The group, publisher of The Guardian and Observer newspapers, was hit by the advertising downturn, as well as a £33m investment in its internet activities charged to the profit and loss account.
Guardian chairman Paul Myners said: "A significant investment of £33m in internet activities across the group, charged to the profit and loss account, coincided with the outstanding success of Guardian Unlimited, justifying GMG's strategy of building new businesses in a wholly integrated way rather than as detached elements of the core organisation."
Turnover for the year ending March 31 2002 was up 4% to £456m. Following the acquisition of Scot FM for £25m in June 2001, the group invested nearly £4m in developing its network of Real Radio local stations across the UK.
Bob Phillis, chief executive of GMG, described the year as "testing". However, he was more hopeful on the outlook, saying: "While we do not anticipate any significant upturn in the levels of advertising demand until the second half of the year, the start to the new year has been encouraging."
Guardian Media Group is owned by the Scott Trust and ploughs any profits from GMG back into the business. The trust was founded in 1936 with the aim of maintaining the independence and quality of its newspapers.
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