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Most UK traders have in all probability by no means heard of Attain (LSE: RCH) — a £226m media firm on the FTSE All-Share with a ten% dividend yield.
But many Britons have possible made use of its merchandise. Attain is likely one of the UK’s largest newspaper teams, publishing 240 regional papers together with the Each day Mirror, Sunday Mirror, Each day Categorical, Sunday Categorical, Each day Star and the journal OK! It has additionally branched out abroad, turning into the UAE’s most influential advertising and expertise company.
Based again in 1903, it’s been round for 122 years and regardless of a turbulent historical past, stays an integral participant within the British media panorama.
The newest numbers present combined fortunes. In 2024, income slipped barely to £538.6m. However, impressively, working earnings jumped 26% to £80m, whereas earnings greater than doubled to £53.6m.
Crucially for dividend traders, the yield’s not solely chunky but additionally seems sustainable. The corporate’s paid dividends for 11 consecutive years and at present has a payout ratio of 46.4% — giving it sufficient room to reinvest in development whereas nonetheless rewarding shareholders.
And the valuation? Effectively, that’s the place issues get attention-grabbing. The shares commerce on a price-to-earnings (P/E) ratio of simply 4.5, a price-to-book (P/B) ratio of 0.33 and a price-to-sales (P/S) ratio of solely 0.43. Mixed, these three ratios level to a inventory that’s being drastically undervalued by the market.
However there’s a purpose for the market’s scepticism.
Trendy publishing dangers
Attain’s share value has been sliding for over a yr, down round 30% since August 2024. That’s a regarding drop contemplating that the FTSE 100‘s up 10% – suggesting no fault within the total UK financial system.
Nevertheless, the true issues began a lot earlier.
Throughout the 2008 monetary disaster, it misplaced 95% of its worth and has by no means totally recovered. There was a short resurgence in the course of the pandemic as information consumption spiked, however as soon as that subsided, the momentum shortly pale.
The share value has successfully traded sideways for 3 years, reflecting the structural challenges within the business. Print continues to say no, whereas digital promoting revenues are notoriously fickle. And now synthetic intelligence (AI) poses a brand new headache. With engines like google summarising information in seconds, many readers by no means make it to the writer’s web site — and which means misplaced advert income.
My verdict
Regardless of these headwinds, Attain isn’t sitting nonetheless. Reasonably than fading away, it appears intent on reinventing itself. The corporate lately struck an unique take care of Egyptian macro-influencer Marwa bin Hassan, signalling a willingness to faucet into world digital media developments.
It has additionally outlined clear development priorities: increasing video and audio content material, embracing AI to enhance effectivity, and pushing more durable on digital subscriptions to scale back reliance on promoting.
Current first-half outcomes had been encouraging, with income beating expectations and administration expressing confidence in hitting full-year targets for 2025.
For me, this makes Attain an interesting proposition that’s value contemplating. Sure, the dangers are actual — however with such a low valuation and a ten% dividend yield, it may very well be an undervalued and probably rewarding inventory for a diversified earnings portfolio.
