NEWS 

Guardian announces outcome of three year turnaround strategy

Guardian Media Group yesterday announced the successful completion of its three year turnaround strategy launched by editor-in-chief Katharine Viner and CEO David Pemsel in January 2016.

Guardian announces outcome of three year turnaround strategy
Katharine Viner: “We have reached an important financial milestone.”

GMG says it has achieved its key financial goal for its core news business, Guardian News & Media (GNM), to break even at an EBITDA operating level, with profits of £0.8 million. GNM EBITDA losses were £19m in 2017/18, and £57m in 2015/16.

GMG’s cashflow for the year is (£29)m, reduced from (£36)m in 2017/18 and (£86)m in 2015/16. At this level, GMG’s cash requirements are financially sustainable, falling within the expected long-term annual returns of the Scott Trust Endowment Fund.

The Guardian’s ‘relationship strategy’ was launched in January 2016 with a goal of creating deeper relationships with readers, increasing reader revenues, and reducing overall costs by 20%. The financial goal of the strategy was for GNM to break even at operating EBITDA level for year ending April 2019.

Guardian News and Media editor-in-chief Katharine Viner said: “In times of extraordinary political and economic upheaval the need for quality, independent reporting and commentary has never been greater. Guardian journalism is flourishing - holding the powerful to account and exploring new ideas.

“Thanks to the support of our readers and the incredible hard work and talent of Guardian staff, we have reached an important financial milestone. We are now in a sustainable position, and better able to deliver on our purpose by producing outstanding journalism that understands and illuminates our times.”

Guardian Media Group chief executive David Pemsel said: “Over the last three years we have made a huge amount of progress, and I’m exceptionally proud of how far we’ve come. Achieving these results is testament to the absolute commitment and ingenuity of everyone within the organisation. We are very grateful for the support of our readers, advertisers and partners who believe in the value of high quality media.

“GMG is now a more reader-funded, more digital, more international business. Although the significant turbulence in the global media sector shows no sign of abating any time soon, we have developed a set of core strengths which will help to ensure the Guardian’s ongoing independence and financial sustainability for the long term.”

GMG’s full audited financial results will be published in July 2019 as normal. A summary of key preliminary 2018/19 results is as follows:

  • GNM’s revenues increased for a third successive year, with 2018/19 revenues of £223million, compared to £217m in 2017/18. GNM’s revenues are at their highest for a decade.
  • GNM’s costs before exceptional items in 2018/19 were £222m, compared to £235m in 2017/18.
  • GMG has achieved its key financial goal for its core news business, Guardian News & Media (GNM), to break even at an EBITDA operating level, with profits of £0.8 million. GNM EBITDA losses were £19m in 2017/18, and £57m in 2015/16.
  • GMG is now a majority digital business with £123 million of digital revenues in 2018/19 (2017/18: £108.6m) coming from several digital streams including digital advertising, digital subscriptions and reader contributions. Digital revenues now make up 55% of GMG’s total revenues, compared to 50% in 2017/18 and 40% in 2015/16.
  • In 2015 the Guardian had 12,000 members and 175,000 print and digital subscriptions. At the end of 2018/19, the Guardian has over 655,000 regular supporters, comprised of:
  1. 365,000 recurring contributors and members.
  2. Digital subscriptions across the Guardian’s premium app and tablet editions stand at 190,000.
  3. Print subscriptions to the Guardian, the Observer and Guardian Weekly are at a record high of 110,000 in total.
  4. In addition, in 2018/19 the Guardian received over 340,000 one-off contributions from more than 300,000 contributors.
  • Advertising revenue has remained resilient in a challenging environment, with good growth in digital advertising. Advertising revenues grew by 3% in 2018/19. Print advertising now represents less than 8% of total GNM revenues.
  • Guardian US and Guardian Australia have continued to find growing and loyal audiences in their markets. Both businesses are now financially sustainable in their own right, and have seen double-digit revenue growth in 2018/19. GMG’s international revenues have more than doubled since 2015/16 and GMG says it expects continued international growth in the year ahead.

In April 2019, Katharine Viner and David Pemsel announced the Guardian’s new three year strategy.

The key goals of the strategy are:

  • Two million supporters who financially contribute to the Guardian through regular or one-off payments or subscriptions by 2022
  • Financial sustainability by ensuring cash requirements remain in line with the expected long-term annual returns of the Scott Trust Endowment Fund of £25-30m.