London’s free daily business newspaper City AM has postponed plans to expand to other cities including Manchester and Edinburgh until the economy “gets back to something like normal”.
Newly published accounts have revealed that the title made a loss of more than £1m last year, but City AM chief executive Jens Torpe has told Press Gazette that the company is now close to breaking even.
The title, which launched in September 2005, is handed out to about 100,000 City workers every morning.
City AM’s 2007 accounts, which were recently filed at Companies House, reveal a £1.8m loss in the 12 months to the end of December 2007.
The publisher’s total accumulated loss since the paper launched in 2005 hit £7m last year.
But Torpe said the £1.8m loss on the City AM balance sheet last year included ‘a lot of non-cash items’and, in real terms, the publisher’s 2007 pre-tax loss was in the region of £1m – down from about £3.5m in the previous year.
‘What you are looking at is effectively our second year in the market,’he told Press Gazette.
‘If you look at most newspapers in their second year, most newspapers would give their right arm to be in that territory.”
He said City AM’s revenues in 2008 so far were between 20 and 25 per cent up on last year, and the publisher was close to breaking even.
‘I’ve been involved in setting up a number of newspapers around the world,’said Torpe, a former chief operating officer at free newspaper giant Metro International.
‘For free newspapers in the first two or three years it’s a very good result. We were very happy with that. Even in a tough market, given the conditions, we’re quite satisfied.”
In October, City AM said it was planning to distribute up to 17,000 extra copies in Manchester and Edinburgh from early next year.
Torpe said that the plan was still on the agenda, but would not be going ahead until the advertising market – and economic conditions as a whole – recovered.
‘We had to judge the market conditions,’he said. ‘Since then the market has hardly moved upwards – there’s a lot of uncertainty. Most advertisers are pruning back.
‘In the present climate you’d be an absolute fool to invest heavily, unless you have a sovereign wealth fund behind you.
‘As soon as the market gets back to something like normal again we’re absolutely ready.”
Asked when that was likely to be, Torpe added: ‘Nobody really knows, nobody tries to say that they do know. It’s a big question mark.
‘There’s a big uncertainty at the moment. We hope that that uncertainty goes away.”
In June, City AM axed eight jobs in a move that has seen reporters file copy directly to a page without sub-editing.
Torpe said he was proud of the way the editorial staff on the title had reported on the ongoing economic crisis.
‘Whenever we go out and test it, we see that there are more and more readers and more awareness. We’re quite proud of the newspaper we are doing,’he said.
‘It’s a very [tough] time for advertising but journalistically it’s been a very interesting time. There’s so much going on in the US which has an impact on London. We’ve been at the forefront.”