Provided Guardian News & Media’s revenues continue to stabilise, losses are forecast to fall in the current financial year after a round of cost cutting, outgoing chief executive Carolyn McCall told GNM staff today at a series of internal briefings.

McCall, who is leaving GMG to join EasyJet as chief executive at the end of June, said the company’s pre-tax loss grew year on year because of a writedown of its investment in trade magazine, information and events business Emap. GMG bought Emap in partnership with Apax Partners in December 2007 for about £1bn and runs the business as a joint venture with the private equity firm.

Despite the writedown, McCall said that business publishing group Emap was still generating a large operating profit.

GMG’s annual results for 2009/10, to be published in July, will also be adversely affected by a reduction in the book value of GMG Radio and Manchester Evening News publisher GMG Regional Media, which was sold to Trinity Mirror (LSE: TNI) earlier this year.

In 2008/09 GMG made a pre-tax loss of nearly £90m and GNM, which publishes the Guardian, the Observer and guardian.co.uk, the website network which includes MediaGuardian.co.uk, an operating loss of £36.8m.

McCall said GNM’s costs had been cut by £26.2m. She added that GMG has more than £260m in cash and investment, a decline of less than 3% year-on-year.

The GNM managing director, Tim Brooks, said that cost savings – including a 10% cut in senior management – mean that the national newspaper arm of GMG is no longer losing £100,000 a day, as it was last autumn.

Brooks added that GNM cut its costs by 9% in the last financial year, while revenue declined 13%. GNM is in the process of cutting its workforce by more than 100, with voluntary redundancies in editorial and further job cuts in commercial.

McCall said that Times Newspapers, which publishes the Times and Sunday Times, recently revealed that its losses are now £240,000 per day.

Content from the Times and Sunday Times is about to go behind a web paywall in a bid to stem the newspapers’ losses and plans to cut the editorial budgets of both papers by 10% were announced earlier this month.

The Guardian editor-in-chief, Alan Rusbridger, told GNM staff different newspaper groups would approach the issue of charging for online content in different ways.

“We are not ruling out paywalls in a fundamentalist way. We cannot make much financial sense for us out of doing it now,” Rusbridger said.

He added that GNM would continue to pursue a policy of engagement, collaboration and mutualisation on the web.
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