Online donations and jobs cuts help Guardian halve its losses

SHARP cost cuts and online appeals for donations by The Guardian helped it nearly halve operating losses as it battles to break even for the first time in two decades.

The publisher is now in the final year of a three-year plan to turn around its finances after years of heavy spending eroded its trust fund and raised questions over its long-term future.

Accounts for the second year, covering the 12 months to April, show that efforts to replace sliding print advertising and circulation income with voluntary contributions from readers online are delivering progress.

Turnover edged up 1pc to £217m despite the decline of print, as digital revenues rose 15pc to £108.6m. The Guardian said digital advertising sales increased, but most of the boost came from its appeals for donation.

In the year to the end of June there were 375,000 one-off donations of varying size and 570,000 regular contributors, including print and mobile app subscribers. Digital revenues from advertising and readers accounted for more than half of the total for the first time.

The stable revenues allowed The Guardian’s cost-cutting to bring it closer to break even. Excluding one-off costs such as redundancy payments, operating losses for Guardian Media Group, which include management fees on its £1bn trust fund, were £27.7m, down from £52.9m. More than 200 job cuts, around half of which were made in the newsroom, saved £10m. The decision to scrap The Guardian’s “Berliner” format presses and outsource printing of a new tabloid newspaper to the publisher of the Mirror also slashed spending.

Cash losses for the news operation excluding one-off items were £18.6m, compared with £38.9m in the prior year. A spokesman said the publisher expects to break even on this measure in the current year as it reaps more savings from its switch to tabloid format and does not replace staff who leave.

Guardian Media Group is still expected to burn up to £30m cash from its trust fund, but said the bill would be covered by the long-term returns on its investments.