GMG pre-tax losses reach almost £90m

by John Reynolds, mediaweek.co.uk 31-Jul-09, 14:50

LONDON - Guardian News & Media (GN&M), the publisher of The Guardian and Observer newspapers, has reported operating losses increased from £26.4m to £36.8m in the year to the end of March 2009, claiming it is experiencing "the toughest trading conditions seen for many years".

GN&M, which said it is "reducing its cost base significantly", reported turnover of £253.6m, down from £261.9m the year before, while the group overall (Guardian Media Group) reported pre-tax losses of nearly £90m.

In May, GN&M said it was planning to cut back its editorial staff from 850 to 800 as part of a plan to reduce editorial costs by £10m. It has also reviewed its commercial operations this year with a brief to improve efficiencies.

In its financial results, it pointed to its "successful" move from Farringdon to Kings Place, which has prompted the integration of its print and online operations.

Its sister division, GMG Regional Media, the publisher of the Manchester Evening News, experienced a fall in operating profit, from £14.3m to £0.5m, after it was hit by steep declines in recruitment advertising (down 34%) and property (46%). Turnover was down from £120.5m to £94.5m.

GMG Regional Media, which in April this year announced 300 job losses, said trading conditions had, since March, got worse and it had been a making a monthly trading loss for six months.

GMG Radio, which includes the Smooth Radio brand, said its advertising decline had outperformed the market, falling less than 5%, compared to the 14% experienced across the market.

However, the division fell into the red, recording an operating loss of £6.6m, compared to a £0.1m profit the year before, on revenue of £46.6m.

The group's joint venture with private equity company Apax Partners, Emap, reported a turnover of £284.9m, and an operating profit (excluding restructuring costs, amortisation and exceptional items) of £98.2m.

Its other tie-up with Apax Partners, Trader Media Group, the publisher of Auto Trader, posted an operating profit of £110.8m, down from £119.8m, on turnover of £296m.

Overall, turnover at the group including its investment in the two joint ventures, was £637.9m, with a pre-tax loss of £89.8m, compared to a pre-tax profit of £306.4m the year before.

The group, which is headed by chief executive Carolyn McCall, said the big hit on profits had been impacted by a £26.4m impairment charge and two significant fair value losses. The 2008 figures also included the profit from the sell off of 49.9% in Trader Media Group.