Myners:"GMG in strong position"
Guardian Media Group’s pre-tax profits fell to £9.8m in 2001-2002 compared with £67m in same period last year.But turnover increased by 4 per cent to £456m and the group was able to fund losses in its national newspaper division from profits and cash flow from other parts of the group, said chairman Paul Myners.
"Guardian Media Group’s performance in its latest financial year highlights the underlying strengths of the organisation’s unique ownership structure", he said, in his annual statement for the year ended 31 March, 2002. He said the year had been challenging for the media and communications sector overall, adding: "This was a year which proved the resilience of the principles which have guided this organisation through its history and which have enabled us to emerge from a testing period in a strong position".
A contribution to profits came from the strength of the regional newspaper division and the 48 per cent shareholding in Trader Media Group – publisher of Autotrader – which "generated significant and welcome growth".
Following the acquisition of Scot FM for £25m in June 2001, GMG invested nearly £4m in developing the Real Radio Stations in South Wales, Scotland and Yorkshire during the year. Myners said all of this had been achieved while maintaining a strong net cash position of £164m and a small increase in net assets to £333m.
He continued: "In the prevailing economic and social climate, the philosophy of the Scott Trust, which owns GMG, was more relevant than ever, enabling the group to operate free from short-term concerns. "We exist so that our main titles, The Guardian and The Observer, can continue to set a standard of journalistic excellence in the public interest. They achieve this aim brilliantly. I believe their success is indicated not just by circulation, or advertising revenue, or even awards from their peers, but also, for example, by the way in which they have set the benchmark for new media brand extensions".
There was a significant investment of £33m in internet activities across the group which Myners said "coincided with the outstanding success of Guardian Unlimited, justifying GMG’s strategy of building new businesses in a wholly integrated way rather than as detached elements of the core organisation".
GMG chief executive Bob Phillis said the company had emerged "strongly from a testing year" which had seen "the enhancement of our main publications, the extended reach of our digital publishing capacity and the broadened base of our diverse media activities".
Commenting on the group’s outlook, Phillis said: "While we do not anticipate any significant upturn in the levels of advertising demand until the second half of the financial year, the start to the new year has been encouraging.
"GMG will be in a strong position to take advantage of any opportunities that might arise to strengthen our portfolio".
By Jean Morgan