GMG's losses increase due to write-downs

Carolyn McCall, the outgoing chief executive of Guardian Media Group, said yesterday that company losses had increased significantly because of write-downs on its investments.

McCall, who is set to join EasyJet as its new chief executive in July, told staff in a series of briefings that pre-tax losses in the 12-months to March would be larger that the £90m loss made the previous year.

GMG has been forced to incur costs from the sell-off of its regional newspaper business and write-down investment in its radio stations and business publisher Emap, which it bought in partnership with investment firm Apax.

Apax and GMG paid almost £1.1 billion to buy Emap in March 2008. Just 12 months later, Apax wrote down the value of its investment to zero because of the recession.

Press Gazette understands that GMG’s write-down in Emap will be around £100m. GMG invested £300m plus debt when it took hold of the company.

McCall’s last major act as chief executive was to pull GMG out of local and regional newspaper journalism by selling its 32 newspapers to Trinity Mirror for £7.4m cash and the release from a £37m contract to print its papers at Trinity Mirror presses.

The move ended the Guardian’s near 130-year association with the Manchester Evening News.

A GMG spokesman confirmed to Press Gazette that losses for the financial year just finished would be bigger than the previous 12 months. The company will publish details in July.

The spokesman said operating losses at GMG had fallen over the period and that Guardian News & Media, the division that publishes the Guardian and the Observer, had reduced its costs by around £26m and was expecting underlying losses for 2009/2010 to be level with the previous year.

Provided that revenue continues to stabilise, GNM expects its losses to reduce throughout the 2010/2011 financial year.

GNM is now understood to be operating far below the £100,000 daily loss outlined by managing director Tim Brooks last autumn.

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