In its results for the financial year ended 1 April 2018, the publisher of The Guardian and The Observer newspapers and Theguardian.com achieved sales of £217m, up 1% on the £214.5m achieved in 2017.
The group’s digital revenues grew by 15% year-on-year from £94.1m to £108.6m and now make up over 50% of total sales. This offset falling print revenues, down 10% year-on-year from £119.6m to £107.5m.
GMG had an EBITDA loss before exceptional items of £23.1m, 48% lower than the £44.7m loss it recorded in 2017.
Guardian News & Media (GNM), the news and media operations of The Guardian, meanwhile, had an EBITDA loss before exceptional items of £18.6m, reduced by 52% year-on-year from the £38.9m loss recorded in 2017.
Financially, the target of the group’s three-year plan commenced in 2015/16 to boost its revenues and reduce its cost base is for GNM to break even at underlying EBITDA level by April 2019 in order to provide a sustainable future for The Guardian.
The group said it remains on track with this target and undertook a number of transformative initiatives in this financial period as part of its three-year plan. Representing a “fundamental restructuring” of its operations, these transactions have been categorised as exceptional.
They included the group’s outsourcing of its print operations to Trinity Mirror when it switched from the Berliner format to tabloid, including onerous lease provisions with regard to print sites, at a cost of £12.7m.
The group spent £80m when it first switched to the Berliner format in 2005, which included investment in three Manroland Colorman presses.
Its two print sites, in Stratford, London and Trafford Park, Manchester, are currently shuttered. Stratford, which is a leased site, houses two of the presses while the Trafford Park site, which GMG owns, houses the other press. All three machines are equipped with 10 towers and two folders.
The group told PrintWeek “we are exploring a number of options” with regard to the future of the presses, while adding in reference to the Trafford Park print site, “in phase two of the project we will evaluate the best strategy for the land”.
An industry source told PrintWeek: “The equipment is being offered around the world for sale but the world newspaper market is not particularly buoyant at the moment, even though the Berliner format is popular in some parts of the world.”
Other exceptional costs included severances at £9.2m, compliance with GDPR at £1.3m, and onerous leases on vacation of office space at £2.6m.
Separately, the group said GNM has continued to grow its base of regular paying supporters, members and subscribers to print and digital products.
As of 30 June 2018 it had a total of 570,000 regular supporters across these categories, and had received an additional 375,000 one-off contributions in the past 12 months. Reader revenues represented more than half of GMG’s total revenues.
Guardian Media Group chief executive David Pemsel said: “In 2016 we set out a three-year strategy based on building deeper reader relationships and getting GNM’s finances to break even at operational level, in order to bring the organisation as a whole back to sustainability.
“The global media sector continues to face challenging conditions, but our strategy is on track to achieve our target and secure the future of the Guardian.
“We have grown our revenues for a second consecutive year and more people are paying for Guardian journalism than ever before. Thanks to the hard work of everyone at GMG, we are building a strong foundation in order to invest in some of the most trusted journalism in the world.”
