(qlmbusinessnews.com Thurs. 20th June, 2024) London, UK —
Daily Telegraph Suffers Major Losses Due to Barclay Family Loan Issues
The media group owning the Daily Telegraph plunged into a significant loss last year after setting aside nearly £280m to cover loans made to the Barclay family, which are now deemed unlikely to be repaid.
Telegraph Media Group reported losses of £244.6m in 2023, a sharp decline from the previous year's profit of £33.3m. This downturn was primarily due to the provision for these loans.
According to the group's accounts, a £277.6m provision was allocated against amounts due from parent company undertakings, raising doubts about the recoverability of this balance due to the ongoing corporate transaction. The Telegraph's own website reported that these provisions stemmed from “loans extracted by the Barclay family which are unlikely ever to be repaid.”
The future ownership of the Telegraph titles and the Spectator magazine has been uncertain since June 2023, when Lloyds Bank seized them after the Barclay family failed to repay £1.16bn in debts. These debts were later repaid by a UAE-backed consortium that intended to purchase the group but was forced to withdraw under political pressure.
In its 2023 accounts, the media company stated that a detailed review of historical transactions had identified potential irregularities in the recording of transactions with group companies and related parties. While no changes were made to assets and liabilities, the review indicated a potential risk of future repayment claims.
Despite these setbacks, the group surpassed 1 million subscriptions in August 2023. Subscriptions increased from 734,000 in December 2022 to 1.03 million in December 2023, largely driven by the £13m acquisition of Chelsea Magazine Company, which publishes consumer titles including Classic Boat.
The group’s turnover rose to £268m in 2023, up from £254.2m in 2022, due to growth in digital advertising, partnerships, and digital subscriptions.
Anna Jones, CEO of Telegraph Media Group, highlighted the business's resilience, noting that 2023 had reinforced the group's strength. She said, “The substantial growth in our operating profit pre-exceptional items last year was driven by significant advances in both digital advertising and digital subscription revenue.”
The Barclay family, who acquired the Daily Telegraph in 2004, stated: “The Barclay family is proud of its track record of investment in Telegraph Media Group, which under its ownership has been transformed into a successful digital and print media brand, with over 1 million subscribers. Throughout the family’s ownership, the business has been managed responsibly and within all legal frameworks, with all accounts approved by auditors.”
The newspaper group is now up for sale after the UAE-backed consortium withdrew from its £600m deal to purchase the group in May. New legislation blocking foreign-government-backed entities from owning British media groups rendered the transaction “no longer feasible.”
The auction process for the newspaper group, managed by banks Raine Group and Robey Warshaw, is expected to attract bidders including DMGT, owner of the Daily Mail, and Paul Marshall, the hedge fund founder backing GB News. News UK, owned by Rupert Murdoch, has also shown interest in the Spectator magazine.
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