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Tortoise Media, the digital start-up that this month agreed a deal to buy Sunday newspaper The Observer, reported a loss of almost £3mn last year in its latest accounts.
The loss will add to concerns expressed by senior journalists at The Observer and its former stablemate The Guardian over the financial outlook of a business that has yet to make a profit since it launched in 2019.
Tortoise, which runs a “slow news” editorial team alongside events and podcast production, said in the accounts that the “focus of the company in 2023 was our path to profitability”.
The company reported a loss of £2.9mn in 2023, down from £4.6mn in 2022, on an earnings before interest, tax, amortisation and exceptional items basis. Revenue fell to £6mn from £6.2mn, while net assets declined to £1.7mn from £4.1mn. The company has reported cumulative losses of £20.3mn since launch in 2019.
But Tortoise said it had broken even in the final quarter of the year as a result of investment decisions aimed at improving earnings, as well as “managing expenditure on our live events programmes, consolidating editorial and production and offering voluntary redundancy”. Headcount at the group was cut from 72 to 64 in 2023.
Audio revenue was boosted by sponsorship, advertising and intellectual property deals, while a new invitation-only membership network for business executives was launched.
Tortoise this month finalised a deal to buy The Observer in the face of widespread staff unrest over the deal, with many worried about their jobs under the new management.
The start-up has committed to protect the editorial independence of the 233-year-old Sunday newspaper and has pledged to keep all staff terms, including for freelancers, and nearly double the commissioning budget.
Tortoise has ambitions to relaunch the Sunday newspaper as a daily digital media site that includes podcasts, videos and newsletters. The first Observer under Tortoise ownership is expected to be published in spring 2025.
The Guardian Media Group’s owner, The Scott Trust, took a 9 per cent stake in Tortoise as part of the Observer deal, while also committing £5mn as part of a wider £25mn investment raised from investors to help revitalise the newspaper.
The latest accounts show that Tortoise was pushed into a fundraising of about £1mn in December 2023, which it said was the “consequence of long corporate sales cycles on cash flow”, and a further £2.7mn via the issuance of shares and convertible loan notes in 2024.
