The Sun posts £68m loss as it pays out £27m in legal costs over phone-hacking scandal

The Sun: full-year revenue increased slightly
The Sun: full-year revenue increased slightly

Performance marks improvement on 2018's £91.2m loss.

The owner of The Sun and The Sun on Sunday made a loss of £68m during the 2019 financial year as it continues to be hit by the fallout from the phone-hacking scandal, forking out £26.7m in legal fees and damages.

However, revenue at News Group Newspapers for the 52 weeks ending 30 June 2019 were up, with total turnover growing to £420m in 2019 from £401.4m in 2018

Circulation of The Sun was down to 1.38 million last year from 1.51 million in 2018, and fell to 1.16 million from 1.28 million for The Sun on Sunday.

The company's payouts to claimants nearly doubled in 2019 compared with 2018, when they totalled £14.7m. Meanwhile, costs "in relation to UK newspaper matters" and related to the company’s "management and standards committee" brought "operating one-off charges" of up to £54m in 2019, compared with £46.3m in 2018.

News Group Newspapers said that "following allegations of voicemail interception and inappropriate payments to public officials", there have been "a number of civil cases brought against the company, most of which have been settled or are in the process of being settled". It added that the final bill may be "significantly higher".

The phone-hacking scandal culminated in the closure of the News of the World in 2011 after it was discovered that reporters had been listening to voicemail messages of celebrities, as well as hacking the phone of murdered teenager Milly Dowler. Last year, the Duke of Sussex launched proceedings against The Sun's owner as well as Daily Mirror proprietor Reach.

Elsewhere in the results, sales and marketing costs hit £66.4m and administrative expenses were £100.3m. In 2018, the company made a loss before tax of £91.2m.

Sister brand The Times appears to be benefiting from its online paywall model. In accounts filed for the year ending 30 June 2019, Times Newspapers saw turnover rise to £330.3m from £326.4m in 2018, while earnings before interest, tax depreciation and amortisation fell to £12.3m in 2019 from £17.1m in 2018.

Although digital sales were booming, print circulation was consistent with the overall market in its downward trajectory. The Sunday Times' circulation fell to 713,000 last year from 748,000 in 2018 and The Times to 414,000 from 440,000 in the same period.

Pre-tax profit was down to £3.8m in 2019 from £9.6m in 2018, with operating profit falling to £6.1m from £11.9m. Gross profit suffered less of a severe decline (to £108.1m from £114.1m).

Earlier this month, The Sun’s strong digital performance helped mitigate a fall in News Corp’s ad revenue for the three months ending 31 December 2019.

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