South recovery fails to halt GMG regional dip

Guardian Media Group (GMG) chief executive Carolyn McCall has said that her company’s regional newspapers in the south of England have started to see the benefits of a recovery in the economic climate.

This was despite GMG Regional Media suffering a dip in profits to £19.4m (from £21.6m last year) on turnover down to £122.2m from £126.8m in 2006. This was blamed on ‘challenging advertising market conditions”.

McCall said that the recovery was slower to move to GMG’s heartland in the north of England, but added that increased display advertising income was compensating for the large loss in paid-for circulation since the Manchester Evening News went part-free.

Overall, GMG’s operating profit was down from £116.4m in 2006 to £105.2m, with turnover up from £700.3m last year to £716m.

Pre-tax profit from continuing operations in the year to April 2007 rose from £66.4m in 2006 to £97.7m.

National newspapers division Guardian News and Media (GNM) reduced its operating loss before exceptional items to £15.9m, down from a loss of £19.3m in 2006, with an increase in turnover from £237.4m in 2006 to £245.7m.

McCall said that this was a good result in view of GMG’s overriding aim – as stipulated by the Scott Trust – to protect the journalism of The Guardian rather than to make profit.

Notwithstanding this, she said that it remained a company aim for The Guardian and The Observer to be run profitably.

GNM’s digital revenues, from both display and recruitment advertisers, grew 49 per cent year on year.

Trader Media Group, which includes Auto Trader magazine, delivered operating profit down from £119.5m in 2006 to £104.6m. GMG sold 49.9 per cent of the group to Apax Partners in March this year.

Although turnover at Trader Media was up three per cent to £312.5m, the profit dip was blamed on the cost of new acquisitions, start-ups and business restructuring.

McCall told Press Gazette that the money raised from selling part of Trader Media Group was still in the bank – and that the group was in no hurry to spend it, in view of the current high interest rates. But she said that GMG was looking to diversify its media interests.

GMG Radio’s operating profit was £3.5m, up from £2.7m in 2006. The statutory operating profit for the division saw a loss – down from £2.7m in 2006 to £1.9m – on a turnover that rose from £27.9m in 2006 to £35.7m.

Taking into account the recent acquisition of two regional Century FM stations in the North East and North West, total listening hours per week at the beginning of April 2007 were 46 million.

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