Even with the FTSE 100 climbing to near-record highs, there remain plenty of high-yield income opportunities for investors to explore in 2025. This is especially true when venturing beyond large-caps and looking towards the smaller players like Reach (LSE:RCH).
The media and publications business has had a rough time of late, dropping by almost 30% in the last 12 months. But despite the downward trajectory of the stock price, the company has continued to maintain its dividend.
That means investors now have the chance to start earning a juicy 10.7% dividend yield. And at today’s price, a £500 investment snaps up 726 shares, unlocking a £53.29 passive income in the process.
So is this an opportunity worth taking? Or are investors at risk of being lured into a trap?
What’s going on with Reach?
As a quick crash course, Reach is the business behind over 120 national and regional newspapers such as the Mirror, Express, and Daily Star. Across both its print and digital channels, the firm’s content is read by roughly 70% of the British population, with over 100 million followers on social media worldwide.
Print & publishing is a tricky business to be in. Readers are increasingly moving away from traditional magazines and newspapers in favour of free online articles. And consequently, Reach’s print-based revenue streams, including advertising, are steadily declining. In fact, related revenue across the first half of 2025 dropped by 15.4%.
Some of this impact is being offset by new revenue streams from serving digital advertisements. But with the consumer spending environment tightening, digital ad spending continues to be soft. And so, with a shrinking top line, pre-tax profits are down 18% so far this year.
Needless to say, this also puts strain on the group’s free cash flow and, in turn, dividends.
A hidden gem?
Despite the challenging environment that Reach is having to navigate, it’s not all bad news.
Management is fully aware of the shifting landscape and is actively investing in its artificial intelligence (AI) and e-commerce capabilities to offset the declining performance of its legacy print business. This also includes further diversifying the revenue stream by ramping up premium subscriptions to provide far more predictable and consistent cash flows.
Furthermore, as previously mentioned, the group has been keeping a tight grip on its expenses. In fact, even with the increased National Insurance contributions, the firm’s operating costs actually fell during the first half of 2025. And by restructuring various departments, Reach has started eliminating duplication of work, allowing more resources to be allocated to growing its audience, with 6% growth already secured so far this year.
If the firm can continue to hit these operational milestones and deliver further efficiencies, the business could be well-positioned to capitalise on the eventual recovery of the digital advertising market. And in this scenario, its 10.7% yield would look far more sustainable.
The bottom line
Reach appears to have solid recovery potential. I want to see more progress before considering buying any shares today. But it’s definitely an income stock that investors should keep an eye on, I feel.
