in the making, for example the preparation that supported us in 2023's trial around several long-standing historical legal issues. While confronting the past in this way is not easy, the resulting judgment on time limitation for future claims around historical legal issues means that a significant number of outstanding claims can be resolved, and this should largely bring an end to future claims. \n We also took decisive action to resolve the outstanding pension funding valuations, which has similarly given us a firm end in sight for an obligation that has hindered this organisation for several decades. Together these two achievements give the business much-needed financial clarity and allow us to plan for the future with far greater certainty. \n Throughout the year, we made significant progress in becoming a data-driven, digitally-focused business, supported by a predictable and reliable print business. \n The average revenue (RPM) we generate from our digital page views is now up over 10% from last year, not something I take for granted against a challenging backdrop. While we have seen yields decline in our open market programmatic advertising, we have been able to add increased value by growing non-advertising revenue streams like ecommerce, affiliates and partnerships, reinforcing the benefit of our Customer Value Strategy (CVS). Crucially this has reduced the impact from the industry-wide decline in referral traffic, a trend that we have long expected - albeit not as quickly and severely as it came - and which CVS was always intended to mitigate. \n We continued our transformation in the year, taking action to ensure that our cost base reflects the economic environment in which we operate, and to enable us to become a digital-first organisation. To achieve this, we needed to reduce the size of some of our teams. This is not a decision I or my management team take lightly. However, recent trends have only reinforced our belief that we must be willing to make big changes to exert more control over our own destiny and protect our brands in the long term. \n The strong yield performance and efficient management of our cost base meant we delivered a sustainable operating margin of 17%, broadly in line with last year and giving us a strong foundation for 2024. \n A fast-changing environment \n We operate in a dynamic, competitive and constantly evolving market and 2023 was no exception. The period of economic volatility that began in 2020 has continued to impact the market, placing pressure on advertising spend and inflating costs for both businesses and consumers. Throughout the year, our entire industry saw a fall in referral traffic from tech platforms and we were not immune from that. Facebook, one of our largest traffic referrers, has shifted away from news content and we have contended with numerous Google core algorithm updates, each one requiring us to pivot on how we deliver content to our audiences. \n These changes have impacted our organic search traffic and therefore our growth in the near term, with page views down 24% versus last year, in line with the wider news publishing market. Despite the decline in volume, our commercial teams have expertly traded the value of our content and ad space, capitalising on our Customer Value Strategy progress to drive our revenue. \n Telling the stories that matter \n It's clear that audience behaviour and digital trends can shift rapidly, but what remains constant is our core purpose to enlighten, empower and entertain our mainstream audiences, wherever they might find us. Great content will always be at the heart of our business and this year our teams produced an abundance of it. The editorial highlights that come to mind for me personally include the Sunday Mail's exclusive scoop on the SNP scandal, the Mirror's campaign for free school meals which so far has seen Sadiq Khan announce free hot meals for all primary pupils, and the Express's campaign calling for the Government to invest more in radiotherapy and increase services for cancer patients. \n Meanwhile, the Manchester Evening News' award-winning Awaab's Law campaign has made its way through Parliament and will change many people's lives for the better. \n And while it's always an honour to watch everyday heroes at the Mirror's Pride of Britain Awards, in 2023 it was particularly inspiring to see members of the Windrush generation be recognised for their outstanding contribution to British life since the first passengers on that vessel arrived 75 years ago. \n These highlights all wield the power and impact they do precisely because of our wide reach, with our scale and editorial purpose working hand in hand. Despite the challenges of the business environment, Reach remains the largest publisher in the UK and Ireland, and continues to command the sixth largest digital audience of any UK business, reaching 36m adults digitally every month which is 72% of the online population. Our transformation actions in 2023 will ensure the continuation of our core purpose into 2024 and beyond. \n Enhancing resilience and efficiency \n Our print business continues to generate strong returns, despite the falling demand across the sector. Our experienced circulation teams use decades of data to expertly inform our approach to price increases and availability, both of which are critical to underpinning sales volumes. We maintain a track record of effective cost management and are constantly reviewing and making changes to our supply chain, optimising distribution and right-sizing our property footprint. \n Across the business, we successfully delivered a 5.7% reduction in operating costs (on a like-for-like basis), against the 5-6% reduction we targeted at the start of the year. As announced in November 2023, to set ourselves up for success in 2024 we have committed to and already started to deliver a further 5-6% reduction in our operating cost base. In the wider industry context, with many organisations now making similar decisions to those we took in late 2023, we believe our early action demonstrates responsible foresight and planning. \n As labour represents our single largest cost, there is no getting away from the fact that we have had to reduce the size of our teams to save cost and re-shape for the future. I do not underestimate the impact of these decisions on all of our people. With that in mind I committed to working through them with fairness and integrity, and to communicating openly throughout. During this period, I led a programme of small group discussions and town hall meetings with leaders and colleagues, to share updates, provide important context about the need for change, and facilitate open dialogue. Honest colleague communication remains something that I'm passionate about and committed to investing time into, all year round. \n Our emphasis on efficiency goes beyond traditional cost-cutting measures as we must also organise our ways of working to put ourselves in the best position to achieve our strategic aims and accelerate our journey to being a digital-first content organisation. As part of this work we created the Reach Studio team, which pools all of our video and audio talent in one super team that will provide multimedia content for both editorial audiences and commercial partners, maximising the value for both. \n Progressing our strategic priorities \n During volatile times it is all the more important to pursue a strategy that gives us greater long-term stability and control over our business. \n Over the year, our Customer Value Strategy (CVS) continued to progress on key metrics. Against falling referral traffic, we continued to grow our yield or RPM (+11% from 2022), an increasingly important metric as we focus on controlling digital revenue. \n We also see that as a result of our CVS progress, the return on data-driven advertising is currently 10 times more valuable than volume-related programmatic advertising returns. These figures demonstrate that whatever market trends may come, we are able to consistently adapt to optimise the value of our content, data and audience. \n Our commercial activity continues to be led by data, while focusing on direct customer relationships and more diversified revenues that support higher-quality digital earnings. These efforts are reflected in our mix, which is now made up of 43% of digital revenues generated by data-driven, higher value and better performing advertising, a trend which will continue. \n Part of the strategy has been to strengthen and expand our audience base with key demographics and into valuable regions. In 2023 we successfully launched three '.com' websites from a new US operation, which by the end of the year were regularly attracting an audience of a million a day. \n Additionally, we have worked to secure our audience, which will make us less vulnerable to changing tech platform algorithms and better able to directly engage with our millions of customers and drive them to our content. There have been several initiatives on this front, including an award-winning project to reach people via WhatsApp Communities and Channels, through which we reach more than 1.65m people directly as of February 2024. \n One early standout in this area is our Arsenal channel which sends multiple stories a day directly to over 600k people, making it the biggest Arsenal channel in the world. Through work like this we are able to speak to our audiences on our own terms and ensure that our great content reaches them. \n Our tech and commercial teams have played a key role in supporting our discoverability challenge, further developing in-house recommender tools powered by AI that point readers to content we know they'll be interested in. One of these tools alone has reduced customer bounce rate by over 10% and generated 2bn page views through the year. Our in-house first-party data capabilities, in particular our proprietary Mantis tool, will stand us in good stead as Google continues to phase out third-party cookies, a process we have now seen beginning in 2024. This will be a major shift in the landscape for publishers and advertisers, who for years have depended on third-party data to target their advertising. We will be significantly ahead of the curve on this front, with 12.3m registered customers, of which approximately 4m are active over each four-week period, and advanced capability to effectively place advertising using contextual targeting. \n We have further strengthened our position by growing our revenue streams outside traditional advertising revenue, with important work being done with affiliates and ecommerce. It's great to see the continued success of the OK! Beauty Box, which we launched in late 2020 as one of our first Customer Value Strategy initiatives, and now has c.12k paying subscribers.  \n Our goal with this work is not to replace our business model but to continuously evolve, strengthen and broaden it, and to give our audiences more choice about how they engage with our content. \n Resolving long-term uncertainties \n For several years now, the leadership team and I have been working to resolve a number of long-standing hurdles facing this business. Over the past months I am proud to say we have made real headway in clearing these. \n Ahead of 2023 we took the decision to go to trial to achieve greater certainty around the future impact of long-standing historical legal issues. The judgment we received in December set out very clear parameters on time limitation which enables us to draw a line under these issues. Simply, this means we now have a much clearer view on the estimated cost of resolving these long-standing issues and, crucially, these costs are expected to be materially lower than our previous estimates. \n Over the last four years we had not been able to come to an agreement with the MGN Pension Trustees on the 2019 triennial valuation. I cannot overstate the importance of having successfully concluded both the 2019 and 2022 triennial pension reviews for the MGN pension scheme. Agreement with our other schemes is also expected to be completed by the 31 March 2024 due date. This provides much needed clarity on the scale of our funding obligations, which are scheduled to materially step down in early 2028. \n These developments will both benefit the wider business and enable better planning for our future. Thank you to all the teams who have been involved in bringing these matters to a close. \n Exploring AI as a tool \n At the start of 2023 the conversation around how businesses and media organisations use AI was only beginning to take shape. Our editorial leaders created a cross-functional workstream to manage this complex issue, exploring the many opportunities while also gaining a firmer understanding of the risks. Their primary focus has been to test tools that help journalists to tell their stories more quickly and effectively. As a result of this work, the team has identified several areas with strong potential, such as spotting trends and analysing large volumes of data. \n We have steadily increased our use of AI through the year, while carefully controlling its roll-out, and by the end of 2023 over a dozen newsrooms were set up to use an AI tool to support their work. As we continue to test AI's potential, we ensure that every story is edited and approved by a journalist, maintaining our commitment to responsible journalism. \n Fighting our case \n I have also been putting our case to political decision-makers, ensuring that those in power and in opposition understand the issues facing Reach and the entire media industry. The stakes are high and I have had many encouraging discussions this year on the crucial questions that will decide the future of journalism in this country, such as: how can tech platforms work fairly with the media to support a free press and functioning democracy? \n 2023 marked my last year as chair of the NMA (News Media Association), but I will continue to discuss these vital issues in 2024 with our legislators, particularly as we watch the Digital Markets Bill progress through Parliament. \n Looking after our people and our future \n All of this progress is made possible by our talented and passionate colleagues in all departments. We have made many necessary changes to our teams this year but I remain committed to retaining and developing the great people who are shaping the future of this business. \n Developing our teams is just one pillar of our formalised responsible business framework, now one year in. We continue to prioritise becoming a more inclusive organisation, and in 2023 were once again recognised by Inclusive Companies with our highest ranking yet and testament to the dedication of many people here. We're also working to protect all our futures through our environmental efforts, which continued to progress this year as we implemented the systems and gathered the data that will inform our path to net zero. \n Looking ahead \n 2023 was a critical moment for this business, allowing us to put several significant issues in the past and to focus instead on looking forward, and I am confident that we are now well positioned to take on the future. \n As always, there are challenges ahead. The macro environment is unlikely to provide much relief over the near term and we are working to secure our audience and build our data-driven digital business. This will be achieved through small incremental gains and by continuing to build direct relationships with our audiences. \n Our industry has a history of change and the future will undoubtedly see yet more. That's why it's essential we set ourselves up to win by making our operations suited to an increasingly fast-paced, competitive and digital world. \n   \n   \n   \n   \n Jim Mullen \n Chief Executive Officer \n 5 March 2024 \n   \n Financial Review \n Building long term resilience \n Looking back over the year, we have made demonstrable progress to ensure the business is more resilient and able to continue its digital transformation. During a year of macroeconomic uncertainty and some significant shifts across the media sector, we delivered a resilient financial performance and made significant progress in resolving the long-standing uncertainties. \n We concluded the 2019 triennial valuation, along with the 2022 valuation, for the MGN pension scheme, and have subsequently reached agreement in principle with our other schemes and are expected to be concluded satisfactorily by the 31 March 2024 due date. This provides a clear view of our future pension commitments which will materially step down from the current rate of £60.0m in 2028. \n In December, the High Court's judgment on the Group's historical legal issues (HLI) provided clarity around time limitation. This has resulted in a material reduction in the cost of settling outstanding claims and should largely bring an end to future claims. This has led to a £20.2m year-on-year release in the HLI provision. We expect the majority, if not all, of the issued claims to be resolved during 2024 and 2025 which is a much shorter time frame than previously anticipated. Resolving these two matters has reduced uncertainty and allows us to plan more effectively for the long term. \n The macroeconomic environment in 2023 impacted advertising spend, and there was a material step down in digital referral traffic from major platforms such as Facebook, which has deprioritised news content. This has driven a 24% year-on-year decline in digital page views, which alongside depressed open market yields (year on year decline 25%), adversely impacted digital revenue, which declined by £22.4m or 15% to £127.4m in 2023. \n Conversely, our data-driven revenues performed robustly, only declining 4% year-on year, to now represent 43% of digital revenues (2022: 38%). To compensate for the industry headwinds we took clear actions to continue to diversify our digital revenues and trade our digital assets harder. We prioritised areas within our Customer Value Strategy which are higher yielding and within our control. As a result revenue per thousand pages (RPM) across our digital estate increased by 11%. These actions have resulted in improved resilience, with areas of strong growth including curated marketplaces, ecommerce and affiliates. \n We continued to invest in our digital expansion. We launched our three US-based sites, invested in Curiously, our social-first, video-focused brand, and invested in new products to develop our curated marketplace capability. \n The print business remained robust and delivered £438.8m (2022: £448.6m) of revenue, representing just over 75% of the Group's revenue with a strong performance in circulation and print advertising. The teams have access to a significant amount of data which has built up over many years and this is used to determine optimal levels of availability and cover price increases. These dynamics have offset the volume decline with circulation revenue growing 1.6%. Print advertising declined by £10.3m, or 11.9% year-on-year; this was a solid performance, outperforming volume trends which were down 17% year-on-year. \n Focus on efficiency \n Through our cost action plan we continue to focus on efficiency, setting up our operations to adapt and thrive in \n a fast-paced and competitive digital landscape. At the start of the year we committed to reducing total operating costs by 5-6%, and on a 52 week like-for-like basis we achieved a 5.7% reduction. Inflation moderated through the year following the material increase in the cost of newsprint in 2022, some of which unwound in 2023. Overall newsprint costs reduced by 21%, mainly driven by the decline in production volumes. We have implemented restructuring and efficiency programmes and as part of these, headcount has reduced by 14% over the year. Our largest operating cost, labour, reduced by 5% year-on year. Together these actions have driven higher levels of efficiency, protecting the strong operating margin of 17% and mean we are better positioned for the long term. \n Strong balance sheet \n The Group has a robust balance sheet with a closing cash balance of £19.9m, and net debt of £10.1m (inclusive of £0.9m restricted cash). The Group has £30.0m drawn down on its revolving credit facility. The Group's revolving credit facility of £120.0m is in place until November 2026. \n Cash management remains a priority. Group cash conversion was strong at 95% supported by efficient working capital management. Pension scheme contributions during the year were £60.0m, HLI claim settlements totalled £4.6m and we incurred £18.8m of restructuring payments. Together these non-operating cash outflows amount to £83.4m. \n In December 2023 the Group completed a £605.4m capital reduction, converting the entirety of the share premium account into distributable reserves, which will support the payment of dividends into the future. This did not involve any return of capital or payment to shareholders. \n Looking ahead \n The strength of our print business underpins the cash generation and profitability of the Group. We will continue to carefully balance cover price increases and availability to deliver a robust circulation performance despite the falling demand for print. Print revenue funds the Group's financial commitments and enables investment as we continue to build our digital business. \n This year we will continue to invest in product and new markets including the US and developing the AI-powered Mantis ad tech. We will also increase our use of AI tools to support increased productivity in the newsrooms, under the continued guidance of our journalists. \n Across our digital business we continue to build a more sustainable higher-quality digital mix, with 43% of digital revenue now data-driven. The depressed open market yields, compounded by the decline in page views, have reinforced the benefits of our data-driven Customer Value Strategy. This strategy will continue to increase yields and grow data-driven revenues. \n As communicated in 2023, we have already actioned a further programme of cost reduction for 2024, which we are confident will support a 5-6% in-year reduction in our operating costs and protect our operating margin. Savings have been generated throughout the business and include further steps in creating a digitally-led editorial business, for example the creation of a single video studio. \n Summary income statement \n \n \n \n \n \n \n \n   \n Adjusted \n 2023 \n £m \n \n \n   \n Adjusted \n 2022 \n £m \n \n \n   \n YOY \n change \n % \n \n \n   \n Statutory \n 2023 \n £m \n \n \n   \n Statutory \n 2022 \n £m \n \n \n   \n YOY \n change \n % \n \n \n \n \n Revenue \n \n \n 568.6 \n \n \n 601.4 \n \n \n (5.4) \n \n \n 568.6 \n \n \n 601.4 \n \n \n (5.4) \n \n \n \n \n Costs \n \n \n (475.0) \n \n \n (498.1) \n \n \n 4.6 \n \n \n (523.9) \n \n \n (531.5) \n \n \n 1.4 \n \n \n \n \n Associates \n \n \n 2.9 \n \n \n 2.8 \n \n \n 3.6 \n \n \n 1.4 \n \n \n 1.4 \n \n \n 0.0 \n \n \n \n \n Operating profit \n \n \n 96.5 \n \n \n 106.1 \n \n \n (9.0) \n \n \n 46.1 \n \n \n 71.3 \n \n \n (35.3) \n \n \n \n \n Finance costs \n \n \n (3.5) \n \n \n (2.8) \n \n \n (25.0) \n \n \n (9.4) \n \n \n (5.1) \n \n \n (84.3) \n \n \n \n \n Profit before tax \n \n \n 93.0 \n \n \n 103.3 \n \n \n (10.0) \n \n \n 36.7 \n \n \n 66.2 \n \n \n (44.6) \n \n \n \n \n Tax charge \n \n \n (24.6) \n \n \n (18.8) \n \n \n (30.9) \n \n \n (15.2) \n \n \n (13.9) \n \n \n (9.4) \n \n \n \n \n Profit after tax \n \n \n 68.4 \n \n \n 84.5 \n \n \n (19.1) \n \n \n 21.5 \n \n \n 52.3 \n \n \n (58.9) \n \n \n \n \n Earnings per share - basic (p) \n \n \n 21.8 \n \n \n 27.1 \n \n \n (19.6) \n \n \n 6.8 \n \n \n 16.8 \n \n \n (59.5) \n \n \n \n \n   \n The results have been prepared for the 53 weeks ending 31 December 2023. The comparative period has been prepared for the 52 week period ending 25 December 2022. The additional week contributed £6.2m of revenue and £0.8m of operating profit. \n Group revenue fell by £32.8m or 5.4% to £568.6m with print down 2.2% and digital down 15.0%. \n Adjusted costs decreased by £23.1m or 4.6% to £475.0m, partially offsetting the decline in revenue. This was driven by the reduction in circulation volumes and a small unwinding of some of last year's newsprint cost inflation, alongside the ongoing cost reduction programme. Statutory costs were lower by £7.6m or 1.4%, with the increase in operating adjusted items of £15.5m (£48.9m in 2023 versus £33.4m in 2022) partially offsetting the reduction in operating costs. \n Adjusted operating profit  decreased by £9.6m or 9.0% to £96.5m, driven by the decline in revenue partially offset by the savings in costs. The adjusted operating margin of 17.0% in 2023 compares to 17.6% for 2022. Statutory operating profit decreased by £25.2m or 35.3% primarily due to the increase in operating adjusted items which include restructuring charges in respect of cost reduction measures and impairment of the finance lease receivable and recognition of onerous costs following the sub-lessee of a vacant print site entering administration, partially offset with the release of the provision for historical legal issues. \n Adjusted earnings per share decreased by 5.3p or 19.6% to 21.8p. Statutory earnings per share decreased by 10.0p to 6.8p, principally due to the decrease in operating profit. \n Revenue \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n YOY change % \n \n \n \n \n Print \n \n \n \n \n \n   \n \n \n   \n \n \n 438.8 \n \n \n 448.6 \n \n \n (2.2) \n \n \n \n \n    Circulation \n \n \n \n \n \n   \n \n \n   \n \n \n 312.5 \n \n \n 307.7 \n \n \n 1.6 \n \n \n \n \n    Advertising \n \n \n \n \n \n   \n \n \n   \n \n \n 76.6 \n \n \n 86.9 \n \n \n (11.9) \n \n \n \n \n    Printing \n \n \n \n \n \n   \n \n \n   \n \n \n 20.2 \n \n \n 23.1 \n \n \n (12.7) \n \n \n \n \n    Other \n \n \n \n \n \n   \n \n \n   \n \n \n 29.5 \n \n \n 30.9 \n \n \n (4.5) \n \n \n \n \n Digital \n \n \n \n \n \n   \n \n \n   \n \n \n 127.4 \n \n \n 149.8 \n \n \n (15.0) \n \n \n \n \n Other \n \n \n \n \n \n   \n \n \n   \n \n \n 2.4 \n \n \n 3.0 \n \n \n (16.9) \n \n \n \n \n Total revenue \n \n \n \n \n \n   \n \n \n   \n \n \n 568.6 \n \n \n 601.4 \n \n \n (5.4) \n \n \n \n \n   \n Revenue declined overall by £32.8m or 5.4%. \n Print revenue decreased by £9.8m or 2.2% (2022: down 3.5%). Circulation performance was strong with revenue up 1.6% (2022: down 1.7%) driven by carefully considered cover price increases, which were above recent historical levels, offsetting the ongoing decline in circulation volumes. \n Print advertising revenue declined by £10.3m or 11.9% (2022: down 15.9%); but outperformed the print volume decline of 17%. During the year the strongest performing sectors for print advertising include food retail, travel, the government and entertainment and media, which is very similar to the prior year. \n Print revenue also includes external or third-party printing revenues and other print-related revenues which decreased by £4.3m, or 8.0% (2022: increased 10.4%). These revenues are largely contracted on a cost-plus basis, and reflect the external market demand for print. \n Digital revenue decreased by 15.0% to £127.4m (2022: 1.0% increase). Revenue has been impacted by lower advertising demand during a period of macroeconomic uncertainty alongside a material reduction in page views. Major platforms including Facebook have deprioritised news content over the year which in turn has driven a reduction in referral traffic for publishers across the sector. These changes have adversely impacted our revenues which were directly impacted by page view volume. Strategically driven or 'data-led revenues', which are more resilient and higher yielding, performed robustly. Data-driven revenues were £55.3m, down 4.0%, and now represent 43% of digital (2022: 38%). \n   \n Costs \n \n \n \n \n \n \n \n 2023 \n Adjusted \n £m \n \n \n 2022 \n Adjusted \n £m \n \n \n YOY \n change \n % \n \n \n 2023 \n Statutory \n £m \n \n \n 2022 \n Statutory \n £m \n \n \n YOY \n change \n % \n \n \n \n \n Labour \n \n \n (223.0) \n \n \n (234.7) \n \n \n 5.0 \n \n \n (223.0) \n \n \n (234.7) \n \n \n 5.0 \n \n \n \n \n Newsprint \n \n \n (59.5) \n \n \n (75.4) \n \n \n 21.1 \n \n \n (59.5) \n \n \n (75.4) \n \n \n 21.1 \n \n \n \n \n Depreciation and amortisation \n \n \n (21.6) \n \n \n (20.2) \n \n \n (7.0) \n \n \n (21.6) \n \n \n (20.2) \n \n \n (7.0) \n \n \n \n \n Other \n \n \n (170.9) \n \n \n (167.8) \n \n \n (1.9) \n \n \n (219.8) \n \n \n (201.2) \n \n \n (9.2) \n \n \n \n \n Total costs \n \n \n (475.0) \n \n \n (498.1) \n \n \n 4.6 \n \n \n (523.9) \n \n \n (531.5) \n \n \n 1.4 \n \n \n \n \n Adjusted costs of £475.0m (2022: £498.1m) decreased by £23.1m or 4.6%. On a 52 week like-for-like basis adjusted costs declined by 5.7%. Labour costs decreased 5% as we implemented our restructuring and efficiency programme  with headcount falling by 14% over the year. Newsprint costs reduced from lower volumes, and an unwinding of some of last year's newsprint cost inflation. \n Statutory costs were lower by £7.6m or 1.4%, a less significant reduction due to higher operating adjusted items which were £15.5m higher (£48.9m in 2023 compared to £33.4m in 2022). \n Operating adjusted items included in statutory costs above related to the following: \n \n \n \n \n   \n   \n \n \n Statutory \n 2023 \n £m \n \n \n Statutory \n 2022 \n £m \n \n \n \n \n Provision for historical legal issues \n \n \n 20.2 \n \n \n (11.0) \n \n \n \n \n Restructuring charges in respect of cost reduction measures \n \n \n (26.9) \n \n \n (15.5) \n \n \n \n \n (Impairment of sublease)/sublet of closed print plant \n \n \n (19.4) \n \n \n 16.6 \n \n \n \n \n Other property-related costs \n \n \n (8.0) \n \n \n (4.6) \n \n \n \n \n Pension administrative expenses and past service costs \n \n \n (5.5) \n \n \n (14.8) \n \n \n \n \n Other items \n \n \n (9.3) \n \n \n (4.1) \n \n \n \n \n Operating adjusted items in statutory costs \n \n \n (48.9) \n \n \n (33.4) \n \n \n \n \n The Group has recorded a £20.2m decrease (2022: £11.0m increase) in the provision for historical legal issues relating to the cost associated with dealing with and resolving civil claims in relation to historical phone hacking and unlawful information gathering. This material reduction is driven by the judgment handed down during December 2023 in respect of test claims. As a result of the ruling, all claims issued after 31 October 2020 are now likely to be dismissed other than where individuals can demonstrate specific exceptional circumstances, and therefore this has significantly reduced the amounts that are expected to be paid out. \n Restructuring charges of £26.9m (2022: £15.5m) principally relate to cost management actions taken in the period. \n Following the sublet of the vacant print site during 2022 which resulted in the reversal of an impairment in right-of-use assets of £11.0m and previously onerous costs of the vacant site of £5.6m, the sub-lessee entered into administration during 2023. As a result, the corresponding £10.8m finance lease receivable has been impaired along with the subsequent recognition of onerous costs of £8.6m of the vacant site during the period.  \n Other property-related costs comprise the impairment of vacant freehold property costs (£4.3m), vacant freehold property-related costs (£1.4m) and onerous lease and related costs (£2.6m) less the profit on sale of assets (£0.3m). In 2022, other property-related costs related to the impairment of vacant freehold property (£4.2m) and plant and equipment (£0.8m) less the profit on sale of impaired assets (£0.4m). \n Pension costs of £5.5m (2022: £14.8m) comprise pension administrative expenses (2022: £4.2m). 2022 also included £10.6m of past service costs relating to a Barber Window equalisation adjustment. \n Other adjusted items comprise the Group's legal fees in respect of historical legal issues (£5.3m), adviser costs in relation to the triennial funding valuations (£2.5m), internal pension administrative expenses (£0.6m), corporate simplification costs (£0.5m), and other restructuring-related project costs (£0.7m) less a reduction in National Insurance costs relating to share awards (£0.3m). In 2022, other adjusted items comprise the Group's legal fees in respect of historical legal issues (£5.2m), adviser costs in relation to the triennial funding valuations (£1.6m), less a reduction in National Insurance costs relating to share awards (£2.7m). \n Adjusted operating profit bridge \n \n \n \n \n   \n   \n \n \n   \n \n \n   \n \n \n Adjusted \n £m \n \n \n \n \n FY22 \n \n \n   \n \n \n \n \n \n 106 \n \n \n \n \n Revenue mix \n \n \n   \n \n \n \n \n \n (33) \n \n \n \n \n Inflation & volume \n \n \n   \n \n \n \n \n \n 6 \n \n \n \n \n Investment \n \n \n   \n \n \n \n \n \n (13) \n \n \n \n \n Efficiencies \n \n \n   \n \n \n \n \n \n 30 \n \n \n \n \n Other \n \n \n   \n \n \n \n \n \n 1 \n \n \n \n \n FY23 \n \n \n   \n \n \n \n \n \n 97 \n \n \n \n \n   \n Adjusted operating profit of £96.5m was down £9.6m or 9.0% reflecting the decline in revenue of £32.8m or 5.4%, mitigated by a £23.1m or 4.6% decrease in operating costs. This meant that adjusted operating margin decreased by 0.6 percentage points from 17.6% in 2022 to 17.0% in 2023. \n The net cost saving of £23m was driven mainly from efficiencies (£30m). Half of these efficiencies related to labour costs which were lower following the cost reduction programmes with the balance coming from the rationalisation of our property portfolio and other operational costs. Investments were made into our US operations and youth brand, Curiously, alongside some digital product development. \n Reconciliation of statutory to adjusted results \n \n \n \n \n   \n   \n \n \n   \n Statutory \n results \n £m \n \n \n Operating \n adjusted \n items \n £m \n \n \n Pension \n finance \n charge \n £m \n \n \n   \n Adjusted \n results \n £m \n \n \n \n \n Revenue \n \n \n 568.6 \n \n \n - \n \n \n - \n \n \n 568.6 \n \n \n \n \n Operating profit \n \n \n 46.1 \n \n \n 50.4 \n \n \n - \n \n \n 96.5 \n \n \n \n \n Profit before tax \n \n \n 36.7 \n \n \n 50.4 \n \n \n 5.9 \n \n \n 93.0 \n \n \n \n \n Profit after tax \n \n \n 21.5 \n \n \n 42.4 \n \n \n 4.5 \n \n \n 68.4 \n \n \n \n \n Basic earnings per share (p) \n \n \n 6.8 \n \n \n 13.6 \n \n \n 1.4 \n \n \n 21.8 \n \n \n \n \n The Group excludes adjusted operating items and the pension finance charge from the adjusted results. Adjusted items relate to costs or income that derive from events or transactions that fall within the normal activities of the Group, but are excluded from the Group's adjusted profit measures, individually or, if of a similar type in aggregate, due to their size and/or nature in order to better reflect management's view of the performance of the Group. \n Items are adjusted on the basis that they distort the underlying performance of the business where they relate to material items that can recur (including impairment, restructuring and tax rate changes) or relate to historical liabilities (including historical legal and contractual issues, defined benefit pension schemes which are all closed to future accrual). \n Other items may be included in adjusted items if they are not expected to recur in future years, such as property rationalisation and items such as transaction and restructuring costs incurred on acquisitions or the profit or loss on the sale of subsidiaries, associates or freehold buildings. \n Management excludes these from the results that it uses to manage the business and on which bonuses are based to reflect the underlying performance of the business and believes that the adjusted results, presented alongside the statutory results, provide users with additional useful information. Further details on the items excluded from the adjusted results are set out in note 20. \n Like-for-like comparison \n \n \n \n \n   \n   \n   \n   \n \n \n   \n \n \n   \n \n \n 53 week \n FY 2023 \n YOY \n % \n \n \n LFL 52 week \n FY 2023 \n YOY \n % \n \n \n \n \n Digital \n \n \n \n \n \n \n \n \n (15.0) \n \n \n (15.2) \n \n \n \n \n Print \n \n \n \n \n \n \n \n \n (2.2) \n \n \n (3.5) \n \n \n \n \n    Circulation \n \n \n \n \n \n \n \n \n 1.6 \n \n \n 0.0 \n \n \n \n \n    Advertising \n \n \n \n \n \n \n \n \n (11.9) \n \n \n (13.0) \n \n \n \n \n Group revenue \n \n \n \n \n \n \n \n \n (5.4) \n \n \n (6.5) \n \n \n \n \n   \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Adjusted operating costs YoY decline % \n \n \n \n \n \n \n \n \n (4.6) \n \n \n (5.7) \n \n \n \n \n   \n The results have been prepared for the 53 weeks ending 31 December 2023 and the comparative period has been prepared for the 52 week period ending 25 December 2022. The revenue and costs have been adjusted to show the numbers on a like-for-like basis. The additional week added £6.2m to revenue and £0.8m to operating profit. \n Balance sheet and cash flows \n Historical legal issues provision \n The historical legal issues provision relates to the cost associated with dealing with and resolving civil claims in relation to historical phone hacking and unlawful information gathering. Payments of £4.6m have been made during the year and the provision has decreased by £20.2m, driven by the judgment handed down on the test claims during December 2023. At the year end a provision of £18.2m remains outstanding and this represents the current best estimate of the amount required to resolve this historical matter. Further details relating to the nature of the liability, the calculation basis and the expected timing of payments are set out in note 18. \n Decrease in accounting pension deficit \n The IAS 19 pension deficit (net of deferred tax) in respect of the Group's defined benefit pension schemes decreased by £36.8m from £113.9m to £77.1m at the year end. The decrease in the deficit is due to the net aggregate of many factors, mostly notable changes in market conditions leading to an increase in discount rate, returns on the schemes' assets, Group contributions and the easing of inflation. We concluded the 2019 triennial valuation, along with the 2022 valuation, for the MGN pension scheme, and have subsequently reached agreement with our other schemes which are expected to be completed by the 31 March 2024 due date. The Group now benefits from an agreed position on future pension funding commitments.  \n During 2022, similar to the West Ferry scheme, the Trustees of the Express Newspapers Senior Managers Pension Fund purchased a bulk annuity (at no cost to the Group) and the scheme now has all pension liabilities covered by annuity policies. Group contributions in respect of the remaining four defined benefit schemes in 2023 were £60.0m (2022: £55.1m). Contributions in 2024 are expected to be £60.9m under the current schedule of contributions for the four schemes. \n Deferred consideration \n Deferred consideration is attributable to the acquisition of Express & Star. The third and final payment of £7.0m was made on 28 February 2023. There is no remaining liability in relation to deferred consideration. \n Profit to cash measure \n This ratio is a measure of our effectiveness at working capital management. It is calculated as our adjusted operating cash flow as a proportion of adjusted operating profit. \n In order to calculate this measure, adjusted operating cash flow has been aligned to the definition of adjusted operating profit. The change is largely driven by the exclusion of the cash flow impact of restructuring payments and other items classified as adjusted items in the income statement.  This has resulted in an increase in adjusted operating cash flow in 2022 from £64.8m to £92.1m. \n   \n \n \n \n \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n   \n \n \n \n \n Adjusted operating profit \n \n \n 96.5 \n \n \n 106.1 \n \n \n \n \n \n \n \n Depreciation and amortisation \n \n \n 21.6 \n \n \n 20.2 \n \n \n \n \n \n \n \n Adjusted EBITDA \n \n \n 118.1 \n \n \n 126.3 \n \n \n \n \n \n \n \n Working capital movements \n \n \n (3.9) \n \n \n (12.3) \n \n \n \n \n \n \n \n Lease payments \n \n \n (5.3) \n \n \n (6.7) \n \n \n \n \n \n \n \n Capital expenditure \n \n \n (15.4) \n \n \n (13.3) \n \n \n \n \n \n \n \n Other \n \n \n 1.3 \n \n \n 0.9 \n \n \n \n \n \n \n \n Associates \n \n \n (2.9) \n \n \n (2.8) \n \n \n \n \n \n \n \n Adjusted operating cash flow \n \n \n 91.9 \n \n \n 92.1 \n \n \n \n \n \n \n \n Profit to cash ratio \n \n \n 95% \n \n \n 87% \n \n \n \n \n \n \n \n   \n During the year, adjusted operating profit was £96.5m (2022: £106.1m) and the adjusted operating cash inflow was £91.9m (2022: £92.1m) with a profit to cash ratio of 95% reflecting ongoing cash management. Working capital improved year-on-year, predominantly from excess newsprint inventories which built up during the escalation of the war in Ukraine in 2022 partially unwinding during 2023. \n Uses for cash \n The table below shows how the Group is using the cash generated from operations to meet its financial obligations. Adjusted cash generated from operations is adjusted operating cash flow excluding the impact of net lease payments and capital expenditure. \n   \n \n \n \n \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n Adjusted cash generated from operations \n \n \n 112.6 \n \n \n 112.1 \n \n \n \n \n Pension payments \n \n \n (60.0) \n \n \n (55.1) \n \n \n \n \n Historical legal issues \n \n \n (4.6) \n \n \n (9.0) \n \n \n \n \n Restructuring \n \n \n (18.8) \n \n \n (13.8) \n \n \n \n \n Capital expenditure \n \n \n (15.4) \n \n \n (13.3) \n \n \n \n \n Final payment on acquisition \n \n \n (7.0) \n \n \n (17.1) \n \n \n \n \n Other \n \n \n (19.2) \n \n \n (21.2) \n \n \n \n \n Cash flow before returns to shareholders \n \n \n (12.4) \n \n \n (17.4) \n \n \n \n \n Dividends paid \n \n \n (23.1) \n \n \n (22.9) \n \n \n \n \n Cash flow after returns to shareholders \n \n \n (35.5) \n \n \n (40.3) \n \n \n \n \n Net (debt)/cash \n \n \n (10.1) \n \n \n 25.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Material uses for cash include pension contributions totalling £60.0m (2022: £55.1m) and restructuring payments of £18.8m (2022: £13.8m) which mainly relate to cost reduction programmes implemented at the start of the year. The final payment on acquisition of £7.0m (2022: £17.1m) relates to the Express & Star. Other comprises professional fees in respect of historical legal issues and triennial funding valuations of £7.8m (2022: £6.8m), net lease payments of £5.3m (2022: £6.7m), interest paid on borrowings of £3.1m (2022: £1.9m) and other movements which account for the balance of cash flows. \n The Group paid a dividend in the period of £23.1m (2022: £22.9m). \n Cash balances \n Net debt at the year end is £10.1m (inclusive of £0.9m restricted cash), from a net cash position of £25.4m at the end of 2022. The Group has £30.0m drawn down on its revolving credit facility, with the overall total cash position of £19.9m at the year end. The Group has a revolving credit facility of £120.0m, which expires during November 2026. \n Cash generated from operations on a statutory basis was £76.4m (2022: £80.1m). The Group presents an adjusted cash flow which reconciles the adjusted operating profit to the net change in cash and cash equivalents, which is set out in note 21. A reconciliation between the statutory and the adjusted cash flow is set out in note 22. The adjusted operating cash flow was £91.9m (2022: £92.1m). \n Dividends \n The Board proposes a final dividend of 4.46 pence per share for 2023 (2022: 4.46 pence). The final dividend, which is subject to approval by shareholders at the Annual General Meeting on 2 May 2024, will be paid on 31 May 2024 to shareholders on the register at 10 May 2024. \n An interim dividend for 2023 of 2.88 pence per share was paid on 22 September 2023 (2022: 2.88 pence per share). \n In proposing a final dividend of 4.46 pence per share for 2023 (2022: 4.46 pence per share), the Board has considered all investment requirements and its funding commitments to the defined benefit pension schemes. \n Current trading and outlook \n We remain focused on delivering our Customer Value Strategy and the areas within our control, building a more resilient growing digital business and delivering efficiencies. The sector-wide decline in referral traffic will impact Q1 2024. We expect growing momentum across our digital business thereafter. As previously announced we have made our operations better suited for a digital world and are on track to deliver a 5-6% reduction in full-year operating costs in 2024. \n   \n Our financial priorities remain profitability and cash. Next year we expect working capital requirements excluding provisions to be broadly neutral, and a small step down in our capital expenditure. We have started the process to sell a number of our freehold properties which will support cash generation. Our financial commitments for the year ahead are similar to 2023, including the pensions contributions which will be broadly unchanged; we expect an acceleration in the resolution of existing HLI claims and a further £13m restructuring outflow relating to severance payments for the recent change programme. \n   \n Trading performance across the first two months of 2024 has been robust, with print advertising and digital performing well. We are on track with our full year outlook, but continue to operate in an uncertain macroeconomic environment. \n   \n   \n   \n   \n Darren Fisher \n Chief Financial Officer \n 5 March 2024 \n   \n Statement of Directors' Responsibilities \n The directors are responsible for preparing the Preliminary Audited Results Announcement in accordance with applicable laws and regulations. The responsibility statement below has been prepared in connection with the Company's full Annual Report for the 53 weeks ended 31 December 2023. Certain points thereof are not included within this Preliminary Audited Results Announcement. \n The directors confirm to the best of their knowledge: \n a)    the consolidated financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit and loss of the Group; and \n b)    the Preliminary Audited Results Announcement includes a fair review of the development and performance of the business and the position of the Group together with a description of the principal risks and uncertainties that it faces. \n   \n By order of the Board of Directors \n   \n   \n Darren Fisher \n Chief Financial Officer \n 5 March 2024 \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n   \n \n \n   \n Consolidated income statement \n for the 53 weeks ended 31 December 2023 (52 weeks ended 25 December 2022) \n   \n   \n \n \n \n \n \n \n \n   \n   \n   \n notes \n \n \n   \n Adjusted 2023 \n £m \n \n \n Adjusted items \n 2023 \n £m \n \n \n   \n Statutory \n 2023 \n £m \n \n \n   \n Adjusted \n 2022 \n £m \n \n \n Adjusted items \n 2022 \n £m \n \n \n   \n Statutory \n 2022 \n £m \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n 4 \n \n \n 568.6 \n \n \n - \n \n \n 568.6 \n \n \n 601.4 \n \n \n - \n \n \n 601.4 \n \n \n \n \n Cost of sales \n \n \n \n \n \n (344.7) \n \n \n - \n \n \n (344.7) \n \n \n (375.7) \n \n \n - \n \n \n (375.7) \n \n \n \n \n Gross profit \n \n \n \n \n \n 223.9 \n \n \n - \n \n \n 223.9 \n \n \n 225.7 \n \n \n - \n \n \n 225.7 \n \n \n \n \n Distribution costs \n \n \n \n \n \n (36.9) \n \n \n - \n \n \n (36.9) \n \n \n (38.1) \n \n \n - \n \n \n (38.1) \n \n \n \n \n Administrative expenses \n \n \n 5 \n \n \n (93.4) \n \n \n (48.9) \n \n \n (142.3) \n \n \n (84.3) \n \n \n (33.4) \n \n \n (117.7) \n \n \n \n \n Share of results of associates \n \n \n \n \n \n 2.9 \n \n \n (1.5) \n \n \n 1.4 \n \n \n 2.8 \n \n \n (1.4) \n \n \n 1.4 \n \n \n \n \n Operating profit \n \n \n \n \n \n 96.5 \n \n \n (50.4) \n \n \n 46.1 \n \n \n 106.1 \n \n \n (34.8) \n \n \n 71.3 \n \n \n \n \n Interest income \n \n \n 6 \n \n \n 1.0 \n \n \n - \n \n \n 1.0 \n \n \n 0.1 \n \n \n - \n \n \n 0.1 \n \n \n \n \n Finance costs \n \n \n 7 \n \n \n (4.5) \n \n \n - \n \n \n (4.5) \n \n \n (2.9) \n \n \n - \n \n \n (2.9) \n \n \n \n \n Pension finance charge \n \n \n 15 \n \n \n - \n \n \n (5.9) \n \n \n (5.9) \n \n \n - \n \n \n (2.3) \n \n \n (2.3) \n \n \n \n \n Profit before tax \n \n \n \n \n \n 93.0 \n \n \n (56.3) \n \n \n 36.7 \n \n \n 103.3 \n \n \n (37.1) \n \n \n 66.2 \n \n \n \n \n Tax charge \n \n \n 8 \n \n \n (24.6) \n \n \n 9.4 \n \n \n (15.2) \n \n \n (18.8) \n \n \n 4.9 \n \n \n (13.9) \n \n \n \n \n Profit for the period attributable to equity holders of the parent \n \n \n \n \n \n 68.4 \n \n \n (46.9) \n \n \n 21.5 \n \n \n 84.5 \n \n \n (32.2) \n \n \n 52.3 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Earnings per share \n \n \n notes \n \n \n 2023 \n Pence \n \n \n   \n \n \n 2023 \n Pence \n \n \n 2022 \n Pence \n \n \n \n \n \n 2022 \n Pence \n \n \n \n \n Earnings per share - basic \n \n \n 10 \n \n \n 21.8 \n \n \n   \n \n \n 6.8 \n \n \n 27.1 \n \n \n \n \n \n 16.8 \n \n \n \n \n Earnings per share - diluted \n \n \n 10 \n \n \n 21.6 \n \n \n   \n \n \n 6.8 \n \n \n 26.7 \n \n \n \n \n \n 16.5 \n \n \n \n \n The above results were derived from continuing operations. Set out in note 20 is the reconciliation between the statutory and adjusted results. \n   \n Consolidated statement of comprehensive income \n for the 53 weeks ended 31 December 2023 (52 weeks ended 25 December 2022) \n \n \n \n \n \n \n \n   \n notes \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Profit for the period \n \n \n \n \n \n 21.5 \n \n \n 52.3 \n \n \n \n \n Items that will not be reclassified to profit and loss: \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Actuarial loss on defined benefit pension schemes \n \n \n 15 \n \n \n (0.5) \n \n \n (35.0) \n \n \n \n \n Tax on actuarial loss on defined benefit pension schemes \n \n \n 8 \n \n \n 0.1 \n \n \n 7.4 \n \n \n \n \n Share of items recognised by associates after tax \n \n \n \n \n \n 0.4 \n \n \n (1.7) \n \n \n \n \n Other comprehensive loss for the period \n \n \n   \n \n \n - \n \n \n (29.3) \n \n \n \n \n Total comprehensive income for the period \n \n \n   \n \n \n 21.5 \n \n \n 23.0 \n \n \n \n \n   \n Consolidated statement of changes in equity \n for the 53 weeks ended 31 December 2023 (52 weeks ended 25 December 2022) \n   \n \n \n \n \n \n \n \n   \n   \n Share \n capital \n £m \n \n \n   \n Share premium \n account \n £m \n \n \n   \n   \n Merger \n reserve \n £m \n \n \n   \n Capital \n redemption \n reserve \n £m \n \n \n Retained earnings / (accumulated loss) and other reserves \n £m \n \n \n   \n   \n   \n Total \n £m \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n At 27 December 2021 \n \n \n 32.2 \n \n \n 605.4 \n \n \n 17.4 \n \n \n 4.4 \n \n \n (20.6) \n \n \n 638.8 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 52.3 \n \n \n 52.3 \n \n \n \n \n Other comprehensive loss for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (29.3) \n \n \n (29.3) \n \n \n \n \n Total comprehensive income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 23.0 \n \n \n 23.0 \n \n \n \n \n Purchase of own shares (note 19) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (1.0) \n \n \n (1.0) \n \n \n \n \n Credit to equity for equity-settled share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.8 \n \n \n 1.8 \n \n \n \n \n Deferred tax charge for equity-settled share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (2.2) \n \n \n (2.2) \n \n \n \n \n Dividends paid \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (22.9) \n \n \n (22.9) \n \n \n \n \n At 25 December 2022 \n \n \n 32.2 \n \n \n 605.4 \n \n \n 17.4 \n \n \n 4.4 \n \n \n (21.9) \n \n \n 637.5 \n \n \n \n \n Profit for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 21.5 \n \n \n 21.5 \n \n \n \n \n Other comprehensive loss for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Total comprehensive income for the period \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 21.5 \n \n \n 21.5 \n \n \n \n \n Credit to equity for equity-settled share-based payments \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 1.3 \n \n \n 1.3 \n \n \n \n \n Dividends paid (note 9) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (23.1) \n \n \n (23.1) \n \n \n \n \n Capital reduction (note 19) \n \n \n - \n \n \n (605.4) \n \n \n - \n \n \n - \n \n \n 605.4 \n \n \n - \n \n \n \n \n At 31 December 2023 \n \n \n 32.2 \n \n \n - \n \n \n 17.4 \n \n \n 4.4 \n \n \n 583.2 \n \n \n 637.2 \n \n \n \n \n   \n Consolidated cash flow statement \n for the 53 weeks ended 31 December 2023 (52 weeks ended 25 December 2022) \n \n \n \n \n \n \n \n   \n notes \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n Cash flows from operating activities \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Cash generated from operations \n \n \n 11 \n \n \n 76.4 \n \n \n 80.1 \n \n \n \n \n Pension deficit funding payments \n \n \n 15 \n \n \n (60.0) \n \n \n (55.1) \n \n \n \n \n Income tax paid \n \n \n \n \n \n (0.5) \n \n \n (5.0) \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n 15.9 \n \n \n 20.0 \n \n \n \n \n Investing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Interest received \n \n \n 6 \n \n \n 0.6 \n \n \n 0.1 \n \n \n \n \n Dividends received from associated undertakings \n \n \n \n \n \n 1.9 \n \n \n 2.5 \n \n \n \n \n Proceeds on disposal of property, plant and equipment \n \n \n \n \n \n 0.9 \n \n \n 0.4 \n \n \n \n \n Purchases of property, plant and equipment \n \n \n \n \n \n (3.5) \n \n \n (3.0) \n \n \n \n \n Expenditure on capitalised internally generated development \n \n \n 12 \n \n \n (12.8) \n \n \n (10.7) \n \n \n \n \n Interest received on leases \n \n \n \n \n \n 0.4 \n \n \n - \n \n \n \n \n Finance lease receipts \n \n \n \n \n \n 0.2 \n \n \n - \n \n \n \n \n Deferred consideration payment \n \n \n 16 \n \n \n (7.0) \n \n \n (17.1) \n \n \n \n \n Net cash used in investing activities \n \n \n \n \n \n (19.3) \n \n \n (27.8) \n \n \n \n \n Financing activities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Interest and charges paid on borrowings \n \n \n \n \n \n (3.1) \n \n \n (1.9) \n \n \n \n \n Dividends paid \n \n \n 9 \n \n \n (23.1) \n \n \n (22.9) \n \n \n \n \n Interest paid on leases \n \n \n 16 \n \n \n (1.2) \n \n \n (1.1) \n \n \n \n \n Repayment of obligation under leases \n \n \n 16 \n \n \n (4.7) \n \n \n (5.6) \n \n \n \n \n Purchase of own shares \n \n \n 19 \n \n \n - \n \n \n (1.0) \n \n \n \n \n Drawdown of borrowings \n \n \n \n \n \n 15.0 \n \n \n 15.0 \n \n \n \n \n Net cash used in financing activities \n \n \n \n \n \n (17.1) \n \n \n (17.5) \n \n \n \n \n Net decrease in cash and cash equivalents \n \n \n \n \n \n (20.5) \n \n \n (25.3) \n \n \n \n \n Cash and cash equivalents at the beginning of the period \n \n \n 16 \n \n \n 40.4 \n \n \n 65.7 \n \n \n \n \n Cash and cash equivalents at the end of the period \n \n \n 16 \n \n \n 19.9 \n \n \n 40.4 \n \n \n \n \n   \n Consolidated balance sheet \n at 31 December 2023 (at 25 December 2022) \n   \n   \n \n \n \n \n \n \n \n   \n   \n notes \n \n \n   \n   \n 2023 \n £m \n \n \n   \n   \n 2022 \n £m \n \n \n \n \n Non-current assets \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Goodwill \n \n \n 12 \n \n \n 35.9 \n \n \n 35.9 \n \n \n \n \n Other intangible assets \n \n \n 12 \n \n \n 840.8 \n \n \n 832.9 \n \n \n \n \n Property, plant and equipment \n \n \n 13 \n \n \n 113.6 \n \n \n 140.1 \n \n \n \n \n Right-of-use assets \n \n \n 14 \n \n \n 13.0 \n \n \n 10.9 \n \n \n \n \n Finance lease receivable \n \n \n \n \n \n - \n \n \n 10.4 \n \n \n \n \n Investment in associates \n \n \n \n \n \n 14.5 \n \n \n 14.6 \n \n \n \n \n Retirement benefit assets \n \n \n 15 \n \n \n 66.0 \n \n \n 51.2 \n \n \n \n \n \n \n \n \n \n \n 1,083.8 \n \n \n 1,096.0 \n \n \n \n \n Current assets \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Inventories \n \n \n \n \n \n 11.4 \n \n \n 12.9 \n \n \n \n \n Trade and other receivables \n \n \n \n \n \n 85.1 \n \n \n 95.2 \n \n \n \n \n Current tax receivable \n \n \n \n \n \n 8.1 \n \n \n 13.9 \n \n \n \n \n Finance lease receivable \n \n \n \n \n \n - \n \n \n 0.6 \n \n \n \n \n Cash and cash equivalents \n \n \n 16 \n \n \n 19.9 \n \n \n 40.4 \n \n \n \n \n   \n \n \n \n \n \n 124.5 \n \n \n 163.0 \n \n \n \n \n Assets classified as held for sale \n \n \n 17 \n \n \n 11.0 \n \n \n - \n \n \n \n \n   \n \n \n \n \n \n 135.5 \n \n \n 163.0 \n \n \n \n \n Total assets \n \n \n \n \n \n 1,219.3 \n \n \n 1,259.0 \n \n \n \n \n Non-current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n (1.1) \n \n \n (4.5) \n \n \n \n \n Lease liabilities \n \n \n 16 \n \n \n (28.5) \n \n \n (26.8) \n \n \n \n \n Retirement benefit obligations \n \n \n 15 \n \n \n (168.8) \n \n \n (202.1) \n \n \n \n \n Provisions \n \n \n 18 \n \n \n (26.6) \n \n \n (36.6) \n \n \n \n \n Deferred tax liabilities \n \n \n \n \n \n (200.1) \n \n \n (191.6) \n \n \n \n \n \n \n \n \n \n \n (425.1) \n \n \n (461.6) \n \n \n \n \n Current liabilities \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n \n \n \n (96.2) \n \n \n (106.7) \n \n \n \n \n Deferred consideration \n \n \n 16 \n \n \n - \n \n \n (7.0) \n \n \n \n \n Borrowings \n \n \n 16 \n \n \n (30.0) \n \n \n (15.0) \n \n \n \n \n Lease liabilities \n \n \n 16 \n \n \n (4.7) \n \n \n (4.9) \n \n \n \n \n Provisions \n \n \n 18 \n \n \n (26.1) \n \n \n (26.3) \n \n \n \n \n \n \n \n \n \n \n (157.0) \n \n \n (159.9) \n \n \n \n \n Total liabilities \n \n \n \n \n \n (582.1) \n \n \n (621.5) \n \n \n \n \n Net assets \n \n \n \n \n \n 637.2 \n \n \n 637.5 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Equity \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Share capital \n \n \n 19 \n \n \n 32.2 \n \n \n 32.2 \n \n \n \n \n Share premium account \n \n \n 19 \n \n \n - \n \n \n 605.4 \n \n \n \n \n Merger reserve \n \n \n 19 \n \n \n 17.4 \n \n \n 17.4 \n \n \n \n \n Capital redemption reserve \n \n \n 19 \n \n \n 4.4 \n \n \n 4.4 \n \n \n \n \n Retained earnings/(accumulated loss) and other reserves \n \n \n 19 \n \n \n 583.2 \n \n \n (21.9) \n \n \n \n \n Total equity attributable to equity holders of the parent \n \n \n   \n \n \n 637.2 \n \n \n 637.5 \n \n \n \n \n   \n   \n   \n 1.            General information \n The financial information, which comprises the Consolidated income statement, the Consolidated statement of comprehensive income, the Consolidated cash flow statement, the Consolidated statement of changes in equity and the Consolidated balance sheet and related notes ('Consolidated Financial Information') in the Preliminary Audited Results announcement is derived from but does not represent the full statutory accounts of Reach plc. The statutory accounts for the 52 weeks ended 25 December 2022 have been filed with the Registrar of Companies and those for the 53 weeks ended 31 December 2023 will be filed following the Annual General Meeting on 2 May 2024. The auditors' reports on the statutory accounts for the 52 weeks ended 25 December 2022 and for the 53 weeks ended 31 December 2023 were unqualified, do not include reference to any matters to which the auditors drew attention by way of emphasis of matter without qualifying the reports and do not contain a statement under Section 498 (2) or (3) of the Companies Act 2006. \n Whilst the Consolidated Financial Information included in this Preliminary Audited Results Announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS), this announcement does not itself contain sufficient information to comply with IFRS. This Preliminary Audited Results Announcement constitutes a dissemination announcement in accordance with Section 6.3 of the Disclosure and Transparency Rules (DTR). The Annual Report for the 53 weeks ended 31 December 2023 will be available on the Company's website at www.reachplc.com and at the Company's registered office at One Canada Square, Canary Wharf, London E14 5AP before the end of March 2024 and will be sent to shareholders who have elected to receive a hard copy with the documents for the Annual General Meeting to be held on 2 May 2024. \n The Consolidated Financial Information has been prepared for the 53 weeks ended 31 December 2023 and the comparative period has been prepared for the 52 weeks ended 25 December 2022. Throughout this report, the Consolidated Financial Information for the 53 weeks ended 31 December 2023 is referred to and headed 2023 and for the 52 weeks ended 25 December 2022 is referred to and headed 2022. The presentational currency of the Group is Sterling. The Company presents the results on a statutory and adjusted basis and revenue trends on a statutory and like-for-like basis as described in note 2. \n 2.            Accounting policies \n Basis of preparation \n The Consolidated Financial Information has been prepared in accordance with UK-adopted international accounting standards ('IFRS') and the applicable legal requirements of the Companies Act 2006. These standards are subject to ongoing amendment by the International Accounting Standards Board and are therefore subject to change. As a result, the Consolidated Financial Information contained herein will need to be updated for any subsequent amendment to IFRS or any new standards that are issued. The Consolidated Financial Information has been prepared under the historical cost convention. \n The accounting policies used in the preparation of the Consolidated Financial Information for the 53 weeks ended 31 December 2023 and for the 52 weeks ended 25 December 2022 have been consistently applied to all the periods presented. These Consolidated Financial Statements have been prepared on a going concern basis. \n Going concern basis \n The directors have made appropriate enquiries and consider that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, which comprises the period of at least 12 months from the date of approval of the financial statements. \n In accordance with LR 9.8.6(3) of the Listing Rules, and in determining whether the Group's annual consolidated financial statements can be prepared on a going concern basis, the directors considered all factors likely to affect its future development, performance and its financial position, including cash flows, liquidity position and borrowing facilities, and the risks and uncertainties relating to its business activities. \n The key factors considered by the directors were as follows: \n   \n \n \n \n \n • \n \n \n The performance of the business in 2023 and the progress being made in the implementation of the Group's Customer Value Strategy and the implications of the current economic environment including inflationary pressures. The Group undertakes regular forecasts and projections of trading, identifying areas of focus for management to improve the delivery of the Customer Value Strategy and mitigate the impact of any deterioration in the economic outlook; \n \n \n \n \n • \n \n \n The impact of the competitive environment within which the Group's businesses operate; \n \n \n \n \n • \n \n \n The impact on our business of key suppliers (in particular newsprint) being unable to meet their obligations to the Group; \n \n \n \n \n • \n \n \n The impact on our business of key customers being unable to meet their obligations for services provided by the Group; \n \n \n \n \n • \n \n \n The deficit funding contributions to the defined benefit pension schemes and payments in respect of historical legal issues; and \n \n \n \n \n • \n \n \n The available cash reserves and committed finance facilities available to the Group. The Group has an expiry date for its £120.0m facility of 19 November 2026. The Group has drawn down £30.0m on the facility at the reporting date. \n \n \n \n \n   \n Having considered all the factors impacting the Group's businesses, including downside sensitivities (relating to trading and cash flow), the directors are satisfied that the Company and the Group will be able to operate within the terms and conditions of the Group's financing facilities for the foreseeable future. \n   \n The directors have reasonable expectations that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future, which comprises the period of at least 12 months from the date of approval of the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the Group's annual consolidated financial statements. \n   \n Changes in accounting policy \n The same accounting policies, presentation and methods of computation are followed in the Consolidated Financial Information as applied in the Group's latest annual consolidated financial statements for the 52 weeks ended 25 December 2022. \n In addition to the accounting policies disclosed in the Group's latest annual consolidated financial statements, the Group also opts to present cash flows relating to the use of its revolving credit facility net where the loans drawn down through use of the facility are repaid within three months of the initial draw down. \n Alternative performance measures \n The Company presents the results on a statutory and adjusted basis and revenue trends on a statutory and like-for-like basis. The Company believes that the adjusted basis and like-for-like trends will provide investors with useful supplemental information about the financial performance of the Group, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key performance indicators used by management in operating the Group and making decisions. Although management believes the adjusted basis is important in evaluating the Group, it is not intended to be considered in isolation or as a substitute for, or as superior to, financial information on a statutory basis. The alternative performance measures are not recognised measures under IFRS and do not have standardised meanings prescribed by IFRS and may be different to those used by other companies, limiting the usefulness for comparison purposes. Note 20 sets out the reconciliation between the statutory and adjusted results. An adjusted cash flow is presented in note 21 which reconciles the adjusted operating profit to the net change in cash and cash equivalents. Set out in note 22 is the reconciliation between the statutory and adjusted cash flow. Note 23 shows the reconciliation between the statutory and like-for-like revenue. \n Adjusting items \n Adjusting items relate to costs or income that derive from events or transactions that fall within the normal activities of the Group, but are excluded from the Group's adjusted profit measures, individually or, if of a similar type in aggregate, due to their size and/or nature in order to better reflect management's view of the performance of the Group. The adjusted profit measures are not recognised profit measures under IFRS and may not be directly comparable with adjusted profit measures used by other companies. All operating adjusting items are recognised within administrative expenses. Details of adjusting items are set out in note 20 with additional information in notes 5 and 15. \n Key sources of estimation uncertainty \n The key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below: \n Historical Legal Issues (note 18) \n The historical legal issues provision relates to the cost associated with dealing with and resolving civil claims in relation to historical phone hacking and unlawful information gathering. Previously there have been three parts to the provision: known claims, potential future claims and common court costs. The key uncertainties in relation to this matter relate to how each claim progresses, the amount of any settlement and the associated legal costs. Our assumptions have been based on historical trends, our experience and the expected evolution of claims and costs. \n In December 2023, a judgment was handed down in respect of test claims and as a result all claims issued after 31 October 2020 are now likely to be dismissed other than where individuals can demonstrate specific exceptional circumstances. This has significantly reduced the amounts that are expected to be paid out and has resulted in a change to the provision estimate and a net decrease of £20.2m (2022: £11.0m increase) in the year. At the period end, a provision of £18.2m remains outstanding and this represents the current best estimate of the amount required to resolve this historical matter. The majority of the provision is expected to be utilised within the next two years. \n Our view on the range of outcomes at the reporting date for the provision, applying more and less favourable outcomes to all aspects of the provision is £12m to £22m (2022: £32m to £56m). Despite making a best estimate, the timing of utilisation and ongoing legal matters related to provided for claims could mean that the final outcome is outside of the range of outcomes. \n Taxation (note 8) \n There is uncertainty as to the tax deductibility of expenditure relating to historical legal issues in the current year and additional tax liabilities that may fall due in relation to earlier years. At the reporting date, the maximum amount of the additional unprovided tax exposure relating to this uncertain tax item is £4.4m (2022: £8.1m). There is uncertainty as to the final outcome and timing of this item, with a possible range of outcomes for the potential tax exposure being nil to £27.8m (2022: nil to £27.2m). \n Retirement benefits (note 15) \n Actuarial assumptions adopted and external factors can significantly impact the surplus or deficit of defined benefit pension schemes. Valuations for funding and accounting purposes are based on assumptions about future economic and demographic variables. These result in risk of a volatile valuation deficit and the risk that the ultimate cost of paying benefits is higher than the current assessed liability value. Advice is sourced from independent and qualified actuaries in selecting suitable assumptions at each reporting date. \n   \n Impairment review (note 12) \n There is uncertainty in the value-in-use calculation. The most significant area of uncertainty relates to expected future cash flows for the cash-generating unit. Determining whether the carrying values of assets in a cash-generating unit are impaired requires an estimation of the value-in-use of the cash-generating unit to which these have been allocated. The value-in-use calculation requires the Group to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate present value. Projections are based on both internal and external market information and reflect past experience. The discount rate reflects the weighted average cost of capital of the Group. \n Restructuring and property provisions (note 18) \n Provisions are measured at the best estimate of the expenditure required to settle the obligation based on the assessment of the related facts and circumstances at each reporting date. There is uncertainty in relation to the size and length of property related provisions. \n Critical judgements in applying the Group's accounting policies \n In the process of applying the Group's accounting policies, described above, management has made the following judgements that have the most significant effect on the amounts recognised in the financial statements: \n Indefinite life assumption in respect of publishing rights and titles (note 12) \n There is judgement required in continuing to adopt an indefinite life assumption in respect of publishing rights and titles. The directors consider publishing rights and titles (with a carrying amount of £818.7m) have indefinite economic lives due to the longevity of the brands and the ability to evolve them in an ever-changing media landscape. The brands are central to the delivery of the Customer Value Strategy which is delivering digital revenue growth. At each reporting date management review the suitability of this assumption. \n Identification of cash-generating units (note 12) \n There is judgement required in determining the cash-generating unit relating to our Publishing brands. At each reporting date management review the interdependency of revenues across our portfolio of Publishing brands to determine the appropriate cash-generating unit. The Group operates its Publishing brands such that a majority of the revenues are interdependent and revenue would be materially lower if brands operated in isolation. As such, management do not consider that an impairment review at an individual brand level is appropriate or practical. As the Group continues to centralise revenue generating functions and has moved to a matrix operating structure over the past few years, all of the individual brands in Publishing have increased revenue interdependency and are assessed for impairment as a single Publishing cash-generating unit. \n Historical Legal Issues (note 18) \n Following the judgment handed down on 15 December 2023, all claims issued after 31 October 2020 are now likely to be considered time barred and subsequently dismissed, other than where individuals can demonstrate there were exceptional circumstances why they could not have been aware of their putative claims. This has significantly reduced the amounts that are expected to be paid out and has resulted in a change to the provision estimate and a net decrease of £20.2m. Subsequently, the test claimants' application for permission to appeal was refused by the trial judge on 9 February 2024, with claimants having a further short period to apply for permission to appeal to the Court of Appeal. The prospects of permission being granted and a successful appeal ensuing are deemed remote and as such no contingent liability has been disclosed in the accounts. \n 3.            Segments \n The performance of the Group is presented as a single reporting segment as this is the basis of internal reports regularly reviewed by the Board and chief operating decision maker (executive directors) to allocate resources and to assess performance. The Group's operations are primarily located in the UK and the Group is not subject to significant seasonality during the year. \n   \n 4.            Revenue \n \n \n \n \n   \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Print \n \n \n 438.8 \n \n \n 448.6 \n \n \n \n \n    Circulation \n \n \n 312.5 \n \n \n 307.7 \n \n \n \n \n    Advertising \n \n \n 76.6 \n \n \n 86.9 \n \n \n \n \n    Printing \n \n \n 20.2 \n \n \n 23.1 \n \n \n \n \n    Other \n \n \n 29.5 \n \n \n 30.9 \n \n \n \n \n Digital \n \n \n 127.4 \n \n \n 149.8 \n \n \n \n \n Other \n \n \n 2.4 \n \n \n 3.0 \n \n \n \n \n Total revenue \n \n \n 568.6 \n \n \n 601.4 \n \n \n \n \n   \n The Group's operations are located primarily in the UK. \n   \n 5.            Operating adjusted items \n \n \n \n \n   \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Provision for historical legal issues (note 18) \n \n \n 20.2 \n \n \n (11.0) \n \n \n \n \n Restructuring charges in respect of cost reduction measures (note 18) \n \n \n (26.9) \n \n \n (15.5) \n \n \n \n \n (Impairment of sublease)/sublet of closed print site (note 14 and 18) \n \n \n (19.4) \n \n \n 16.6 \n \n \n \n \n Other property-related costs (note 20) \n \n \n (8.0) \n \n \n (4.6) \n \n \n \n \n Pension administrative expenses and past service costs (note 15) \n \n \n (5.5) \n \n \n (14.8) \n \n \n \n \n Other items (note 20) \n \n \n (9.3) \n \n \n (4.1) \n \n \n \n \n Operating adjusted items included in administrative expenses \n \n \n (48.9) \n \n \n (33.4) \n \n \n \n \n Operating adjusted items included in share of results of associates \n \n \n (1.5) \n \n \n (1.4) \n \n \n \n \n Total operating adjusted items \n \n \n (50.4) \n \n \n (34.8) \n \n \n \n \n   \n Operating adjusted items relate to costs or income that derive from events or transactions that fall within the normal activities of the Group, but are excluded from the Group's adjusted profit measures, individually or, if of a similar type in aggregate, due to their size and/or nature in order to better reflect management's view of the performance of the Group. The adjusted profit measures are not recognised profit measures under IFRS and may not be directly comparable with adjusted profit measures used by other companies. Set out in note 20 is the reconciliation between the statutory and adjusted results which includes descriptions of the items included in adjusted items. \n The Group has recorded a £20.2m decrease (2022: £11.0m increase) in the provision for historical legal issues relating to the cost associated with dealing with and resolving civil claims in relation to historical phone hacking and unlawful information gathering (note 18). This material reduction is driven by the judgment handed down during December 2023 in respect of test claims. As a result of the ruling, all claims issued after 31 October 2020 are now likely to be dismissed other than where individuals can demonstrate specific exceptional circumstances, and therefore this has significantly reduced the amounts that are expected to be paid out. \n Restructuring charges of £26.9m (2022: £15.5m) principally relate to cost management actions taken in the period. \n Following the sublet of the vacant print site during 2022 which resulted in the reversal of an impairment in right-of-use assets of £11.0m and previously onerous costs of the vacant site of £5.6m, the sub-lessee entered into administration during 2023. As a result, the corresponding £10.8m finance lease receivable has been impaired along with the subsequent recognition of onerous costs of £8.6m of the vacant site during the period. \n Other property-related costs comprise the impairment of vacant freehold property costs (£4.3m), vacant freehold property-related costs (£1.4m) and onerous lease and related costs (£2.6m) less the profit on sale of assets (£0.3m). In 2022, other property-related costs related to the impairment of vacant freehold property (£4.2m) and plant and equipment (£0.8m) less the profit on sale of impaired assets (£0.4m). \n Pension costs of £5.5m (2022: £14.8m) comprise pension administrative expenses (2022: £4.2m). 2022 also included £10.6m of past service costs relating to a Barber Window equalisation adjustment. \n Other adjusted items comprise the Group's legal fees in respect of historical legal issues (£5.3m), adviser costs in relation to the triennial funding valuations (£2.5m), internal pension administrative expenses (£0.6m), corporate simplification costs (£0.5m), and other restructuring-related project costs (£0.7m) less a reduction in National Insurance costs relating to share awards (£0.3m). In 2022, other adjusted items comprise the Group's legal fees in respect of historical legal issues (£5.2m), adviser costs in relation to the triennial funding valuations (£1.6m), less a reduction in National Insurance costs relating to share awards (£2.7m). \n   \n 6.            Interest income \n   \n \n \n \n \n   \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Interest income on bank deposits \n \n \n 0.6 \n \n \n 0.1 \n \n \n \n \n Interest on finance lease receivable \n \n \n 0.4 \n \n \n - \n \n \n \n \n Interest income \n \n \n 1.0 \n \n \n 0.1 \n \n \n \n \n   \n   \n 7.            Finance costs \n \n \n \n \n   \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Interest and charges on borrowings \n \n \n (3.3) \n \n \n (1.8) \n \n \n \n \n Interest on lease liabilities \n \n \n (1.2) \n \n \n (1.1) \n \n \n \n \n Finance costs \n \n \n (4.5) \n \n \n (2.9) \n \n \n \n \n   \n   \n 8.            Tax charge \n   \n \n \n \n \n   \n   \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Corporation tax charge for the period \n \n \n (5.5) \n \n \n (4.5) \n \n \n \n \n Prior period adjustment \n \n \n (1.1) \n \n \n (0.7) \n \n \n \n \n Current tax charge \n \n \n (6.6) \n \n \n (5.2) \n \n \n \n \n Deferred tax charge for the period \n \n \n (8.1) \n \n \n (9.0) \n \n \n \n \n Prior period adjustment \n \n \n (1.0) \n \n \n 0.3 \n \n \n \n \n Deferred tax rate change \n \n \n 0.5 \n \n \n - \n \n \n \n \n Deferred tax charge \n \n \n (8.6) \n \n \n (8.7) \n \n \n \n \n Tax charge \n \n \n (15.2) \n \n \n (13.9) \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Reconciliation of tax charge \n \n \n 2023 \n £m \n \n \n 2022 \n £m \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Profit before tax \n \n \n 36.7 \n \n \n 66.2 \n \n \n \n \n Standard rate of corporation tax of 23.5% (2022: 19.0%) \n \n \n (8.6) \n \n \n (12.6) \n \n \n \n \n Variance in overseas tax rates \n \n \n 0.9 \n \n \n - \n \n \n \n \n Impact of change in tax rates \n \n \n 0.5 \n \n \n - \n \n \n \n \n Tax effect of permanent items that are not included in determining taxable profit \n \n \n (5.8) \n \n \n (1.2) \n \n \n \n \n Deferred tax not recognised \n \n \n (0.4) \n \n \n -- \n \n \n \n \n Prior period adjustment \n \n \n (2.1) \n \n \n (0.4) \n \n \n \n \n Tax effect of share of results of associates \n \n \n 0.3 \n \n \n 0.3 \n \n \n \n \n Tax charge \n \n \n (15.2) \n \n \n (13.9) \n \n \n \n \n The standard rate of corporation tax for the period is 23.5% (2022: 19.0%). The tax effect of items that are not deductible in determining taxable profit includes certain costs where there is uncertainty as to their deductibility. The current tax receivable of £8.1m (2022: £13.9m) is net of the uncertain tax provision of £23.4m (2022: £19.1m). At the reporting date, the maximum amount of the additional unprovided tax exposure relating to an uncertain tax item is £4.4m (2022: £8.1m). There is uncertainty as to the final outcome and timing of this item, with a possible range of outcomes for the potential tax exposure being nil to £27.8m (2022: nil to £27.2m). \n   \n The tax on actuarial losses (2022: losses) on defined benefit pension schemes taken to the consolidated statement of comprehensive income is a deferred tax credit of £0.1m (2022: credit of £7.4m). \n   \n The amount taken to the consolidated income statement as a result of pension contributions was £11.4m (2022: £7.1m). \n 9.            Dividends \n \n \n \n \n   \n \n \n 2023 \n Pence \n per share \n \n \n 2022 \n Pence \n per share \n \n \n \n \n Amounts recognised as distributions to equity holders in the period \n \n \n   \n \n \n \n \n \n \n \n Dividends paid per share - prior year final dividend \n \n \n 4.46 \n \n \n 4.46 \n \n \n \n \n Dividends paid per share - interim dividend \n \n \n 2.88 \n \n \n 2.88 \n \n \n \n \n Total dividends paid per share \n \n \n 7.34 \n \n \n 7.34 \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Dividend proposed per share but not paid nor included in the accounting records \n \n \n 4.46 \n \n \n 4.46 \n \n \n \n \n   \n The Board proposes a final dividend for 2023 of 4.46 pence per share. An interim dividend for 2023 of 2.88 pence per share was paid on 22 September 2023 bringing the total dividend in respect of 2023 to 7.34 pence per share. The 20...

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