Guardian News and Media will not make a profit for at least the next two years because of the advertising downturn, Guardian Media Group chief executive Carolyn McCall has said.

The full GMG annual report is now available on the group’s website (PDF). It shows that GMG made a £97.7m pretax profit in the year to April 2007, on sales of £716m. But within that, Guardian News & Media – the national newspapers division which publishes The Guardian, Observer and Guardian.co.uk – made a loss of £14.3m. Its regional newspaper division had pre-tax profits of £22.7 million.

In an interview with the Sunday Times, McCall said profitability was “not the number one reason” for operating the Guardian and Observer publisher.