Guardian spikes plan to float non-core holdings

The Guardian Media Group has ruled out the flotation of its non-core holdings, despite strong support for the plan from some members of the board.

The decision, reached in recent weeks, ends several months of discussions over a plan to sell a stake in the company's Auto Trader title and other publications to the public. The float proceeds would have been used to support the core newspaper titles, the Guardian and the loss-making Observer.

"The view was taken that the non-core assets were cash cows, and that they would be very useful to the group," a senior Guardian source said last night.

The prospect of a flotation, first revealed in The Independent in October, had been viewed by some board members as the best way to meet the rising costs of the Observer.

Meanwhile, the Canary Wharf bomb took its toll on interim results at the company, which set aside a whopping pounds 14.4m to cover the costs of shifting its printing from the damaged South Quay site to West Ferry Printers. The amount is believed to cover the costs of redundancies at the former printing site, as well as the costs of installing new colour and insertion machinery.

Before the exceptional charges, pre-tax earnings were ahead 41 per cent to pounds 17.9m, despite a newsprint bill 24 per cent higher at pounds 5.5m for the six-month period. Factoring in the costs of the South Quay move, pre-tax profits were pounds 1.8m.