Losses up at GMG's papers as austerity measures bite
Tuesday 02 August 2011
Guardian Media Group yesterday warned that it would continue to face "challenging" trading conditions as the group's operating losses widened further. GMG's newspaper business suffered badly, with operating losses, before one-offs, at Guardian News & Media, the publisher of The Guardian and The Observer, coming in at £38.3m for the year to the end of March against £37.8m the previous year.
The losses would have been even higher if not for cost cuts of more than £26m last year at the newspapers – revenues declined from £221m to £198.2m.
The group said it had suffered a "sharp decline in recruitment advertising" as a result of economic difficulties and particularly cuts in government spending, which have seen tens of thousands of public sector jobs axed and, as a result, the bottom falling out of the market for recruitment ads.
While digital revenues weredescribed as "robust" they failed to offset the decline in revenues from the newspapers.
The Guardian's editor, Alan Rusbridger, has committed to a "digital first" strategy but has not followed other titles in introducing an online paywall for the group's papers.
Overall group revenues, including shares in joint ventures and GMG's other business, declined to £255m from £280m. At the pre-tax level, the group made a small profit of £9m against a loss of £171m last time.
Andrew Miller, who replaced Carolyn McCall as GMG's chief executive after the latter's departure for EasyJet, warned that "reshaping our cost base" would be a "critical element" of the company's new strategy.
GMG's annual report revealed that Mr Miller, who assumed the role of chief executive on 1 July, was paid £572,000. He waived his entitlement to an annual bonus. Mr Rusbridger was paid £455,000 against £411,000 the previous year, when he voluntarily gave up 10 per cent of his salary.
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