Guardian Media Group Plc (GMG) today announces its results for the financial year ended 31 March 2013

Summary

• Revenue from continuing businesses was £206.8m (2012 £206.3m)
• EBITA from continuing businesses grew to £54.5m (2012 £45.9m)
• Profit before tax improved to £22.7m (2012 (£19.8m) loss)
• Combined cash and investment fund grew to £253.7m (2012 £225.8m)
• GNM revenue was £196.3m (2012 £194.4m)
• GNM digital revenue increased by 28.9% to £55.9m, exceeding the decline in print revenues
• GNM EBITA (£30.9m) loss (2012 £(44.2m) loss), reflecting the success of the continuing five-year transformation plan
• Guardian digital traffic 78.3m (ABCe, March 2013) was up 15.5% (note: latest ABCe data released in May 2013 recorded Guardian digital traffic at 83m)

(Note: the GMG figures for 2012 have been restated to exclude the contribution from GMG Radio, which was sold in June 2012)

(Note: the GNM revenue and GNM digital revenue figures for 2013 and 2012 have been restated to exclude revenue from Kable, the trade and assets of which were sold in July 2013)

Dame Amelia Fawcett DBE, chair of GMG, said:

“GMG has made good strategic, operational and financial progress over the last 12 months, giving us increased confidence that we are heading positively and confidently in the right direction. Most striking and encouraging has been the continued strong growth in digital revenues, which exceeded the decline in print.

“At Group level, we were pleased to convert last year’s loss into a profit before tax, while EBITA also improved. This is due in no small part to the success of our transformation plan, as we continue to map our way towards the digital future.”

Andrew Miller, chief executive officer of GMG, said:

“The financial impact of our digital-first strategy, launched two years ago, is clearly demonstrated in our performance in 2012/13. A sharp increase In the contribution of our digital operations to revenue was a striking feature, enabling a modest increase in overall Group revenues. Having committed to digital earlier than our peers, we are now reaping the benefits.

“There was a significant reduction in losses at Guardian News & Media (GNM), as it completed the second year of its five-year transformation programme. The reduction in losses would have been even greater, had we not chosen to invest a significant proportion of the efficiency savings in new developments. Investing in the future is a key part of our strategy for this news organisation – every bit as important as the target of taking £25 million out of the cost base by the end of 2015/16. Thus far, we are meeting or exceeding all our targets in this respect.

“The contribution of our portfolio companies – Trader Media Group and Top Right Group – amounted to £73 million in the year. Their performance, together with that of our cash and investment fund, is vital in giving us the headroom to allow the newspapers to take full advantage of the opportunities offered by digital, and to develop the Guardian brand on a global scale.”

Guardian News & Media

When the Manchester Guardian launched on 5 May 1821, it had 1,000 readers, was published weekly and ran to just four pages.  Today, the Guardian has more than 40 million readers, most of them outside the UK, is the third most-read, English-language newspaper website in the world and is well on its way to becoming a truly global media organisation.

Its transformation began with an early move to establish a digital presence over 15 years ago. A series of sustained journalistic and digital innovations, including the launch of a digital-first strategy two years ago, resulted in rapid audience growth, both in the UK and across the rest of the world, showing a clear global appetite for its views and content.

2012/13 showed a significant improvement in the financial performance of GNM. Digital revenue increased by 28.9% to £55.9m. Total revenue showed a small increase at £196.3m against £194.4m in the prior year. The loss on EBITA was reduced from £44.2 million to £30.9m. This reflected a combination of cost savings arising from increased efficiency, partly offset by investment to develop the business.

This improved financial performance came during a year of further outstanding editorial achievement and against the background of rapidly expanding readership. At the end of the financial year, the Guardian’s online audience was 78.3 million monthly unique browsers, up from 67.8 million in March 2012.

Investments

Our investment companies continued to perform strongly in challenging markets. Trader Media Group, in which GMG has a 50.1% share, contributed £38.3 million (2012 £37.1 million) to GMG’s results, being the share of post-tax results plus interest receivable and similar income. Top Right Group, in which GMG consolidates a 32.9% share, contributed £35.0 million (2012 £12.6 million) on the same basis. The TRG year-on-year increase benefitted from the share of profit of £29.5 million on the sale of CAP Motor Research in May 2012.

Cash and Investment Fund

The combined value of the cash and investment fund increased from £225.8 million to £253.7 million, benefitting from the proceeds from the sale of GMG Radio, partically offset by cash outflow to fund GNM’s operations. This provides a healthy level of financial resource for the continued development of the Group.

Outlook

Andrew Miller said:

“With the launch of Guardian US in 2011 and Guardian Australia in 2013, the Guardian has become a truly global news organisation, with 40 international journalists, from China to west Africa, together with large reporting teams in London, New York and Sydney.

“As we have seen so spectacularly in recent months, having a powerful global brand – underpinned by financial stability, a unique ownership structure and strong editorial values – means we are well-placed to ensure a long-term, commercially viable future for Guardian journalism.”

Dame Liz Forgan DBE, chair of The Scott Trust, said:

“These are testing times for the newspaper industry, and a truly independent voice, free of the constraints and conflicts that are inevitable in large commercial media groups, has never been more important.

“The success of the Guardian on a global stage bears witness to the wisdom of our vision of the opportunities the new technologies offer to expand and enrich our journalism and to involve our audience in deeper and different ways. While many challenges lie ahead, the achievements of the last few years give the Trust every confidence that its core purpose is secure.”

Ends

Further information

Colin Browne 07733 103 800
Helen Dagley 020 3353 2427

Full annual report available at: http://www.gmgannualreview2013.co.uk

Notes for editors

About The Scott Trust Ltd

The ultimate owner of the Guardian is The Scott Trust, which was originally created as a trust in 1936 to safeguard the title’s journalistic freedom. In 2008 it was replaced by a limited company with the same core purpose of the original trust: to secure the financial and editorial independence of the Guardian in perpetuity, while its subsidiary aims are to champion its principles and to promote freedom of the press in the UK and elsewhere. Other than to cover expense, The Scott Trust takes no dividend from the group’s businesses, whose profits are instead reinvested to sustain journalism that is free from commercial or political interference.

About GMG

Guardian Media Group is wholly owned by The Scott Trust Ltd, which exists to secure the financial and editorial independence of the Guardian in perpetuity. GMG’s core business is Guardian News & Media, publisher of the Guardian and Observer newspapers, guardian.co.uk, the US news site guardiannews.com and the recently launched Australian news site guardian.co.uk/australia.

The group’s portfolio of investments includes:

• Trader Media Group: one of Europe’s largest specialist media companies, and publisher of the Auto Trader website
  Trader Media Group is jointly owned by GMG and Apax Partners
• Top Right Group (formerly Emap): a leading international business-to-business digital intelligence and events business, also jointly owned by GMG and Apax Partners
• GMG Property Services: the leading provider of software, technology and design solutions to the property industry
• An externally managed investment fund