Underlying losses at the Guardian and Observer publisher Guardian News & Media are expected to remain flat at about £20m for the 2015 financial year, as investment in editorial and commercial operations offsets growing digital revenues.
Revenues are expected to increase 3% to £215m at GNM parent company Guardian Media Group, owner of Guardian News & Media which publishes the two newspapers, according to a trading update covering the year to 29 March.
A 20% increase in digital sales over the year has more than compensated for declines in print circulation and advertising.
The GNM editor-in-chief, Alan Rusbridger, said: “Thanks to our balance sheet transformation, we can look forward to a period of targeted investment in the world-class journalism, digital excellence and increasingly international readership that is now the hallmark of the Guardian.”
Andrew Miller, the GMG chief executive, said further investment in new products and international expansion is likely to mean greater losses in the future.
He said: “You’ll see the losses increase over the next four or five years as the revenue lags behind. We’re investing in more mobile-facing products, more video-formatted content which is expensive, and more international growth, particularly in America.”
The Guardian has cash reserves of more than £800m, about £600m of which comes the sale of its 51.1% stake in Trader Media Group early last year. The company retains a 32.9% stake in business media company Top Right Group.
GMG is owned by the Scott Trust, which is tasked with ensuring the survival of the Guardian in perpetuity.
Miller said: “In very high level terms, we have more than £1bn worth of assets, of which £800m is cash, and we have underlying losses running at a level of £20m-odd right now.
“The judgment is we’ll take a chunk of that £1bn and reinvest it over four to five years to bring revenue back in, but it’s a constant refining.”
The Guardian has invested heavily in its US operation, first in building an editorial team in New York, and more recently in commercial staff to sell advertising aimed at a US audience.
The US audience has grown by 37% over the last year and now accounts for a greater proportion of the Guardian’s more than 120 million unique browsers a month than the UK.
“[The Guardian in] America journalistically did fantastic work over the last few years, it’s really working now economically too,” said Miller. “We’re doing 120 million global uniques now a month, that is definitely equal to the New York Times. What we’ve now got to do is take that reach and build the engagement and loyalty and monetise it.”
The Guardian has also launched in Australia in partnership with internet entrepreneur Graeme Wood, and Miller says further expansion globally is under discussion.
He said: “The primary decision about where we go next internationally sits with the new editor. [It could be] India like every other media company, sub-Saharan Africa, even Canada which now has a very similar political situation to Australia which could be interesting for us.”
Both Rusbridger and Miller are standing down this summer.