Telegraph Media Group has posted a record loss of £244.6m in 2023, despite a 35% rise in operating profit.
In its statement released on its 2023 results, the company said the loss was the result of “booking a provision of £277.6m against amounts due from parent TMG”. In accounting, a provision is a liability – i.e. a debt – whose timing and amount are uncertain.
The company said a “detailed historical review” of TMG, carried out as part of the Telegraph sale process, “identified potential irregularities” in transactions between the group and other parts of the Barclay empire.
“Although there have been no changes to the recorded assets and liabilities, there is a potential risk of future possible repayment claims against the Company and the Group in relation to these transactions,” the company said.
Telegraph Media Group’s turnover rose by £13.8m to £268m, an increase of 5.4%. Operating profit excluding exceptional items – including a £277.6m provision – rose from £40.1m to £54.2m, an increase of 35.2%.
The company said the growth was “driven by growth in digital advertising and digital subscription revenues.”
Content from our partners
TMG did not disclose its revenue from print subscriptions, print advertising or newsstand sales, but said growth in digital sales “significantly outpaces the decline in print”.
The total number of subscribers continued to grow after the announcement in August that the company passed the one million subscriber mark. TMG ended 2023 with 1,035,710 subscriptions, including more than 200,000 that were added with the acquisition of Chelsea Magazine Company.
TMG chief executive Anna Jones said: “Against the backdrop of uncertainty surrounding its future ownership, the business continues to excel…
“Our quality journalism continues to drive the success of our business and support its underlying financial health…
“As we look forward, we will continue to invest in growing our audience and developing our products, specifically in audio and apps, to best serve our dedicated subscriber community and ensure continued growth through 2024 and beyond.”
The company’s report did not elaborate on the “potential irregularities”, but The Telegraph’s own story on TMG’s results said the financial “black hole” was the result of “loans raised by the Barclay family which are unlikely to ever be repaid”.
It said the loans included “more than £200m raised as loans for annual sums in the tens of millions” and attempts to trace the money through Barclays’ notoriously complex web of businesses were unsuccessful.
The Telegraph reports that specialists from HMRC and the National Crime Agency have been in contact with TMG and that “potential future claims against the company” mentioned in the annual statement “include potential claims of tax fraud by HMRC and a potential claim by current directors against previous directors”.
The paper also said that consultancy and other fees associated with the sale of The Telegraph cost the business around £22m, of which £10m was paid to Goldman Sachs to prepare the auction process which ultimately short-circuited Redbird IMI.
By email pged@pressgazette.co.uk point out errors, provide story tips, or submit a letter for publication on our “Letters Page” blog.