Guardian Media Group’s regional newspapers have achieved a £30m profit level for the first time, the group has announced.

A review of the financial year said its regional newspaper division, which publishes the Manchester Evening News and the Reading Evening Post, together with more than 40 other titles across Berkshire, Cheshire, Greater Manchester, Lancashire and Surrey, had seen a return to strong growth, with the help of tight cost constraints and an advertising recovery in the second half of the year which saw an increase in revenues of nearly six per cent.

Meanwhile there was mixed circulation success, with an upward trend in circulation growth maintained in the first half of the year. Circulation of both the daily evening newspapers and the southern based weeklies faltered towards the end of the year, though the northern weeklies continued their upward growth.

GMG chief executive Sir Bob Phillis, said: “GMG Regional Newspapers Division did not allow costs to accelerate in the 90s boom, so it was able to weather the subsequent downturn without any significant cost-cutting or redundancy programmes.”

The group also said that a new press at Reading, serving the southern titles, had already achieved the projected return on capital, with third-party revenue increasing significantly during the year, and a £3m investment is now being made in inserting and publishing equipment.

Progress has also been made in the planning of new all-colour printing facilities for its northern-based titles.

The division’s online revenue grew during the year by 39 per cent although overall Internet activities remained in loss.

As a whole the group, which also publishes national newspapers The Guardian and The Observer, saw pre-tax profits rise to £43.6m, with the acquisition of Trader Media Group in October having a marked effect on the results.

Total operating profit, excluding items such as intangibles, was £84.5m, compared with £38.4m in 2003.

GMG chief executive Sir Bob Phillis, said: It has been a period when GMG has emerged from a highly competitive period, stronger than before and with the editorial and financial security of The Guardian and The Observer transformed through the full acquisition of Trader Media Group.

“This brings to the Group a stable of magazines and websites valued at more than £1 billion, which in turn allows us to earmark a substantial sum of money to meet the longer-term needs of the Group as a whole.

“This development once again illustrates the value of our unique ownership, with the Scott Trust more focused on editorial independence and excellence than short-term profits or losses. We also owe much to all our staff for their professional expertise and dedication, as well as their commitment to the principles for which the organisation stands.

“Looking forward GMG is in a strong financial position. Opportunities for future growth in both the Regional Newspaper and Radio divisions will be identified and carefully evaluated in our efforts to ensure the long-term financial strength of the GMG Group.”

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