Lebedev Holdings, the company that publishes the Evening Standard and Independent titles, lost £24m in the last financial year, figures filed at Companies House have revealed.
In 2010 the company – controlled by Evgeny Lebedev but bankrolled by his father Alexander – posted a loss of £15m.
A directors’ statement accompanying the Lebedev Holding accounts blamed substantial newsprint price increases and the start-up costs associated with The Independent’s cut-price stable mate i in October 2010.
Figures for the year ending 2 October 2011 show the Independent papers, which includes The Independent on Sunday made a pre-tax loss of £18m, while the Standard posted losses of £9m.
The accounts show that in 2010 the paper lost £20m and its publisher is confident that in the year ahead the title will begin to break even. The company said it had ‘exceeded expectations’in 2011.
Pre-tax losses across Lebedev Holdings rose from £22m in 2010 to £27m in 2011, while revenue was up from £64m to £108m
‘Direct printing and newsprint costs have increased significantly due to a combination of substantial newsprint price increases, higher print runs to facilitate the increase in distribution and higher paginations resulting from increased advertising volumes,’the company said in its directors’ report.
‘However, the effect of these increased costs has been largely mitigated by the full-year effect of the major costs saving initiatives undertaken throughout the entire business in the previous year.”
It added: ‘The cost of launching i, as well as its ongoing operational costs, have resulted in an increase in costs compared to the previous year.
‘This increase in costs has been exacerbated by a substantial, market driven increase in newsprint sales since January 2011.
‘Despite a full year of i, it is anticipated that total costs will reduce over the next financial year as Independent Print Limited realises the benefits of integration with other group companies.”
Staff costs during the period rose 28 per cent to £36m, with its wage bill rising from £22m to £31m.