The London freesheet, which appointed George Osborne as its editor last year in a controversial move, had reported a pre-tax profit of £517,000 on flat sales of £71m a year ago.
It is the first time since 2013 that the Standard has not reported a profit in its annual accounts, published today by ESI Media for the 12 months to October 2017.
During the last financial year the Standard increased its circulation by 1 million, which pushed up overheads including disitribution by more than £1m to £12.9m. The paper has been free since 2009.
Meanwhile, its sister title, The Independent, has nearly doubled its profits (94%) to £3.26m in its first full year as a digital-only business. This growth was on the back of an increase in turnover by more than 55%.
ESI Media has said that its performance is a validation of the decision made in early 2016 to close the print edition.
The growth is credited to improved programmatic advertising efficiencies, an increase in third-party partnerships and ecommerce revenues with The Independent’s strong growth.
“The Independent is demonstrating strong growth in profits and turnover following its move to a digital-only business,” Manish Malhotra, group managing director, ESI Media, said. “This is enabling us to continually invest in the brand, particularly in our US presence, to better serve our large, engaged and valuable global audience.”
No mention was made, however, of the stake sold to a Saudi investor mid-last year, or if its impact on the newsbrand’s bottom line.
The Evening Standard, however, is impacted by “weak advertising trading conditions experienced by the entire print media industry” compounded by an increase in paper costs, despite the paper “substantially out-performing the market”, the media owner said in a statement.
Beyond that, the title has been making investments to develop the brand, editorial product and advertising proposition. This process has included investment into digital platforms, including senior hires in the editorial, commercial and technical teams, to improve user experience.
“We’re investing significantly in the Evening Standard, developing what is already the leading media product for one of the world’s great cities into a future-facing newsbrand that delivers editorially and
commercially across print, digital and live platforms,” Malhotra said. “Although the title has been subject to some broader issues that have impacted on all newsbrands, the brand is now enjoying strong digital growth and the emergence of a successful events business to complement the print title reinvigorated under George’s editorship.”
ESI Media’s TV business, London Live, has reduced its losses by 17% to £2.95m thanks to increasing revenue.