Reach plc (RCH) Earnings Call Transcript

Good morning, everyone. Thank you for joining us today, either online or in person. My name is Piers North. I'm Chief Executive of Reach plc, and welcome to our half year results for 2026. I would assume you are familiar with our usual disclaimers, but they are here, if not. So this morning, I'm going to run through our performance highlights for the first half of the year. And then as usual, I will pass to Darren Fisher, our CFO, for the financial details. Then I will come back and I'll take a closer look at our current strategic progress and explain more how we're viewing the current online market and how we see the opportunity moving forward. So let's take a snapshot of the year. To put it mildly, this period has been continued to be characterized by significant external change. The media and obviously, publishing in particular, the landscape is evolving rapidly, and we face notable shifts in how our digital content is discovered, most notably the lower referral volumes, which saw our on-platform page views decline by 40%. However, against that backdrop, I am reassured by the resilience we've shown, including being on track to deliver on our expectations for the year. We've been able to partially mitigate this stark browser page view decline as well as grow our priority areas, which means that our digital revenue declined 11%. Again, when on-platform page views, which has traditionally been our single biggest driver of our revenue, declined by a much higher number. The priorities that we set out to navigate the market, connecting with our audiences, accelerating the use of technology and AI and diversifying our revenues have driven positive tangible results. Excluding our local business, direct revenues grew 6%, supported by the quality of our video content and the successful rollout of our subscription model. On that model, we've rolled out subscriptions across 15 of our sites, and we're well over 40,000 subscribers to date. We're firmly on track to meet our year-end target of 75,000. We've also made great strides in the technology space that makes this progress possible. Our new AI-powered launchpad platform is now in the hands of our editorial teams, streamlining content creation. And we've seen promising developments with new AI licensing revenues, not only in terms of progress with the big tech firms, but now also in smaller scalable payment models. Operationally, we've continued to take decisive action. Our print closures, which we announced in the early part of the year, are tracking ahead of plan. Our ongoing focus on cost and cash discipline has ensured that we've delivered an adjusted operating profit of GBP 43 million. In short, whilst we've had to navigate the significant external change, the core of our business remains strong. We are building a more focused brand-led business, and I'm proud of the momentum that we've maintained against such a significant shift in the referral market. I'll now hand you over to Darren, who will take you through our financials.

Thank you, Piers, and good morning, everyone. Thank you also for taking the time to join us today. As we did last time, we have quite a lot to talk about again this morning. So far this year, we've seen a continuation of the disruption that we first reported in July last year, in particular with how content is discovered and as I've been consistently saying, an unhelpful macroeconomic environment. This has made these 6 months particularly challenging, but I take comfort from two things. Firstly, it has reinforced our three priorities of the right course of action for our business, which we've made good progress on, as Piers will cover later. Secondly, despite these market conditions, we're investing where we need to support our plans while continuing our disciplined and strategic focus on costs. Consolidation of our print operations has progressed successfully ahead of schedule and with the savings currently tracking ahead of plan. These actions will help underpin the savings necessary in the second half of the year. Finally, it is important to note that we are now in the penultimate year of our pension payments. The payments stepping down materially in 2028. As for our financial highlights for the first half of the year, we have delivered a strong profit performance of GBP 43 million, and we continued on our track record of strong cash conversion of 113%. We continue our disciplined and strategic cost management. Reflecting the trading environment, we have reduced operating costs by 10%, well ahead of the 5% to 6% target. This underpinned the 1 percentage point increase in our adjusted operating margin to 18.5%. Cash generation remains robust with adjusted operating cash flow of GBP 49 million. As we enter the final phase of the bridging period, we have taken the decision to rebase the interim dividend to GBP 0.014 per share, rebalancing capital towards our organic investments. I'll cover this in more detail a bit later. In terms of summary financial results, revenues declined 9% or GBP 23 million to GBP 233 million. Within revenue, our digital revenues declined 11% to GBP 54 million despite a 40% decline in page views. Our print revenues, which represent about 3/4 of our total revenue, declined 8% to GBP 178 million. Operating profit decreased by 4% or GBP 2 million to GBP 43 million, and we ended the period with a GBP 48 million net debt balance. And now turning to digital in more detail. We categorized digital revenue in two component parts, direct and indirect. These direct revenues declined by GBP 1 million or 4%, partly affected by our decision to drive margin improvements across our local advertising business by focusing on higher-quality revenue. Excluding these local revenues, direct revenues grew 6% as we saw the benefit of our video expertise in attracting more agency work as we were able to deliver more complex briefs. Within direct revenues are our diversified products, which include premium subscriptions, affiliates, e-commerce and partnerships, these grew 2.5%. Our subscriptions rollout is on plan with 15 brands now live. Piers will talk more about this, but we continue to develop and drive this new revenue stream. Our on-platform page views currently remain our key monetization engine. Across the first half of the year, on-platform page views declined 40%, continuing the trend we saw across the second half of 2025, mainly due to lower referrals from Google. This adversely impacted our volume-sensitive programmatic business and meant that overall indirect revenues declined 16%. The disruption in how content is discovered reinforces the importance of investment and progress against our three priorities so that we can grow more of our revenue, which is not dependent on referral traffic. Despite the on-platform impact, content viewed off-platform that is across social media platforms such as YouTube and Facebook is of increased importance. And monetization of these audiences has improved through our focus in this area with the platforms increasingly rewarding engaging content. Now turning to print revenue. Print revenue comprises circulation, print advertising and other print. In circulation, which is the majority of print revenue, we continue to optimize revenue by carefully managing cover price increases to offset declines in circulation volumes. In this half, circulation revenue decline was higher than historic averages with Q2 at minus 7.8%. This is because of higher volume declines, in particular, Q2, where we have seen the decline elevated at 23%, this is against our normal decline rates of between 17% and 20%. Our view of this is a combination of the latest cover price increase with the continued cost of living pressures for our readers. We'll continue to carefully review future increases to optimize this revenue stream over the medium term. Print advertising revenue declined 11%, but continue to outperform volume trends, supported by food retail, including incremental spend around the World Cup. Government spending also continued to be an important print advertiser. This demonstrates the continuing relevance of this format to our advertisers. Printing and other print decreased as expected as the prior year was supported by a number of one-off sporting revenues such as football souvenir editions. I will now cover operating costs. We have a strong track record of disciplined cost management, which we continue to actively manage. Our adjusted operating costs reduced by 10%, ahead of my original guidance, responding to the challenging market conditions. Taking a closer look, employee costs, our largest cost category, declined 10% despite the inflationary pressures from the company-wide pay rise and strategic hires to deliver our priorities. The majority of the savings were driven by the restructure undertaken in the second half of 2025, rigorous control of vacancies, along with the contribution from the closure of our Scottish print plant during April this year. The 17% reduction in newsprint costs is due to print -- reducing print volumes. It is worth noting that newsprint procurement remains Reach's responsibility and retaining control over the negotiation of price and volumes of this critical supply. Production and sales costs declined by 5% or GBP 2 million, the majority of the savings coming from direct cost of sales. Other savings of GBP 5 million were across all categories as we continue to focus on overhead management. In February, we took the decision to consolidate our print operations and close two of our printing facilities. This has progressed successfully ahead of schedule and with the savings currently tracking ahead of plan. The Scottish site transition has gone well. Here, we have moved much of our Saltire printing to our retained facility in Oldham, near Manchester, with the remaining printing requirements served by long-term outsourcing agreements. It is important to note that there has been no operational disruption during this transition and the early close of Saltire has driven savings ahead of plan. We have decommissioned the site and over the next 12 months, we expect it to be disposed of. Our Southern site transfer is also on track. We have completed the transfer of our Southern titles to the new printer site in Broxbourne with the final transition completed just this week. As stated at our full results -- full year results, the closure of the two print sites will create a one-off cash cost of change of around GBP 25 million, primarily relating to severance, of which the majority is payable across the second half of the year. As a reminder, the Saltire and Watford Print sites will be marketed for sale during 2026, and we are targeting to complete disposal of both sites during 2027. Decommissioning and valuation work is ongoing. Now over to cash. Our balance sheet remains strong. We generated GBP 57 million of adjusted cash from operations. Our largest cash commitment is the agreed funding arrangements with our pension schemes. Pension payments totaled GBP 28 million in half 1, which includes GBP 1 million returned from escrow following the Trinity Retirement Benefit Scheme buy-in. We paid GBP 14 million of dividends as we did in the same period the previous year. Restructuring outflows of GBP 8 million in the main relate to people changes and the significant prior year restructure we undertook along with the Saltire site closures. Capital expenditure of GBP 6 million is in line with our expected spend for maintenance and investment projects. We are waiting for the final settlement cost bills relating to historic legal issues. And as a result, we made a payment of just GBP 1 million in the first half of the year. Net debt ended at GBP 48 million. As a reminder, we have in place a GBP 145 million revolving credit facility committed to the end of 2028. Now just a reminder of our capital allocation priorities. We have made -- we have material print profits, sustainable cash generation and a strong balance sheet, which remains key as we continue to reduce our financial obligations. Nonetheless, we recognize that the current market conditions remain challenging, requiring increased cost of change as we manage through the bridging period. Whilst we recognize the importance of returns to shareholders, we have taken the decision to reduce the interim dividend to GBP 0.014. This creates greater flexibility, balancing capital towards our organic investments. Piers will talk a bit more about those later. It is important we make these investments to deliver our priorities, including our brand development, subscriptions and new tech platforms. This is expected to drive more value to our investors over the medium term. We continue to adopt a prudent approach to managing our leverage, which is currently 0.4x EBITDA and which we target to maintain below 1x. Stepping through our -- this is the outlook. So stepping through our business from the top, we retain our cautious outlook for the remainder of the year for both our digital and print businesses. I expect to deliver around 10% of operational cost savings in the second half. This is partially underpinned by the announced changes to the printing operations. Importantly, that means we are on track to deliver profit in line with market expectations for the year despite the revenue headwinds. In terms of cash, there is no change to estimates relating to the closure of the two print sites. These are expected to create a one-off cash cost of change of around GBP 25 million, mainly relating to severance payable this year. Pension contributions are expected to be GBP 57 million. You can assume that capital expenditure will be similar to 2025. Our provision estimate to settle historic legal issues is unchanged. We expect to pay the remaining GBP 4 million over the next 12 months. No meaningful disposal proceeds are expected in 2026. The Saltire and Watford Print sites will be marketed for sale this year, and we are targeting to complete the sale of these sites in 2027. We view the next 18 months of pension contributions as a bridging period with the end being clearly in sight. This period will require our continued financial discipline and focus as I expect the high levels of circulation volume decline to continue and that our margins during the bridging period will not exceed 20%. I do remain confident that we have the resources and the expertise to ensure we can navigate across the bridging period to be well positioned for 2028. I'll pass back to Piers to provide more color on our strategic focus. Thank you for your time.

Thank you, Darren. So we've given you the headlines. now I want to go back over some of the progress that we've made over the past 6 months and also to give you some more color and context, as Darren says, around those shifts we're seeing in the market. Before I do so, just a quick reminder, I've already referenced these, and I will do so again. These are our three priorities that I shared with you all this time last year. They are the connecting with our audiences, accelerating the use of tech and AI and more importantly than ever, diversifying our revenues. These have been our guide over the past 12 months. And despite the scale of the change, these priorities have not changed. And the reason because they were created with these shifts in mind, this strategy built in the dominance of the tech platforms, the changing audience behaviors and of course, AI. So let's talk a little bit more about the digital in the first half of the year. I want to lay out the environment we're operating, starting with some of those changes that we talked about. We have seen a material change in how content is discovered online. And as Darren said, this is down to significant decline in referral volumes, particularly and primarily from Google. It is worth noting, however, that over the last 100 days, we have seen a stabilization in on-platform audiences, though we have to work to the assumption that these referrals are unlikely to recover. But the real story isn't just about the traffic decline. It's about our response to it and how our strengths and our brands stood up to this despite the change. To state the obvious, the landscape illustrates exactly why the strategic decision to move further away from a reliance on referral traffic is the right one. It's why we place so much focus on original content, paid subscriptions, quality video, social engagement, off-platform distribution and a range of moves in the AI licensing space. In short, our focus areas are making sure we have more control on how our content is consumed and used by other parties. In other words, we're creating -- we're actively creating a more sustainable digital business model, and that is beginning to pay off. For example, whilst lower yielding off-platform revenues have grown over 90%. We're getting going with emerging licensing deals and some of the regulation around how the tech platforms engage with other businesses in the U.K. is moving us in the right direction. So let's take a quick look at the three priorities in brief, starting with connecting with audiences. I've given you the context. And looking at this slide reminds me that amongst all this change, it's worth remembering what our strengths are and remain. The start is despite all this change, we still reach 2/3 of the U.K. online population. This is an immense footprint and unmatched by our commercial competitors. And even in this new world, scale is still enormously helpful when it comes to weathering the storms, reaching new consumers for our subscriptions and attracting commercial partners. I've talked before about reaching people where they live. And whilst the geographic reach will always be a point of pride for us, we also take this to mean reaching people where they spend their time, for example, the platforms. This is where our off-platform and our video focus really comes in, which is now -- which are both now an increasingly important source of revenue. And to put it in perspective, despite all these changes, we have so many indicators which demonstrate that our content and our services remain highly relevant and valuable to humans and machines alike. 35 million adults in the U.K. still engage with our content every month. Every second, we are still delivering 200 page views on browsers. Since this time last year, social video views are up 55%. Social followers are up 15%. And now, of course, AI bots are scraping our content many millions of times a day. So we've seen a clear fundamental shift in how people and machines access our content through our strategy, we'll be able to take advantage of these opportunities as they come. What's more, our value is increasingly tied to the real-time on-the-ground content and journalism that our teams provide all around the U.K., Ireland and now the U.S., obviously, too. And this is what the AI machines cannot replicate because even the best large language model doesn't know what happened at the end of your road just recently. So how will we make this relationship with our audience even stronger over time? A key push will be strengthening our network of brands, driving digital subscriptions with more marketing investment than we've had in recent years. Of course, this slide highlights some of our much well-loved brands and well-known brands such as the Manchester Evening News, the Echo, the Mirror, but also some of our more recently launched ones, including our All-Out Football Network of club podcasts, which sees a combined 1.4 million monthly views and listens. And whilst it complements our digital subscription diversification, it is also worth pointing out, we're looking at trialing new subscription-based community brands, often around our smaller legacy print brands, which so far have had no online home or business model. So for example, we're starting next month with the Southport Visiter, Ayrshire Post in the Journal in the Northeast of England. Moving on to tech and AI. Most visibly, our tech has obviously provided the infrastructure necessary for our subscription rollout. The team integrated Ad-lite digital subscription across 15 months -- 15 sites in only a few months, which has allowed us to monetize those existing online products. Looking ahead to the rest of the year, I'm excited about LaunchPad, a new publishing platform, bringing in all the in-house AI-powered tools you've heard us talk about over the last 12 months, Mantis/Guten, Content Score and the like. This means that the content creator or a journalist on the move, you can use AI to give you headline options, use data for ideation, content originality and value, grab an image from our archive, edit, upload video, all distributed from your mobile. And LaunchPad will be key not only to our existing brands, but also those community brands that I talked about, but also in future possible for independent creators. Last but not least, a nascent area, but I'm increasingly optimistic about the future revenue opportunity in licensing. Within AI licensing, you are seeing a funnel with different profiles of revenues. At the top of that funnel, we continue to engage the large platforms. I've talked before about courtship and courts. And I mentioned our deal with Amazon in March, and that's now providing ongoing revenues. And we're close to agreeing terms with some of the largest businesses in this space over the course of H2. In the middle of that funnel, we have a whole potential category of what is essentially a B2B outside of the more obvious tech giants. For example, we're working with the financial services business, our content providing contextual information that helps serve their data and their clients. And then for the long tail, we are working with the likes of Amazon Web Services and other players such as Tollbit, where we're putting in place effective real-time content marketplaces. These will enable us to get paid small amounts of high volume every time content get used by an AI bot. The industry obviously has referred to this practice as scraping, but if policy, regulation, the tech and the markets can catch up to these developments, it will mean a much fairer and clearer value exchange for content businesses like us in an AI world, akin to the real-time bidding that we've had in advertising for decades. We know our content has tremendous value. The numbers validate that to our audiences and to other businesses, including AI firms, and we're just at the start of monetizing this. Moving on to diversifying revenues. Clearly important given the environment we're in. This strand has moved on considerably in recent months, obviously driven, as I said, by subscriptions. It represents just under 15% of our revenues and remains -- our digital revenues remains a big opportunity for us. A lot has happened over the last sort of 6 months, and I'm very ambitious about where this could go next. During this time, we've moved fast. We've successfully rolled out paid subscription across 15 of our brands, giving our subscribers premium content, ad-lite experiences, offers and more. We've already secured well over 40,000 subscribers, and we're well on track for our 75 target we set for the full year. We've seen success across our network, across the more well-known brands, but also in the likes pleasingly of Wales Online and Stoke Sentinel. Over the next half of the year, we still have a few more brands to launch, which will keep driving that momentum, but the real work now will be around finessing our proposition. As I said earlier, proactively marketing our brands and our content in ways that we haven't done before. And through this work, it's been fascinating to see what the users value in each of our brands and what content drives conversion. Now there is sometimes a tension in our subscription focus, which means there will be trade-off that maybe impacts page views, but we're fully committed to serving the core of our paying customers who value our content and it's exciting to see where this goes next. To add some more color, I did just want to zoom in on video for a minute. This has been always part of our connecting with audiences strand, but it really brings together all of our three priorities with tech and revenue diversification, too. So it's a really good example of how we're doing all of the strategy with this one initiative. Overall, I'm pleased with the success we've seen so far from doing more quality video, which we know packs real commercial value. We do a huge amount in everyday journalism, but also in the high-end production, which we call Studio, often longer-form content and often featuring external talent and guests. Our performance here demonstrates exactly how this translated into commercial success with Studio revenues up 70%. Our work with partners like Nestle on their Made in Britain -- Made by Britain campaign is a good example of how this pays off with our ad partners. We've worked with them improving the trust in their brand, using high-end, high-performing social video around farming and communities. We started this work last year, and they've just renewed their partnership with us again and the new campaign gets underway later this month. As I said, we're seeing this quality capability keeping us top of mind with big agencies, the multi-platform campaigns supported by direct sponsorships with the likes of NordVPN on All Out Rugby League, Scottish Water on Hotline Live, our football product north of the border during the World Cup or our new partnership with Pure Gold on our Daily Expresso show. As an aside, Daily Expresso was YouTube's most watched U.K. news show in June ahead of some of the really established players. And beyond these individual examples, what's exciting is this creates that virtuous circle of video, where every time we can showcase our improved capability, we in turn attract bigger briefs often from new brands that we traditionally have not worked with. So this is an area where we're seeing good revenue growth from multiple sources and good future prospects, too. And as we continue to finesse and expand our video offering in the back half, including now from our U.S. teams who have more capability in this space. This there is a big factor in why excluding that local business, our direct revenues are up by 6%. We're doing more to monetize our scale audience in a way that we can more effectively control. To bring this to life for the last couple of presentations, we've always got a bit of a new tradition of highlighting our editorial video. But this time, given the recent World Cup, I thought it would be fitting to make it a football specific one. So if we could roll the VT. [Presentation]

So I think when we launched our Connecting with audience strategy, we didn't think we'd reach Clarence House and Prince William, but that was him hanging out with our Aston Villa podcast team. So before I wrap up, I want to leave you with a little bit of a mantra that will define our path forward. We are moving away from a pure volume play and focusing on original content distinctive brands for better returns. This isn't just an editorial choice that will form the likes of the commercial of a refocused brand-led business. We're transforming how we operate using our three core priorities to navigate the complex market while keeping our feet firmly on the ground with disciplined cost and cash management. Over this year, we're investing GBP 9 million exactly where it needs to be in our video capabilities, our technologies and the undeniable strength of our brands. We are simplifying, we are focused and we are executing. My confidence in our strategy comes from the core we've begun to build. We are not just holding steady. We're actively building the future of this company with a few key milestones still to come this year. We're scaling our digital subscriptions towards that 75,000 target and beyond. We're introducing new subscription products with the community brands. We're deploying our Launchpad platform across every news desk, ensuring our teams have the best tools to drive smarter, faster content decisions and creation, and we're opening up new revenue frontiers through strategic licensing deals and using AI to support large-scale digitization of our archive. So before we move to questions, let me sum up where we stand. While we've seen some welcome stabilization in our on-platform referrals since the start of Q2, we remain prudent and maintain a cautious outlook for the year. Our approach moving forward is singular, disciplined execution against our three core priorities, guided by this renewed focus on our brands. Meanwhile, we're simplifying the group through strategic cost actions, ensuring we operate with agility that the market demands. As part of this agility, we'll manage our print business to give the optimum returns for the medium term. And we're building on good foundations, and we're approaching a significant turning point for the business as we enter the penultimate year of our material pension funding contributions. We have a clarity, we have direction and the resilience to create long-term value. We're confident in our path, and we are ready for the future. Thank you. And I'll now take questions.

Gareth Davies from Deutsche Numis. Maybe two with a few bits from me. Firstly, the direct revenue, you said you're sort of proactively managing out lower margin local and plus 6 is a strong performance in the stuff that's kind of going well is higher margin. As we look into H2, we -- presumably, you've got a similar headwind until we get into '27 around that local. And how are you thinking about monetization on the local in terms of what you're swapping out really for the stuff you're getting rid of? So just really understanding that trajectory a bit more incorrect. And then on circulation, a couple of questions around it. Is it local? Is it national? Is it across the board? Is it a specific title? Did it feel like it was specific to a cover price increase? And how should we think about a cover price increase in the second half of the year in that context? And you also mentioned the trade-off of page views to subscription. Is there any evidence from what you can see that you're also having to accept a little bit of a trade-off for subscription in circulation?

Okay. So Darren, to take the circulation question. I can come back on that page view trade-off. But on the direct revenues, so as you said, the focus for us really is we restructured the sales organization for this year where we've effectively created a single entity. We try not to look in a way now of kind of regional and national. We're looking at the scale of the opportunity with the advertiser. So really, we're focused on kind of the head and the torso of our advertiser portfolio. We will, as you say, expect sort of headwinds across the back half of the year with that local before we go into 2027. But it's about making sure those teams when they're dealing direct with advertisers, as I said, of a certain size, they're able now to offer a lot more in terms of video. So we're rolling out new AI-supported video creative for those local teams. So clearly, if you're a small- to medium-sized business creating video creative has traditionally been hard. We can now offer advertisers the ability to create video out of their own assets through AI, and that is early stages, but it's seeing promising results. So yes, we will continue to see the sort of headwinds in the back half of the year, but we're optimistic as we reprofile that business. I'll let Darren comment on the circulation question about where it falls. But on the page views versus subscriptions, there's no evidence that, that's linked to the trade-off on circulation, if that was the question. We do see them as two distinct entities. But as I said, we have accelerated subscriptions over the last 3 months. And actually, as I've referred to, we've seen a relative stabilization of our page view number. So there are times where we need -- we will need to make decisions. Sometimes the correlation causation is hard to match, but I believe that the priority has to be building that subscription model more .Darren, do you want to take the circulation question?

Yes. No problem. So look, first thing I'd say, this is the first CPI certainly in my time, I'm sure probably for much longer that we've seen has declined outside of our tolerance levels, expected tolerance levels. So in that context, the only real data we have is around what we've seen recently. And therefore, in terms of is it really just the CPI itself is just a little bit difficult to unpick at the moment. We've clearly moved into an increasingly probably difficult macro environment. The cost of living is certainly going up for people. And then you get odd factors like we've had a really hot summer of people getting out and buying their newspapers and then you've got the World Cup as well. So there's all sorts of things that it could be. What's important to us is that we get another data point. So it's likely we will do the next CPI increase just to see how that one performs in order to be able to get more data. Needless to say, though, I think I've had this question over the years many, many times as to when will this come? It's come now. But again, we just need to make sure we understand it before we take any real action. Needless to say, our teams are expert at managing this. They understand their business very, very well, and we will get to the bottom of it. And in the meantime, we will be looking at what the strategic options are going into 2027 should we decide that we need to change tack based on data points. So you did ask a question about where it was coming from. It's primarily the nationals.

It's Nick Dempsey from Barclays. I've got two, please. So kind of anecdotally, local news agents, sort of corner shops, et cetera, either struggling to continue with sort of the weekly paperboy kind of approach or struggling to continue at all. Is there any factor that retail has got worse? And so people are having to go further afield to pick up their papers or they can't get that regular delivery that they're used to? Has that been any part of the weakening of volumes? The second question, just on the pension. So if we maybe are now talking about a higher rate of top line decline for the group, I'm looking at your commentary on '26 and '27 at least. Does that change the dynamic in terms of your next negotiations for the pension? So might we see those guys want to see top-ups for longer if the top line is predicted to be weaker for longer?

Shall I take the circulation, you take the pensions? I mean the question, no, there's no -- the retail point, we don't think is a factor in the change in trajectory on the circulation. As Darren says, this is more likely around the cost of living retail distribution and availability remains fairly constant. And clearly, as that market evolves, all of the distribution in retail, we will make sure we optimize to ensure the retail partners have the available copies. Do you want to take the pension?

Yes. So on pensions, so we are -- I'm sure you're all aware, we're currently in the triennial process, which will end at the end of March next year. So yes, we may be able to get it done a bit earlier, but let's see it will be the end of March. In terms of -- if I park the link, if you like, to performance for a moment, the reality is we are really in sight of the end of the pension contributions. So at the moment, on the current schedule, they stepped down to GPB 15 million in January 2028. I don't expect at the moment at all that we will have any change to those contribution schedules as the backstop, if you like. And the way I think about this is when we get to March next year, we finished the triennials, we only literally have 9 or 10 months to go in terms of getting to a point where we have the contribution schedules completed. So I don't, at the moment, feel that we need to go into the triennial looking to negotiate or renegotiate the pension contributions to a lower number. I just think it would be -- we would prefer to just make sure that we get these closed down, not only for the company, but also for the pension schemes as well.

Sean Key from Pan Liberum. I've got three questions, if I may, gents. First of all, on AI revenues sort of going forward, you pointed to a couple of different models, licensing, Tollbit, et cetera. It's more of a sort of thematic question. Where are you seeing in your conversations with the LLM providers that they see the real value in your content? Is it sort of some of the local content that maybe others don't have? Is it the back catalog? And I think you referenced sort of a digitization project going there? Or are they mainly looking for big national stories? Secondly, just touching on newsprint very quickly. Obviously, we've got ongoing conflicts in Iran. Can you just remind us what the outlook is for costs on newsprint, if there's any impact -- if you're seeing any impact from potential energy prices and then any sort of hedging or to the extent to which you're forward bought on that? And then thirdly, just on the subscriptions, I think you touched on both marketing investment and product improvement for subscriptions. Can you just give us a little bit more detail as to what sort of the plans are in the next 6, 12, 18 months? Are you looking at changing the ad load, the formats and anything else you're doing on that as well?

So again, Darren, if you take the newsprint costs, I'll take the other two. So on the AI question, well, look, the conversations with the large language platforms are as varied as they are. There is -- they all require slightly different things. I mean at a thematic level, they have a huge interest in real-time information because that is the thing that keeps those engines burning. Clearly, archive is of interest to them, but like any archive or evergreen content, that is a onetime value. So they all have a broad thematic that they want real-time content. They obviously need it to be accurate. And again, as a professional curated news organization, that is our USP. They want it to be original, of course, because they want as many different original sources to play into. So I'd say those are the broad themes. But I think that for me is the reason that when we engage with certainly some of the more established tech players where we have existing relationships, they see that value, and that's where I'm most hopeful to progress it. But they all have slightly nuanced plays and platforms on that. On the point around sort of improving subscriptions, I mean we sort of talk internally that we've kind of launched subscriptions, but really we just launched paywalls. There's a huge amount of stuff that we need to do. Even just in the way, for example, you experience the kind of paywall experience. We're relatively unsophisticated. We need to be much better in terms of driving conversion through that. Small things like Apple Pay and Google Wallet, all of that sort of stuff. So that is where the technology investment will go to make sure that when our users land, we drive up conversions and all that, and that's where the opportunity lies. So we will invest in people in terms of making sure that our brands have kind of brand representation so that our local, for example, in a Manchester or Newcastle or Belfast, where actually Belfast, we've already trialed successfully over the last year or so, those kind of activations, whether it be the local marathon or the local event. That's our kind of focus. So it will be a combination of technology and people to make sure that we kind of broaden out the offering. As I said, we do consider ourselves still in the foothills of subscriptions. We've got a long way to go, but I'm pleased with the progress we've made. Do you want to take the question around newsprint?

Yes. Yes. So we will all remember going back a few years when prices certainly did escalate as part of, I think it was the Ukraine war at the time. We haven't seen that in relation to what's going on in Iran. It's been pretty stable. We have just had a round actually just the half year round with our main suppliers. And while there may be a little bit of upside pressure that's more, I think, more market-driven rather than specific to anything else. What I would say is, I mean, the industry is also contracting. So we have to keep an eye on that. We're seeing some suppliers considering moving to things like packaging. So -- so that will be one thing we do need to just keep an eye on as we go forward. But no, we have an excellent negotiator of our newsprint in the business. And at the moment, we're seeing relative stability in that area.

A couple that have come through on the webcast. Can you give me a sense of what's happened to Google referrals and on-platform audiences in H2 compared to H1 of this year, what you've seen in the last few weeks?