The media group has announced preliminary results for the 2018/19 financial year. Sales increased for the third year running, rising by 3% to £223m. The three-year strategic plan to turn around the group’s fortunes has borne fruit, with the business posting EBITDA of £800k, a near-£20m improvement on the prior year when it made an EBITDA loss of £19m.
It is the first time the newspaper and online publishing group has posted any sort of operating profit in more than 20 years.
GN&M is not financed like a conventional business, and relies on the support of the Scott Trust Endowment Fund. The huge losses previously racked up over a number of years had called the sustainability of that model into question.
Editor-in-chief Katharine Viner said: “Thanks to the support of our readers and the incredible hard work and talent of Guardian staff, we have reached an important financial milestone. We are now in a sustainable position, and better able to deliver on our purpose by producing outstanding journalism that understands and illuminates our times.”
GNM ditched its unique-to-the-UK Berliner format and switched to tabloid at the beginning of last year, closing its two print plants and outsourcing print to Reach Printing Services (formerly Trinity Mirror) in the process.
Overall costs across the entire group, including other restructuring, have been reduced by more than 20%.
The group has also brought in new revenue streams. Rather than instigating a paywall, it has adopted a supporter model whereby readers voluntarily contribute. This has grown to encompass 365,000 recurring contributors, with a further 340,000 one-off payments from around 300,000 accounts.
It also has 190,000 subscribers to its app and tablet editions.
Print subscriptions to the Guardian, Observer and weekly news magazine Guardian Weekly – which offer a discount on the cover price – are also at a record high of 110,000.
The group described advertising revenues as “resilient” in a challenging market. Print advertising now makes up less than 8% of total sales.
Print’s contribution to the profit figure was not disclosed.
At the beginning of this year the Guardian switched to compostable wrap for the previously polybagged Saturday Guardian supplements, which are now all printed in the UK after Weekend magazine moved from Circle Media’s Roto Smeets to Walstead Bicester. The Guardian put the price of the Saturday edition up to £3.20 at the time, and also increased the price of the daily paper to £2.20.
PrintWeek understands that the Guardian has sold its Berliner presses – an £80m investment in 2004 – to asset management and disposal specialist Corporate Assets, which is in the process of selling them off for scrap or parts.
Viner and chief executive David Pemsel set out a new three-year strategy at the beginning of the group’s new financial year last month.
They aim to increase the number of supporters and subscribers to 2m by 2022, and for the group’s cash requirements to be covered by the likely long-term returns of the Scott Trust Endowment Fund, of £25m-£30m a year.
