Telegraph Media Group has revealed a sharp drop in profits helping to explain both the change of its chief executive and the introduction of a harder online paywall in November.
Operating profit for Telegraph Media Group is said to have dropped by a third for the year to the end of 2016 to £32.2m, from £48.3m in 2015.
Turnover dropped to £295.5m from £314.6m.
The news follows the announcement earlier this month that Murdoch MacLennan was stepping down after 13 years as Telegraph chief executive.
Last November the Telegraph adopted a new hard paywall, charging readers to view premium content online while keeping some articles free.
TMG’s profit drop is largely driven by a 12 per cent decline in advertising revenue.
Despite a growing overall UK advertising market last year, many news publishers saw their share of revenue decline as marketers spent their money instead with the likes of Google and Facebook.
The two US giants are currently hoovering up around 80 per cent of the growth in the UK advertising market.
TMG said that circulation revenues fell by 2.9 per cent last year but digital subscriptions were up 24 per cent.
Telegraph Events Ltd, a separate company, was said to have turnover of £7.8m and operating profit of £300,000.
TMG’s new chief executive Nick Hugh said: “Despite the challenging market conditions we have delivered a performance in line with expectations for 2016. The investment we are making in a more diversified business, with quality journalism at its heart, is making good
progress in positioning The Telegraph for the future.”
Despite last year’s profit drop, the Telegraph is more profitable that The Times and the heavily loss-making Guardian.