Guardian: 'Journalistic success but losses up'

Guardian News & Media, publisher of the Guardian and the Observer, has had another challenging year financially with a sharp fall in recruitment advertising and has reported an operating loss of £38.3 million, compared to £37.8 million in 2010, for the year to April 3.

Revenue declined from £221.0 million to £198.2 million.

The company says it achieved savings of £26.8 million from restructuring in the previous year. While display advertising revenues were resilient, the Guardian saw a sharp decline in recruitment advertising as a result of the difficult economic environment and unprecedented cuts to public sector spending.

It adds that digital revenues were robust, but did not offset the decline in print revenues.

Andrew Miller, chief executive officer of the Guardian Media Group, said: “The year under review was one of huge journalistic success. The Guardian achieved record audiences, it was named Newspaper of the Year at the British Press Awards, the partnership with Wikileaks produced one of the greatest scoops in living memory, and the shockwaves triggered by the dogged pursuit of the phone-hacking scandal will be felt for generations to come.

“However, the entire media industry faces serious challenges. The Guardian has been at the forefront of innovation in our sector, but the task of reflecting editorial and brand success in a sustainable financial model for the digital age is a demanding one.

“In this context we have begun to implement a new strategy, including a restructuring of senior management, a new approach to managing our portfolio of investments and the transformation of our core business GNM into a digital-first organisation.

“At GNM we are building a culture, organisational structure and business model that will support our journalistic ambitions and responsibilities for many years to come. While reshaping the cost base will be a critical element of the strategy, we will also invest further and draw upon our resources in order to achieve this transformation.

"This will have an impact on GNM’s profit performance and on our cash position in the short term, including in the current financial year.

“We are only at the beginning of our new strategy, but I am determined that we will carry through the changes necessary to fulfil our primary function: securing the financial and editorial independence of the Guardian.”

• Guardian Media Group Annual Review 2011