The Guardian Media Group made a pre-tax profit of £31m for 2018/19, up from a pre-tax loss of £25m the year before, it has reported.
But Guardian News and Media, the group’s publishing arm which produces the Guardian and Observer newspapers, made a £7m loss (EBITDA) for the 12 months to the end of March 2019.
This rises to £0.8m before exceptional items and it is on this basis that the publisher has claimed to have broken even after a three-year strategy to turn its finances around.
GMG reported cash outflow of £28m for 2019 which was covered by investment income from owner the Scott Trust’s endowment fund (this compares with the £34.4m GMG spent in 2018).
The overall value of the endowment fund stood at £1.014bn at the end of the year, compared with £1.005bn at the end of 2018.
It made a return of approximately £45m in 2018/19, which counts toward group profit figures.
GMG said this put it in a “sustainable position”.
It added: “The target is to ensure the adjusted net operating cash flow does not exceed the expected £25-30m average real returns that the endowment fund is expected to generate over the long term.”
Overall group revenue is £224.5m for 2018/19, all of it generated by GNM, up from £217m the year before. Digital revenue accounted for more than half of this at £125m. Eighty per cent of group advertising revenues are from digital.
Guardian Media Group chief executive David Pemsel said: “Achieving a third successive year of revenue growth and meeting our break even target for GNM is a tribute to everyone within our organisation.
“GNM has been transformed in the last three years into a more reader-funded, more digital and more international business.
“Going forward we have a clear strategy and a set of strengths which will help ensure the Guardian’s sustainability despite the ongoing challenges in the global media sector.”
The group is targeting 2m paid supporters by 2022 and financial sustainability in its new three-year strategy.
Picture: Graeme Robertson