Richard Desmond and his top executives enjoyed a £100m bonanza last year as the media mogul’s company saw profits surge following the sale of Channel 5.
Northern & Shell, the parent company of the Daily Express and Star newspapers and magazines including OK!, reported an almost tenfold increase in pre-tax profits year on year to £333.7m in 2014.
The boost came from the sale of Channel 5 to MTV-owner Viacom for £463m, with Northern & Shell reporting an actual profit on the sale of £359m.
The sale of Channel 5 led to Desmond heavily rewarding his senior executives to the tune of almost £20m.
The company report shows that the directors – joint managing directors Stan Myerson and Martin Ellice, financial director Robert Sanderson and group editorial director Paul Ashford – were paid a combined £18.3m last year. A huge increase from the £1.96m in 2013.
The unnamed highest paid director received £4.6m, up from £605,000 the year before.
Desmond was officially paid £795,000 last year for his role as chairman, with the report showing that he also paid £71,000 to buy a “motor vehicle” from the company.
The handsome payouts come as Express Newspapers made drastic cuts last year, seeking to shed as much as 30% of posts, and staff have not received a pay rise since April 2008.
As a result of the Channel 5 sale, Northern & Shell sharpened its balance sheet, benefiting Desmond by almost £90m in total.
Desmond received a £29.1m payout as the final portion of a £60.5m insurance claim made in 2011.
“During the year, the group repaid in full the total amount of £29.1m … owing to Mr R C Desmond in relation to the insurance claim,” the company said in its financial filing for 2014. “The purpose of the premiums is to insure against personal risks and liabilities.”
The company also paid back two loans to Desmond of £23.2m and £29.7m related to a company he owns which administers a personal retirement and a personal pension scheme.
Desmond also received £6.9m from leasing Number 10 Lower Thames Street to Express Newspapers.
The sale of Channel 5 significantly strengthened the company’s balance sheet with the amount owed to creditors falling from £204m to £70m year on year.
The company said it was in a healthy net assets position worth £412m.
“This transaction served to enhance the strong financial position of the group,” the company said. “Specifically, the available funds enabled the group to discharge certain external loans and other liabilities.”
Stripping out the sale of Channel 5, the company made an operating loss of £25.7m after recording £30m in one-off costs, including those related to the sale.
Express Newspapers reported a pre-tax profits drop of £30.4m to just £812,000 year on year, as total revenues fell from £204.8m to £196.9m year on year.
The company said the fall in profitability was due to “certain non-recurring overhead costs”.
The financial filing also said Express Newspapers was “levied an additional management charge” for sister company Northern & Shell of £11m.
“The directors consider the underlying performance of the company to be highly-satisfactory,” the company said.
The company’s pension deficit fell to £42m.
