According to Guardian Media Group (GMG):
Summary
* Revenues of £217.0m, up 1% on prior year (2017: £214.5m), supported by good growth in reader revenues and international
* Costs before exceptional items of £240.1m, 7% lower than prior year (2017: £259.2m)
* Digital revenues of £108.6m, up 15% on prior year (2017: £94.1m). Digital now makes up over 50% of revenues
* The Guardian's news and media operations, GNM, had EBITDA before exceptional items of £18.6m loss, 52% lower than prior year (2017: £38.9m)
* GMG EBITDA before exceptional items £23.1m loss, 48% lower than prior year (2017: £44.7m loss)
* Total value of endowment and cash holdings of £1.01 billion (2017: £1.03 bn)
GMG has continued to implement the three-year plan launched by David Pemsel, CEO of GMG and Katharine Viner, editor-in-chief of Guardian News & Media, in 2016. The plan aims to:
* address the balance of costs and revenues at Guardian Media Group, focusing on new revenue streams including reader revenues and international growth
* build a far deeper set of relationships with our audience
* reduce the Guardian's cost base by 20%
Financially, the target of the plan is for GMG's core news and media business (GNM) to break even at underlying EBITDA level by April 2019 in order to provide a sustainable future for the Guardian.
Over the course of the last two years, GNM's operating losses have been reduced by two thirds from £57m to £19m. GNM remains on track to break even by April 2019. With GNM at break-even in 2018/19, the cash requirement of GMG will fall in the range of £20-30m, within the expected long-term returns of the endowment fund.
Strategic progress
* Audience/readership: Guardian journalism had record digital reach and engagement with over 155m monthly unique browsers (2017: 140m), and over one billion page views per month. We also saw an increase in the number of regular readers.
* Reader relationships growth: GNM has continued to grow its base of regular paying supporters, members and subscribers to print and digital products. As of 30 June 2018, GNM has a total of 570,000 regular supporters across these categories, and has received an additional 375,000 one-off contributions in the past twelve months. More people are paying for Guardian journalism than ever before. Reader revenues represent more than half of GMG's total revenues.
* Solid advertising performance: Despite challenging trading conditions and advertising volatility, GMG's advertising business had a good competitive performance, with solid growth in digital advertising revenues. GMG continues to strengthen its advertising proposition.
* Cost management: GMG continued to manage costs across the organisation, reducing costs by £19.1m. Cost management initiatives to deliver this saving included the transition to tabloid, which will deliver further annualised savings in 2018/19.
* International growth: The Guardian's businesses in the US and Australia saw double-digit growth due to increased reader revenues and a good competitive performance in advertising revenues. We expect further international growth in the year ahead.
* Digital growth: Following growth in digital reader revenues and a good competitive performance in digital advertising, digital now accounts for over 50% of GMG's revenues. Digital revenue growth in 2017-18 exceeded declines in print revenues.
The Guardian is supported by the Scott Trust Endowment Fund. The value of the fund and other cash holdings stands at £1.01 billion (2017: £1.03bn). The decline in the value of these holdings reflects cash being transferred from the fund to meet operational cash outflows of GNM, partly offset by the underlying growth in investments.
In October 2017, GMG Ventures was established. This £42m venture capital fund is designed to contribute financial returns and to support GMG's strategy by investing in early stage businesses focused on developing the next generation of media technology.
David Pemsel, chief executive officer, Guardian Media Group, said: "In 2016 we set out a three year strategy based on building deeper reader relationships and getting GNM's finances to break even at operational level, in order to bring the organisation as a whole back to sustainability. The global media sector continues to face challenging conditions, but our strategy is on track to achieve our target and secure the future of the Guardian.
"We have grown our revenues for a second consecutive year and more people are paying for Guardian journalism than ever before. Thanks to the hard work of everyone at GMG, we are building a strong foundation in order to invest in some of the most trusted journalism in the world."
Neil Berkett, chair of GMG, said: "Thanks to a year of strong execution by the management team, these results represent another year of significant progress for GMG as we work towards sustainability. "The company has a well-established portfolio of investments, carries no debt and no material pensions deficits. GMG is on track to create a secure financial base from which to plan for the long-term future of the organisation - enabling us to continue to support world-class Guardian journalism in perpetuity."
