GMG Boss Predicts Substantially Smaller Margins For Local Press

The chief executive of Guardian Media Group has said that regional newspaper businesses will have to be “financially recalibrated” because they will have substantially smaller margins in the future.

Speaking to the Financial Times, Carolyn McCall said that although she now had different expectations of GMG owned titles such as the Manchester Evening News, she was not about to get rid of any.

Her interview with the FT comes as GMG announces pre-tax profits of £306.4 million for the year ending March 30, up from £97.7 million in 2007 following the sale of its 49.9% stake in Trader Media Group to private equity firm Apax Partners.

GMG’s digital revenues were up 36% to £85.1 million in 2007/08, with the fastest growth coming in the news publishing division’s digital display ads, up 49%.

Guardian News & Media, which publishes the Guardian and Observer newspapers, saw losses widen to £24.9 million from £15.9 million after the group invested £19 million in a revamp of its Guardian.co.uk website.

However, the company’s regional media division saw operating profits fall from £19.4 million to £14.3 million on revenues of £120.5 million, down from £122.2 million.

McCall told the FT: “They are good businesses, with potentially good profits, but the margins are going to come down.

“We have owned the MEN for a long, long time and it has turned over enormous amounts of cash. It’s not costing us money. It’s costing us profit and that’s bad, but it’s not that bad.”

Guardian Media Group: 020 7713 4452 www.gmgplc.co.uk