(Reuters) - Reach Plc (RCH.L), publisher of Britain’s Daily Mirror newspaper, reported a rise in digital revenue on Friday and said it had quit plans to bid on assets of JPI Media, publisher of the i newspaper, The Scotsman and other titles.
Reach reported a 14% jump in digital revenue, helped by readers and advertisers moving online and setting its shares on track for their best day in nearly a year. The stock was up almost 12% at 93.4 pence at 1029 GMT.
Reach said it was confident of meeting its full-year expectations as it reported a 4.4% fall in like-for-like revenue for the five months ended Nov. 24, smaller than a 6.6% decline a year earlier.
Its decision on JPI leaves Newsquest Media Group, publisher of The Glasgow Herald, as the front-runner to buy JPI assets.
Reach said it would focus on expanding its network of digital regional brands into new territories, with at least seven ‘Live’ launches planned for 2020 and about 50 journalists to be recruited.
“We suspect the reason behind the end of discussions with JPI was valuation ...this announcement indicates good discipline around capital allocation,” Citi analysts said, noting that Reach had done a good job of scaling its business in recent years.
It acquired the Express and Star newspapers last year, adding to a stable of more than 100 national and regional titles.
“The challenge for Reach is to transition itself away from being a “newspaper company” and with Digital now comfortably delivering double-digit growth, we think it can manage this transition over time,” the Citi analysts said.
Reporting by Tanishaa Nadkar in Bengaluru; editing by Subhranshu Sahu and Jason Neely