The decline in advertising revenues at the Financial Times is not expected to show any recovery until 2005, according to analysts at Morgan Stanley.
The FT’s parent company, Pearson, announced in April that the paper’s ad revenues had plummeted by 18% over the preceding twelve months, with the FT Group as a whole falling by 17%.
Whilst the FT newspaper contributes less than 3% of Pearson’s total revenue, its advertising fortunes continue to attract a lot of attention (a disproportionate amount of attention, according to Morgan Stanley). This is probably because the paper’s figures offer a good indication of the state of the finance and technology press advertising markets.
Pearson is set to release its interim results on Monday 28 July and these figures will include an update on the FT’s trading. Morgan Stanley does not expect much improvement in the figures in this announcement.
Lehman Brothers says that any evidence of a pick-up in revenues since the end of the war in Iraq would be well-received by the market, but it does not speculate on whether an upturn is likely to have taken place.
Meanwhile, Merrill Lynch expects that the FT’s ad revenues will decline by 18% across the whole of 2003. After a 20% decline in H1, this suggests a moderately better second half, particularly in Q4, as Q3 is seasonally weak. Moving into 2004, it forecasts that the paper will return to positive ad figures, with a growth of around 5%.
The Financial Times will cost Pearson £20-25 million this year, according to Merrill Lynch. The broker says that in the absence of an advertising pick-up, some restructuring may be required to return the paper to profit.
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