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Time Out owner Tony Elliott must inject at least £3 million into the magazine to ensure it remains a “going concern”, annual accounts showed today.
Time Out Group said it had to seek extra funding because “liabilites exceeded its total assets” by £10.7 million on 31 December 2008. Pre-tax losses more than doubled to almost £3.1 million in 2008, despite turnover rising 13.6 per cent to £29.2 million. Net debt, including loans and overdrafts, was £8.3 million.
Mr Elliott, who founded Time Out in London in 1968, has committed himself to investing “funds of no less than £3 million to reduce bank debt” and lenders have agreed to new financing arrangements. He said the media advertising slump had hit the group.
Time Out's weekly circulation fell although print subscriptions increased and its British website enjoyed “strong growth” to 1.8 million monthly visitors.
Mr Elliott told the Evening Standard: “We have been through a very difficult period. We saw a drop in advertising of up to 30 per cent.” He said his decision to inject £3 million was “a vote of confidence in the business”.
Despite posting a pre-tax loss, Time Out declared an operating profit of £343,000 before exceptional items. Mr Elliott said preliminary figures show “we made a good profit in 2009 and 2010 looks better”, with plans for new online editions for Los Angeles, San Francisco, Boston, Miami and Washington.
But Time Out's auditors were obliged to issue a warning about “the company's ability to continue as a going concern”. The group could “require further financing to continue trading” if it fails to meet “forecast trading results” this year or if Mr Elliott does not invest £3 million by June.
Time Out said forecasts “indicate the group will be able to operate without requiring any additional funding”. Mr Elliott said last year that he might consider selling the magazine.
The group also holds minority interests in the weekly New York and Chicago editions of Time Out — although control in Chicago is now largely in the hands of American co-investor Joe Mansueto.
