The Guardian has told its staff it is likely to burn through £90m of cash during the current financial year as the loss making newspaper group continues with a three year restructuring programme.
In a series of meetings at its King’s Cross base in London, Guardian Media Group’s (GMG) chief executive David Pemsel warned journalists to expect more difficult times in the coming months as he attempts to turn around the loss making newspaper company. The news was first reported by the Telegraph on Wednesday.
A source for the group told the FT that losses before interest, tax, depreciation and amortisation (EBITDA) were around £35m for the nine months to the end of December 2016 — a £10m reduction compared to the same period last year.
But the source added that negative cash flow by the end of December was £60m and is forecast to hit £90m by the end of the current financial year at the end of March. That is roughly the same rate of negative cash flow in 2015 when the group posted an operating loss of £69m and a pre-tax loss of £173m.
GMG is one year into a three year restructuring plan which has already seen the announcement of 250 redundancies in the UK and a reduction in its US staff from 140 to 100.
Last week it emerged that the publisher of the Guardian and Observer was considering moving the papers from their distinctive Berliner formats to a tabloid to further reduce costs.
In common with all UK newspaper groups, GMG has been hit hard by the slow down in print advertising revenues and the increasing dominance of tech groups Google and Facebook who scoop the majority of new digital advertising revenues.