Guardian Media Group's pre-tax losses rise to £171m

Guardian Media Group today reported an increased pre-tax loss of £171m for the 12 months to the end of March.

The loss for 2009/10 compared with a pre-tax loss of £96.7m in the previous financial year, and was primarily due to writedowns of £96.5m in GMG's investments in Emap and £63.9m in GMG Radio.

Turnover at GMG's wholly owned businesses fell from £310.9m in 2008/9 to £280m in 2009/10, while turnover including the joint ventures Trader Media Group and Emap fell from £543.4m to £476.2m.

But the operating loss before exceptional items of the wholly owned businesses, which include Guardian News & Media, publisher of the Guardian, the Observer and theguardian.com, part of the website network that includes MediaGuardian.co.uk, fell from £65.2m to £53.9m.

GNM's costs were cut by £26.2m following restructuring and the cutting of 203 posts, with voluntary redundancies in editorial and further job losses and outsourcing of operations in commercial.

GNM's revenues fell by £32.6m. Its operating loss was £34.4m compared with £33.7m the previous year.

GMG's cash and investment fund fell slightly from £267.7m to £260.8m.

Emap's operating profit fell from £98.2m to £90.1m. Trader Media Group, including Auto Trader, saw profits before exceptionals fall from £110.8m to £104.8m, with digital contributing 90%. Both businesses are run as joint ventures between GMG and private equity firm Apax Partners.

GMG Radio posted an operating profit before exceptional items and amortisation of intangibles of £600,000, compared with a £6.6m loss the previous year.

The GMG chair, Amelia Fawcett, said: "Guardian Media Group remains well positioned in terms of overall resources and general financial health, and has delivered a satisfactory performance in the most challenging of years.

"The pre-tax loss was driven primarily by non-cash adjustments relating to asset impairments, not cash outflow. During 2009/10, despite economic turmoil and continued upheaval in the creative industries, GMG's combined cash balance and investment fund declined by less than 3%."

Carolyn McCall, the outgoing GMG chief executive who is leaving at the end of the month to join easyJet in the same role, added: "Significant cost savings during the year led to a fall in operating loss before exceptionals."

"The media industry faces continued uncertainty. Nonetheless, GMG can look ahead with cautious optimism, and with confidence in the future of the Guardian."

GMG said: "We anticipate that the ongoing cost reduction programme will reduce GNM's operating loss in the current financial year (2010/11), provided that revenues are stabilised.

"As GMG's pre-tax loss in 2009/10 was driven by large, one-off charges, we anticipate a substantial reduction in the pre-tax loss in the current financial year. We also expect an improvement in GNM's performance due to the changes made during 2009/10, which will impact positively on GMG's results."

Andrew Miller, GMG chief financial officer, takes over from McCall as interim chief executive on 1 July.

 To contact the MediaGuardian news desk email editor@mediatheguardian.com or phone 020 3353 3857. For all other inquiries please call the main Guardian switchboard on 020 3353 2000.