GMG like-for-like profits plummet 95%

Guardian Media Group has reported “an exceptional” period for the year ended 30 March, in which the sale of its stake in Trader Media Group prevented profits falling by 95 per cent.

The group’s sale of its 49.9% share of the publisher of Auto Trader to venture capitalist Apax helped boost pre-tax profits to £306.4 million, up from £97.7 million in 2007.

Meanwhile, like-for-like profits dropped 92 per cent to £5.1m as the group continues its transition from a UK newspaper operation to a 24/7 international print and digital publisher.

Despite the mixed fortunes, GMG chairman Paul Myners, says: “It has been an exceptional year for Guardian Media Group, which, as it passes its centenary, has never been in a stronger position.

“The steps we have taken to strengthen and diversify our business portfolio mean that we are well placed to fulfil our core purpose: securing the financial and thereby editorial independence of the Guardian.”

Turnover for Guardian News & Media (GNM), the division that publishes The Guardian and The Observer newspapers, was up 6.5% from £245.7 million in 2006/07 to £261.9m in 2007/08. Newspaper display ad revenues increased 6.6% and digital display and recruitment sales were up 49 per cent.

Despite these sales lifts, an increase in investment and restructuring costs resulted in £24.9m losses at GNM, up 36 per cent year-on-year.

GMG’s regional media division was also said to be “seriously affected” by difficult ad market conditions, with operating profit down £5.1m to £14.3m

Elsewhere, profits at GMG Radio, which includes the Smooth Radio network, excluding exceptional items were down from £3.5m in 2007 to £100,000. The fall was attributed to high levels of brand investment, the cost of integrating the Saga stations acquired in February 2007 and a weak national ad market.

Carolyn McCall, chief executive of GMG, said: “Our businesses operate in an intensely competitive, fast-changing media environment. In this context, we are very pleased with our performance and the progress we have made.”

GMG warned of challenging times ahead and said that the continuing economic downturn would have a “significant impact” on important revenues streams in the coming financial year.

However, the group remained confident the diversification of its assets outside of newspapers offered “solid foundations” for the business.

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