Media

Guardian owner breaks even after decades of losses

Operating profit of £800,000 came amid ‘good growth’ in digital advertising

Revenues were up 3 per cent in the year to £223 million, which the company said was the highest level in a decade. Photograph: iStock
Revenues were up 3 per cent in the year to £223 million, which the company said was the highest level in a decade. Photograph: iStock
Wed May 01 2019 - 11:14

Guardian News and Media, which publishes the Guardian and Observer, has broken even after decades of financial losses, following the completion of a three-year restructuring plan aimed at saving the news outlet.

The UK group swung to an operating profit of £800,000 (€930,660) in the year ending April 1st, its first in two decades, and highlighted “good growth” in digital advertising and reader contributions. Losses before interest, taxes, depreciation and amortisation were £19 million a year earlier, clawing back from a loss of £57 million in the year ending April 2016, when the company outlined its restructuring plan.

The figure, which followed costs being cut by a fifth over the past three years, did not take into account cash payments of between £25 million and £30 million, which included capital expenditures on technology as well as costs related to redundancies and management of the nearly £1 billion Scott Trust Endowment Fund that the company relies on for funding.

Revenues were up 3 per cent in the year to £223 million, which the company said was the highest level in a decade.

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"Although the significant turbulence in the global media sector shows no sign of abating any time soon, we have developed a set of core strengths which will help to ensure the Guardian's ongoing independence and financial sustainability for the long term," said chief executive David Pemsel.

Paywall

The Guardian has refused to follow most of its peers and introduce a paywall to generate money from its journalism, instead relying on voluntary contributions from its readers. The company said it has more than 655,000 monthly paying “supporters”, and had received an additional 300,000 one-off contributions in the past year.

By 2022, the company aims to reach two million supporters who contribute through “regular or one-off payments or subscriptions”.

Mr Pemsel and Katharine Viner, editor of the Guardian, set out goals regarding financial sustainability, saying annual cash requirements were to remain in line with the expected £25 million to £30 million annual returns of the Scott Trust. – Copyright The Financial Times Limited 2019