Shares in UK media conglomerate Reach Plc (LON: RCH) have plummeted to a 2012 low, hitting a low of 74.5p in morning trading. This comes after the company released its half-year financial results, which showed a significant decline in profits. The group reported a pre-tax profit of £54.1m, down from £83.5m in the same period last year. This represents a decline of 35%.
The company also announced that it would be reducing its dividend payout by 50% to 2.4p per share. This move is likely to be seen as a response to the deteriorating financial performance of the group. Reach Plc's shares have been under pressure in recent months due to concerns over the impact of the cost-of-living crisis on the company's advertising revenue.
The FTSE 100-listed company has been hit hard by the decline in advertising revenue, with many of its key titles, including the Daily Mail and Mirror, feeling the pinch. The company's revenue declined by 10% in the first half, to £734.6m, with a significant portion of this decline attributed to a reduction in advertising revenue.
The Bank of England has been keeping a close eye on the UK economy, with interest rates remaining unchanged at 5.25% since May. However, the central bank has hinted that it may not be done raising rates just yet, with a further increase possible in the coming months. This could have implications for UK households and businesses, particularly those with variable-rate mortgages or loans.
For UK savers and investors, the reduced dividend payout will be a concern. The move is likely to impact their returns on investment, particularly those who rely on dividend income as a key component of their portfolios. It is worth noting that Reach Plc's shares have been under pressure in recent months, and this decline may be an opportunity for some investors to buy in at a lower price.
However, it is essential for investors to seek advice from a qualified financial adviser before making any investment decisions. The current economic environment is volatile, and it is crucial to have a well-diversified portfolio to mitigate risks.