Revenues at the FT Group, publisher of the Financial Times newspaper, declined by 8% in 2002, largely as a result of the weak advertising conditions. The poor economy also had a slightly negative effect on newsstand sales, parent group Pearson said this morning in its year-end financial results.
The Financial Times newspaper itself saw underlying sales revenue fall by 19% to £202 million in the year, whilst operating profit all but vanished, down 92% from £21 million in 2001 to just £1 million in 2002. Sales revenue at the other FT Group titles fell by 14% to £102 million, with operating profit down 39% at £13 million.
Advertising revenues at the FT fell by 23% during the course of the year and became weaker during the second half. Ad volumes were down by 24% for the full year, on top of a 29% fall already experienced in 2001. In addition, the paper’s circulation fell by 6% to an average of 473,587 copies per edition.
Nor is the outlook for the FT Group rosy, with Pearson saying it does not expect to witness any advertising recovery in 2003 and is looking to cost reductions to mitigate this.
However, the FT.com website broke even in Q4 2002, with revenues up 9% to £25 million. The website and newspaper are now fully integrated, resulting in a 14% reduction in their combined costs. FT.com’s user base has continued to grow – up 30% to a record 3.5 million unique monthly users in January 2003 – despite the introduction of many paid-for elements on the site.
Pre-tax profits at Pearson as a whole rose by 36% to £399 million, although after goodwill, integration costs and non-operating items are taken into account the pre-tax loss was £25 million (but down from £436 million the year before). The strong performance of the company’s professional and higher education businesses helped Pearson to improve its figures.
Chief executive Marjorie Scardino says that last year’s advertising recession was ‘far deeper than expected’. “While the economic environment is uncertain, we are confident we will make further progress on earnings, cash and returns this year,” she said in today’s statement.
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