Daily Mirror owner boosts hacking provision as ad sales come under pressure
The group said it has made ‘good progress’ on settling civil claims arising from phone-hacking.
The publisher of the Daily Mirror newspaper has warned of another fall in advertising revenue and increased provisions relating to the phone-hacking scandal.
Reach, formerly known as Trinity Mirror, boosted its provision for settling claims linked to the phone-hacking scandal by £7.5 million.
The group said it has made “good progress” on settling civil claims arising from phone-hacking, with damages for the majority of claims now settled.
However, it added: “The costs associated with settling these claims, predominantly the legal fees of the claimants’ lawyers, are expected to be higher than previously estimated.
“Therefore, we have increased the provision for settling these historical claims by £7.5 million.”
In a trading update for the 26 weeks to July 1, Reach said total group revenue is expected to grow by 11%, reflecting the acquisition of Northern & Shell, the company behind the Daily Express and Daily Star.
However, like-for-like revenue over the period excluding the Express & Star is set to fall by 8%.
Publishing revenue is tipped to be down 8%, with print falling by 10% and digital increasing by 1%. Classified advertising is expected to fall by 19%.
Boss Simon Fox said: “We have seen some improvement in May and June, driven by stronger national print advertising.
“Following the welcome clearance by the Secretary of State, we will start the process of integrating Express & Star in order to accelerate the benefits that our combined scale will deliver.”
Earlier this month, the Express takeover was cleared by the Government after Culture Secretary Matt Hancock said he will not be referring the £126.7 million deal for a full investigation.
The move paved the way for the deal to buy a string of titles from Richard Desmond’s media empire.
Reach warned there will be job losses under aims to slash annual costs by £20 million within two years, although it is unclear how many at this stage.