News Group Newspapers, publisher of The Sun titles, has reported a £201m pre-tax loss on turnover of £324m for the year to the end of June 2020.
Revenues are down nearly £100m on the year before (2019: £420m) at the group, which increased its pre-tax losses by more than £130m (2019: £67.8m), according to accounts filed with Companies House in the UK.
NGN is part of Rupert Murdoch’s News UK, which also publishes The Times (accounts filed as Times Newspapers), itself a subsidiary of News Corp, which owns the Wall Street Journal and Dow Jones.
NGN said its business had been “impacted by the ongoing Covid-19 outbreak and the resulting UK lockdown”, with newsstand sales of The Sun and The Sun on Sunday hit by lower levels of daily commuters.
It said the drop in turnover “was primarily due to challenging market conditions with declines in newspaper circulation and print advertising in line with other businesses in the sector and the wider economy”.
Following “changes in market conditions” NGN faced an £84m cash flow impairment, which has seen it write down the carrying value of The Sun titles to nil, down from £112m in 2019.
The group said it had seen a growth in online traffic and digital ad revenues, “driven by deeper engagement and new audiences turning to The Sun Online for reliable advice and entertainment during uncertain times”, which partly offset revenue decline elsewhere in the business.
The Sun’s Home News Delivery campaign “added a significant number of new customers during the outbreak”, the group said, and despite the challenges of the pandemic lockdown it “never missed an edition”.
Legal fees and damages paid out against claims of phone hacking at the now-defunct News of the World cost NGN £52.3m in 2020, nearly double the year before. Most of the claims have been settled out of court.
NGN had 50 fewer editorial employees on average in 2020 (546) compared with 2019 (605).
Picture: Reuters/Toby Melville