Guardian ‘set to post £173m loss’

THE owner of The Guardian newspaper is expected to post a £173million loss despite axing 270 jobs.

Figures due to be published tomorrow are set to reveal the company has struggled in an advertising downturn for newspapers while failing to increase earnings online.

The core business is to reveal an operating loss of £68.7million in the year to March, according to a message sent to senior executives seen by The Financial Times.

This is £10.1million worse than initially hoped. Guardian Media Group will also write down the value of its stake in magazine and events firm Ascential by £80million.

It owns 22.4 per cent of the FTSE 250 firm, which organises business leadership summits and runs a ‘trend authority’ for the fashion and creative sectors.

GMG had set the target of cutting 250 jobs but 270 UK staff applied for voluntary redundancy, including 70 journalists. Another 60 vacant positions will no longer be filled, meaning that its British workforce has been cut by 20 per cent in total.

The group was also hit by a £20million restructuring charge relating to laid-off staff.

Its finances have worsened sharply since Alan Rusbridger quit as editor last year when he was due to take over as chairman of the Scott Trust, GMG’s parent company.

However the plan was abandoned after a confrontation with new editor Katharine Viner over the future of the newspaper.

Mr Rusbridger had invested heavily in international and digital growth during his 20 years at the helm but there were fears that this has not led to a similar rise in profits.

When he revealed he would not be chairman in May, Mr Rusbridger said the Press had been ‘battered by turbulent economic forces that were difficult to foresee’.

Miss Viner is seeking to sign online readers up as members to support The Guardian’s journalism.

The company’s expansion was supported by £600million from selling its stake in the publisher of Auto Trader in 2014, which then went on to record a 19 per cent hike in profits to £171.3million last year.

This has raised questions over the wisdom of the sale.

The Guardian was contacted last night but declined to comment until the figures are issued tomorrow.