Annual Report and Financial Statements 2012 1
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GMG plc AnnualGMG plc Report and Accounts 2012 Guardian Media Group plc 2012 ANNUAL REPORT AND FINANCIAL STATEMENTS Financial performance Revenue (£m)1, 2 EBITA (before exceptional items) (£m) 3 (Including share of Trader Media Group and Top Right Group (formerly Emap)) 12 254.4 466.7 12 48.4 11 255.1 466.1 11 49.6 10 280.0 476.2 10 37.7 09 310.9 543.4 09 35.8 08 381.6 505.2 08 52.8 (Loss)/profit before taxation (£m) Cash and investment fund (£m) 9 4 (75.6) 12 12 225.8 5 10 11 9.0 11 197.4 (171.0) 106 10 260.8 (96.7) 097 09 267.7 8 11 08 306.4 08 577.5 Debt (net of issue costs) (£m) Net assets (£m) 12 58.7 12 511.9 11 64.9 11 592.0 10 72.5 10 585.9 09 79.6 09 753.9 08 65.9 08 836.3 1 Revenue for 2008 and 2009 has been restated to exclude GMG Regional 7 Includes £24.4 million of fair value losses on forward exchange contracts, Media which became a discontinued operation in 2010. £27.2 million of joint venture fair value losses on interest rate swaps and 2 The dotted lines in 2008 depict Group revenue including share of joint debt, and £26.4 million of subsidiary and associate company impairment venture company Trader Media Group. The dotted lines in 2009 to 2012 of goodwill and other intangibles. depict Group revenue including share of joint venture companies Trader 8 Includes an exceptional gain of £335.2 million broadly in respect of the Media Group and Top Right Group (formerly Emap). profit on disposal of 49.9% of Trader Media Group in June 2007. 3 In 2008 EBITA before exceptional items includes share of joint venture 9 Cash and investment fund balances increased by £28.4 million. Further company Trader Media Group. In 2009 to 2012 EBITA before exceptional details are shown in the consolidated statement of cash flows on page 40 items includes share of joint venture companies Trader Media Group and in note 9 on pages 54 and 55. and Top Right Group (formerly Emap). EBITA is defined as operating 10 Cash and investment fund balances reduced by £63.4 million which profit before exceptional items and amortisation of intangible assets. includes non-operating cash outflows in respect of provisions of £22.6 A reconciliation to statutory operating profit is included on pages 22 and 23. million and settlement of a loan to a joint venture of £10.8 million. Further 4 Includes £54.2 million of subsidiary impairment of goodwill and details are shown in the consolidated statement of cash flows on page 40 intangibles, and £10.5 million of restructuring costs. and in note 9 on pages 54 and 55. 5 Includes exceptional costs of £4.1 million in respect of restructuring. 11 Group cash balance at 30 March 2008, reflecting the proceeds of the sale 6 Includes £160.4 million of subsidiary and joint venture company of 49.9% of Trader Media Group in June 2007. In early 2008/09, deferred impairment of goodwill and intangibles, £5.4 million of fair value gains consideration in respect of the Top Right Group (formerly Emap) transaction on forward exchange contracts and £5.1 million of joint venture fair value of £209.0 million was paid. losses on interest rate swaps and debt. GMG Annual Report and Financial Statements 2012 1 1 Introduction Introduction 2 Statement from the chair 4 CEO’s review of operations 10 Our highlights Guardian Media Group (GMG) is the 16 GMG board of directors 18 Statement from the chair parent company of Guardian News of The Scott Trust Limited 20 The Scott Trust Limited board & Media (GNM), publisher of guardian.co.uk, of directors 22 Financial review one of the world’s leading news websites, 26 Corporate governance 31 Report of the directors as well as guardiannews.com and 33 Directors’ remuneration report 37 Independent auditors’ report the Guardian and Observer newspapers. 38 Consolidated income statement 38 Consolidated statement of comprehensive income GMG’s sole shareholder is The Scott Trust 39 Consolidated balance sheet 40 Consolidated statement of changes Limited, whose core purpose is to secure in equity 40 Consolidated statement of cash fl ows the fi nancial and editorial independence 41 Notes relating to the fi nancial statements 71 Company fi nancial statements of of the Guardian in perpetuity. Guardian Media Group plc 84 Advisers The Group has a portfolio of investments which help to fund its journalism and secure its long-term future. The events that have shaped our year Explore some of the highlights that have helped make this another incredible year for our core business, Guardian News & Media April 2011 In collaboration with the New York Times, the Guardian publishes a selection of 750 leaked US military fi les on detainees in Guantánamo Bay 2 GMG Annual Report and Financial Statements 2012 Statement from the chair Dame Amelia Fawcett DBE “The prize is a secure future for the Guardian’s journalism.” Dame Amelia Fawcett DBE April 2011 May 2011 The Guardian’s work guardian.co.uk with WikiLeaks earns records over 50 it the accolade of ‘2011 million monthly Newspaper of the Year’ unique browsers at the British Press for the fi rst time Awards May 2011 The Guardian celebrates its 190th anniversary with a series celebrating key moments from the newspaper’s history +50m GMG Annual Report and Financial Statements 2012 3 At Guardian Media Group (GMG), secur ing a sustainable As a Board, we are indebted to those who serve us. On 30 June 2012, future for quality journalism has been our number one Stuart Taylor and Phil Boardman will leave the Group. priority during the last year. Following the sale of our radio assets to Global Radio after the end It is, by any measure, a stretching task. Media organisations across of the fi nancial year, Stuart Taylor stepped down as chief executive the world are struggling to match growth in digital audiences with of GMG Radio, and on 30 June 2012 steps down from his position on growth in digital revenues. the GMG Board following 23 years of committed service to the Group. The Board fully supports the strategy and transformation We would like to thank Stuart for his contribution over the years and programme of our core business, Guardian News & Media (GNM), to wish him the very best for the future. which chief executive offi cer Andrew Miller and his team are Phil Boardman leaves his position as company secretary and deputy implementing with great skill and determination. group fi nance director after 11 years of loyal service. On behalf of the It is early days but GNM is meeting its targets. Digital revenue growth Board I would like to thank Phil for everything he has done for the is as we forecast, and for the fi rst time has largely off set declines Group. He goes with our best wishes. in print revenue – a signifi cant milestone. The increase in GNM’s We welcome Philip Tranter, formerly a partner at law fi rm operating loss is in line with our projections and refl ects planned Boyes Turner, into the role of company secretary. investments. These critical investments have been made possible We are fortunate at GMG, GNM, the Guardian and The Observer through the headroom provided by large-scale savings. to have exceptionally talented, passionate and dedicated people. This gives us great confi dence that GNM will meet its target of Their support, engagement and goodwill will continue to be critical reducing losses to a sustainable level over a fi ve year period. as we navigate the challenges and exploit the opportunities of these Achieving this goal will require a huge collective eff ort from everyone ever more rapidly changing times. across the whole of GMG. Diffi cult decisions will need to be made and major changes implemented. The next few years will be very challenging and we will need to be ready to revise our plans should economic and market conditions worsen. The prize is a secure future for the Guardian’s journalism, Dame Amelia Fawcett DBE and there can be no better illustration of how important that Chair, Guardian Media Group is than the extraordinary editorial achievements of the past year. Our journalistic output has never been better or as widely consumed, something of which everyone across the Group can be proud. “Digital revenue growth … for the fi rst time has largely off set declines in print revenue.” Dame Amelia Fawcett DBE June 2011 July 2011 Guardian News & Media A Guardian exclusive exposes announces plans to the depth of phone hacking at be a ‘digital-fi rst’ news the News of the World organisation July 2011 The Guardian and The Observer launch a Kindle edition containing the most popular content from both papers, optimised for the best reading experience on the device 4 GMG Annual Report and Financial Statements 2012 CEO’s review of operations Andrew Miller “At the heart of the strategy is the Guardian’s uniquely open journalism.” August 2011 The Guardian’s unrivalled guardiannews.com combination of live and in-depth coverage of the English riots drove website readership to a record high September 2011 September 2011 The Guardian launches a free A new US homepage – Android app, supported by guardiannews.com – is advertising, featuring all the unveiled as the Guardian best content and latest news in America launches a new from guardian.co.uk digital-only operation GMG Annual Report and Financial Statements 2012 5 It has, by any standards, been a remarkable year for GMG.