By Steve Busfield: Guardian Media Group’s annual pre-tax loss has grown significantly for the financial year to the end of March, due to writedowns including its investment in Emap.
However, GMG’s operating loss before exceptional items has fallen compared to the previous 12 months and operating losses at national newspaper division Guardian News & Media were steady compared to the previous year.
Provided Guardian News & Media’s revenues continue to stabilise, losses are forecast to fall in the current financial year after a round of cost cutting, outgoing chief executive Carolyn McCall told GNM staff today at a series of internal briefings.
McCall, who is leaving GMG to join EasyJet as chief executive at the end of June, said the company’s pre-tax loss grew year on year because of a writedown of its investment in trade magazine, information and events business Emap. GMG bought Emap in partnership with Apax Partners in December 2007 for about £1bn and runs the business as a joint venture with the private equity firm.
Despite the writedown, McCall said that business publishing group Emap was still generating a large operating profit.
GMG’s annual results for 2009/10, to be published in July, will also be adversely affected by a reduction in the book value of GMG Radio and Manchester Evening News publisher GMG Regional Media, which was sold to Trinity Mirror (LSE: TNI) earlier this year.
In 2008/09 GMG made a pre-tax loss of nearly £90m and GNM, which publishes the Guardian, the Observer and guardian.co.uk, the website network which includes MediaGuardian.co.uk, an operating loss of £36.8m.
McCall said GNM’s costs had been cut by £26.2m. She added that GMG has more than £260m in cash and investment, a decline of less than 3% year-on-year.
The GNM managing director, Tim Brooks, said that cost savings
This article originally appeared in Â© Guardian News & Media Ltd..