Telegraph group suffers profit slump as ‘structural decline’ outweighs subscriber growth
The Telegraph has suffered a huge decline in pre-tax profit for the year, as a rise in subscriber numbers failed to counteract a “structural decline” in print revenue.
Telegraph Media Group (TMG) posted pre-tax profit of just £900,000 in 2018, a fall of 94 per cent on the previous year. Revenue also slipped three per cent to £271m.
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The media group blamed the earnings hit on “structural decline” across print advertising and circulation revenue, and said it is looking to refocus on online subscriptions.
TMG, which is approaching the halfway point of a three-year turnaround plan, now has more than 4,000 print and online subscribers.
“Despite the ongoing structural challenges in the industry, we will continue our investments in journalism and subscriptions, whilst improving our overall profit margins to continue our path towards a sustainable model, centred around our world-class centre-right journalism,” said chief executive Nick Hugh.
Hugh added that the decline in profit had been the result of increased investment in journalists. The company created 39 net new roles in 2018 and a further 37 this year as part of a £10m investment plan.
The Telegraph also rolled out its new website in August as it looks to double down on its digital offering.
But the latest financial figures, which were filed two weeks after the deadline, highlight the scale of the challenge faced by news publishers struggling to monetise their online output.
TMG has set a target of reaching 10m registered users and 1m subscribers by 2023 as it looks to convert readers into paying customers.
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The group’s troubles has sparked speculation that some of the Telegraph’s assets could be put up for sale, though the billionaire Barclay brothers, who bought the company for £665m in 2004, have said they have no intention of selling.
Ian Whittaker, media analyst at Liberum, has named Daily Mail and General Trust as a potential buyer, with a possible purchase price of between £200m and £300m.
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