GMG’s Profits Fall In Lead Up To Guardian Downsizing
Guardian Media Group (GMG) has seen it’s profits impacted on by projects amounting to more than £100 with pretax profits for the Group almost halving, dropping to £22.9 million from £43.8 million this time last year.
Group turnover for GMG, however, increased by 18% to £751.9 million for the period and total operating profit was shown to be up to £122.4 million from £84.5 million.
The loses seen by the media group are attributed to its £80 million initiative including changing the format size of the publication to compact and investing in three new colour presses. A further £24 million has been committed to new all-colour presses for GMG’s northern local titles.
GMG’s national newspapers division continues to perform well in what Paul Myners, chairman of GMG, called a “competitive environment”. The Guardian managed to secure a 17% market share in the period, while the Observer rose to nearly 17%.
Operating losses for the national newspapers were £18.6 million, though turnover was up by 3% with the division working towards clear targets to enable it to achieve profitability in the longer term.
GMG’s regional newspapers achieved a 6% growth in operating profits to a new high of £32.6 million, GMG Radio returned its first operational profit after deducting digital costs.
Myners drew attention to the continuing investment in online developments across the Group highlighting the success of GuardianUnlimited attracting the largest audience of any UK online newspaper, with over 10 million unique users and 100 million page impressions each month.
Sir Robert Phillis, chief executive of GMG said that the Group was now stronger and more financially secure than at any time in its history. He asserted that changing the format of its publication would allow its national newspapers to leap ahead of the rest of the market.
.The changes will see the Guardian become a mid-sized title by autumn this year, while the Observer will make the change in early 2006 (see Guardian To Downsize Early, Observer To Follow).
The move has been widely anticipated, with the Guardian making no secret of its intention to downsize. Mock-ups of the new-look newspaper were seen by senior media buyers as early as March last year (see Guardian Considers Midsize Edition To Boost Sales), although a confirmed time-frame for the shift has, until now, been elusive.
The Group’s radio stations are also doing well, with results posted in May showing a positive end of year trading update, enjoying revenue growth of 17% year on year for all its stations (see GMG Reveals 17% Revenue Growth Across All Stations).
The radio division of GMG has shown remarkable growth, outperforming the industry as a whole, with revenues from Jazz FM and Smooth FM stations rising to £24.5 million in the financial year ended 31 March, up from £21 million the previous year.
Guardian Media Group: 020 7713 4452 www.gmgplc.co.uk/