Guardian Media Group (GMG) – publisher of the Guardian and The Observer – has managed to reduce losses by 35% after completing the first year of its three-year cost-saving plan.
For the 12 months to 2 April 2017, GMG posted a profit loss of £44.7 million, compared to the £68.7 million recorded in 2016.
Meanwhile, group revenues were up by 2% year-on-year to £214.5 million, while digital revenues grew by 15% to £94.1 million – which GMG attributes to mobile and app revenue, digital subscriptions and memberships, one-off reader contributions and foundation grant revenue.
The publisher currently has more than 400,000 regular paying members and subscribers to its print and digital products. While print circulation has declined by a little more than 7% year-on-year, online readership has increased 17.4%.
Last year parent company Guardian News & Media announced it is looking to shave off more than £53 million from its £268 million annualised cost base in an effort to offset both declining print revenues and slower-than-expected growth in digital revenues, which no longer sustain outgoings.
As part of that plan, GMG signed a contract with Trinity Mirror last month to take on the responsibility of printing both Guardian and Observer newspapers from early 2018 in tabloid format, which will see the closure of GMG’s Berliner printing sites in Trafford and Stratford which it bought for £80 million in 2005.
The publisher also completed the sale of its 22.4% stake in Ascential for £239 million.
Around 300 jobs have been lost so far.
The Daily Telegraph has also reported that the publisher has drawn up plans to erect a paywall if its existing membership scheme and appeals for donations do not meet financial targets. Historically, however, the Guardian has been firmly opposed to the idea of a paywall, arguing that it wishes to operate in the spirit of the Internet and remain “open and free”.
Commenting on Tuesday’s results, chief executive officer of GMG, David Pemsel said: “Despite the challenging market conditions faced by all news organisations around the world, our three-year strategy is well on track to achieve its financial goals and to secure the future of the Guardian.
“We are reducing our costs, growing new reader revenue streams, and developing our businesses in the US and Australia. We have grown our digital revenues, and we are achieving strong growth in membership, subscriptions and contributions. More people are paying for Guardian journalism than ever before.
“This is helping to build a strong foundation from which we will continue to invest in some of the most trusted journalism in the world.”
