‘Prolonged And Deep’ Ad Recession At FT Group Hits Pearson
Pearson, owner of the Financial Times, this morning posted a slight profit for the six months ended 30 June 2002, with cost management at its business newspapers mitigating against the continued advertising downturn.
Weak advertising at the FT Sales fell by 3.0% during the half year, due almost entirely to lower advertising revenues at the Financial Times Group. The FT Group itself saw revenues decline by 14%, in the face of a ‘deep and prolonged advertising recession.
Business to business, finance and technology were the three most severely-affected advertising categories and account for the majority of the group’s ad revenues. Despite the advertising decline, the business newspapers and online services are showing increases in audience levels.
Internet losses decline Losses from the FT Group’s internet enterprises (which include the online businesses of the FT, Les Echos and Expansion as well as its share of FT Deutschland’s FTD.de, economist.com, CBSMarketWatch and Esignal) fell to £24 million, as revenues across these operations were broadly in line with last year and the cost base was significantly reduced.
FT.com continues to grow revenues and reduce costs and remains on track to break even in the fourth quarter of this year. FT.com had 2.8 million unique monthly users in June, up by more than 50% on a year ago.
Pearson makes most of its sales almost all of its profits in the second half of the year. The company says that it is on course to deliver a significant recovery in earnings for the full year 2002.
Marjorie Scardino, Pearson’s chief executive, said: “We’ve improved our earnings and cash performance despite the worst downturn in corporate advertising for 30 years. The strength of our education and consumer publishing businesses should help us to sustain this momentum both through the second half, when we make most of our profits, and in 2003.”
At 10:00am today, shares in Pearson were up 26½p at 596p.
