The Sun reports £62.8m pre-tax loss

The Sun has reported a £62.8m loss in pre-tax profit in 2016 because of a fall in ad revenue and restructuring costs.

In accounts filed this week by parent company News Group, turnover fell 2.3% year on year from £456.8m from July 2014 to June 2015 to £446.4m in the 12 months to 3 July 2016. But gross profit increased 3.6% to £166.9m over the same period.

In the accounts it said: "The main driver of this decline [in turnover] was the challenging market conditions for newspaper print advertising with double digit declines currently common across the industry.

"The print advertising revenue decline offset the growth in both print circulation, supported by an increase in the Monday to Friday cover price during the year, and the excellent digital advertising growth, following the removal of the paywall for The Sun website."

Much of News Group's operating loss of £49.0m was due to £30.3m of "operating one-off charges", which included a £5.2m relating to the phone hacking allegations. In 2014/5, News Group paid out £4.3m for this.

News Group also reported another £14.8m in restructuring costs related to staff redundancy payouts, compared to £7.8m last year. 

Meanwhile, News UK stablemate Times Newspapers, which consists of The Times and The Sunday Times, reported a £5.0m loss before tax. In 2015, it made a pre-tax profit of £8.8m.

Turnover declined slightly by 0.3% to £341.7m, and gross profit dropped 13.3% to £112.2m.

Earnings before interest, tax, depreciation and amortisation fell 86.8% year on year to £1.5m. Times Newspapers attributed its reduced EBITDA to increased restructuring costs combined with decreased revenues and additional expenses relating to its expanding circulations.

Times Newspapers also explained changes in the market led to a drop in print ad revenue. The report said: "Turnover declined in the year driven by print advertising consistent with the overall industry which continues to suffer primarily from advertisers shifting spend from print to digital.

"The declines in print advertising revenue offset the solid performance in the other areas of the business, notably print circulations and digital subscriptions."

Times Newspapers took a £13.8m hit in redundancy payouts – compared with £7.4m in 2015.

Together News Group and Times Newspapers spent £28.6m in restructuring costs over the year reported. 

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