June 29, 2018 / 6:32 AM / in 4 months

Daily Mirror group expects revenue boost from Express & Star deal

(Reuters) - Reach plc (RCH.L), which publishes the Daily Mirror, said on Friday it expected revenue to rise 11 percent for the 26 weeks to July 1, boosted by its acquisition of rival tabloids the Daily Express and Daily Star.

FILE PHOTO - The two newspaper titles owned by Express Newspapers alongside The Mirror newspaper, which is owned by Trinity Mirror, are seen on display in a newsagents in central London, Britain, February 9, 2018. REUTERS/Simon Dawson

Trinity Mirror, now called Reach, announced the 127 million pound ($166.45 million) takeover in February, bringing together tabloids from opposite ends of the political spectrum in a group it said would be in a stronger position to cope with advertisers and readers moving online.

But on a like-for-like basis, the company said revenue, excluding Express & Star, was expected to fall 8 percent over the same period. Print revenue is expected to fall 10 percent, with publishing forecast to be down 8 percent and digital to be up by about one percent.

If Reach had owned Express & Star from the beginning of 2017, revenue on a like-for-like basis would have been expected to fall by 7 percent, Reach said, adding that, print would have declined 9 percent and digital increased by 5 percent.

The deal adds the daily and Sunday editions of the Express and Star tabloids to Reach’s stable of more than 260 national and regional titles including the Daily Record, the Manchester Evening News, the Liverpool Echo and Birmingham Mail.

Reach is buying the tabloids, and magazines OK!, New! and Star from billionaire Richard Desmond’s Northern & Shell. The company is still waiting for regulatory authorities in Ireland to rule on the deal.

Reach also forecast that its performance for the year to be in line with market expectations. Benefits from the Express & Star acquisition are expected to offset the impact of higher than anticipated newsprint prices in the second half of the year, Reach said.

Simon Fox, Chief Executive, said: “We have seen some improvement in May and June driven by stronger national print advertising.”

The company also raised its provision for settling civil claims related to a phone hacking case to 7.5 million pounds.

Reporting by Arathy S Nair in Bengaluru; editing by Jason Neely and Jane Merriman

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