Guardian breaks even helped by success of supporter strategy
The Guardian and the Observer have broken even for the first time in recent history aided by record online traffic, reduced costs and increased financial contributions from readers.
Guardian News & Media recorded an £800,000 operating profit for the 2018-19 financial year – compared with a £57m loss three years previously – ensuring the business is existing on a sustainable basis following the culmination of a turnaround programme put in place following years of substantial losses.
The company said it had 655,000 regular monthly supporters across both print and digital, with a further 300,000 people making one-off contributions in the last year alone.
The Guardian has taken the decision to keep its journalism outside a paywall, while asking readers to contribute in order to subsidise its reporting into topics such as Cambridge Analytica, the Windrush scandal, and the Paradise Papers.
Total monthly page views increased over the last three years from 790m in January 2016 to 1.35bn in March 2019.
Katharine Viner, the Guardian News & Media editor-in-chief, 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.”
Total revenues at Guardian News & Media grew 3% to £223m a year, at a time when many rival publishers are experiencing substantial declines, with 55% of the company’s income coming from digital activities – a higher proportion than most other British news outlets.
Print advertising – once the bedrock of all newspaper income - accounts for 8% of the company’s total revenue, although the business remains committed to producing a print newspaper and has 110,000 print subscribers across the Guardian, Observer and Guardian Weekly.
The company has also reduced costs by 20% over the last three years, with expenditure before exceptional items in 2018-19 falling to £222m, aided by a reduction in headcount. The company said revenues at Guardian US and Guardian Australia have increased substantially, with both outlets considered to be financially sustainable.
Preliminary figures showing the company broke even on an EBITDA basis (earnings before interest, tax, depreciation and amortisation) were released by the company on Wednesday, with the full accounts to be published later this year.
Guardian News & Media is owned by the wider Guardian Media Group, which in turn is controlled by the notfor-profit Scott Trust, named after the newspaper’s former proprietors.
The Scott Trust endowment, built up through the sale of former assets such as AutoTrader, produces an annual return of between £25m and £30m without depleting the main investment, which it allows to be spent by Guardian Media Group to subsidise ongoing operations.
David Pemsel, the Guardian Media Group chief executive, said this target was reached after reducing annual cash outflows at the wider business from £86m a year in 2016 to £29m.
He 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.”