GMG's losses jump 77% to £171m as writedowns bite

Guardian Media Group's pre-tax losses increased 77 per cent to £171m in the year to the end of March.

Operating loss at Guardian News & Media, the division which publishes The Guardian and The Observer, increased to £37.8m.

Detailing its full-year results today, GMG attributed its increased pre-tax losses to an impairment charge against its investment in Emap, totalling £96.5m, and a further impairment of £63.9m on GMG Radio.

GMG has also written £47m off its books following the sale of its regional media division to Trinity Mirror.

Turnover at GMG fell to £476.2m from £543.4m it made in the same period the previous year, while its combined cash and investment fund stood firm at £260.8m,  just down on the previous year where the pot was £267.7m.

GNM's losses were a slight increase on the £33.7m lost the previous year despite cost savings of £26.2m over the period. Revenue at GNM fell by £32.6m in the 12 months to 28 March, while statutory operating losses before exceptional items at GNM were £37.8m, only a slight drop on the previous year's figure of £33.7m.

Parent company GMG said it expected losses at GNM to fall in the current financial year as a result of its on-going cost reduction programme.

GMG Regional Media, the regional publishing wing made up of 32 newspapers including the Manchester Evening News, incurred an operating loss of £0.1m, down from the £0.5 profit it made in the same period the previous year.

GMG sold GMG Regional Media to Trinity Mirror earlier this year for £7.4m cash and the release of a print contract valued at £37.4 million.

Despite the significant increase it its losses, Amelia Fawcett, chairman of GMG, said the group remained well positioned in terms of overall resources and general financial health.

"The pre-tax loss was driven primarily by non-cash adjustments relating to asset impairments, not cash outflow," she said.

"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 three per cent.

"The essence of our strategy in recent years has been to reduce risk by diversifying the group's portfolio, and to exchange short-term profit for financial security through investments from which we do not necessarily take an immediate return.

"Despite the impact of market conditions on current valuations across the industry, we continue to believe that a portfolio of assets enhances the long-term financial security of the group."

GMG said operating profits from its joint ventures in Trader Media Group and Emap remained strong despite difficult trading conditions.

Despite suffering the £96.5m impairment due to lower-than-expected profits, Emap has an underlying operating profit of £90.1m, down from the £98.2m in the same period the previous year.

Trader Media Group, which like Emap is jointly owned between GMG and investment group Apax, recorded operating profit before exceptional items of £104.8m, down from the £110.8m it made the previous year.

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