The media industry is undergoing change unprecedented in its speed, breadth, depth and impact, bringing both opportunities and serious threats.

The effects of this change have been accelerated and exacerbated by the worst recession many of us can remember.

Few, if any, working in the sector had experienced the kind of trading conditions seen during 2008/09 before – conditions which have continued in 2009/10 and which are likely to continue at the same level beyond 2009/10.

Our industry, exposed as it is to advertising, has felt the full force of economic shock and profound structural shifts in its markets.

This has challenged the sustainability of some established business models.

Partly as a result of these changes, power is concentrating around huge players such as the BBC, which has guaranteed funding, and online businesses based on search and aggregation, which have none of the costs associated with journalism. This makes recovery and discovering successful new business models all the more challenging.

There is now a growing awareness of the threat to the future of content providers in the commercial sector. The disinclination of consumers to pay for content online, the lack of a payment model from content aggregators and the fall in yields from online display advertising represent a substantial hurdle in the path of organisations in the process of transition to multimedia publishing.

In 2008/09 GMG continued to pursue its successful strategy of managing and investing in a broad range of businesses and assets in order to provide financial security and stability for its core division, Guardian News & Media (GNM) – and the Guardian in particular.

The sharp decline in the advertising market had an impact on each of the wholly owned businesses. GNM, GMG Regional Media, GMG Radio and GMG Property Services all saw their revenue and profit fall.

The regional media business, along with its peers, experienced especially steep declines, necessitating major cost reductions – including large-scale redundancies.

All of our businesses, not least GNM, are reducing costs to a more sustainable level in this new, harsher environment for media companies. As they always have done, they are also looking to the future (the future of journalism, media and the business model) in an industry at a critical inflection point.

Despite the difficulties facing parts of the Group, 2008/09 saw a number of positive performances and notable achievements across the portfolio.

The two joint ventures with Apax Partners – Trader Media Group (TMG) and Emap – continued to perform strongly, delivering substantial profit despite adverse market conditions.

TMG accelerated its successful transition from print to online publishing. Auto Trader, its principal brand, now generates the overwhelming majority of its profit through its website rather than the magazine. The brand strengthened its formidable market-leading position on every platform.

Emap, in its first full year under the joint ownership of GMG and Apax, also performed strongly, increasing operating profit year-on-year. Its diverse range of revenue streams – from business-to-business events, data and publishing – and market-leading positions were the bedrock of this excellent performance.

The journalism of our flagship title continued to flourish in print and on the web. The Guardian accelerated its global online expansion, reaching a record audience of 29.8 million unique users in January 2009. And its publisher, GNM, took a large step forward in its journey towards a truly 24/7, international, multimedia future when it moved to a new home in King’s Cross in North London.

The move to the new Kings Place building was well executed by the GNM management team with the invaluable support and involvement of staff. Kings Place provides a vastly improved working environment for GNM’s people and enables new ways of working that will underpin the company’s ambitious plans.

During the year GMG continued to focus effort on further developing the capabilities of its senior management, as well as sharing knowledge and expertise, through a range of cross-Group programmes and events. The success of our emerging leaders programme gives us great confidence in the strength and depth of our leadership teams.

Right across our divisions and joint venture companies we have some of the most talented people working in media. The Group thanks all its staff for their effort and commitment during this challenging time for our industry.