PEARSON, the publisher of the Financial Times and a bellwether of the media sector, saw its shares drop by more than 3% yesterday after warning that advertising revenues at the FT would be some 15% lower in 2003 than last year, after a challenging year for its business titles.
The fall, however, slowed in the second half to 12%, with signs of stabilisation in some advertising categories including recruitment, corporate results, and transactions, and online.
Pearson, which also publishes text books and novels, said in a pre-close trading update that advertising revenues across its business newspapers continued to be erratic, although the FT had recorded modest growth in September and a good performance in the US.
Pearson added that it was on course to meet group-wide earnings targets for this year with further growth also expected in 2004.
Profits at the FT Group are likely to be ''slightly ahead'' of last year, with ongoing cost reductions forecast to boost profits in 2004.
Pearson said the division had reduced its cost base by around (pounds) 15m this year, with half of that figure reinvested in the newspaper. Since 2000, the FT has reduced costs by around (pounds) 100m.
In Pearson's Penguin publishing division, underlying revenues are expected to increase by between 1% and 2% this year with another strong publishing schedule set to further boost the business in 2004. The education division, which covers testing and assessment services and online learning, said its school and higher education businesses were set to report underlying progress on revenues and profits.
However, the professional division will be significantly lower than last year because of the loss of a major contract.
Pearson said that as it generates 70% of revenues in the US, the weakening of the dollar will reduce reported adjusted earnings per share by around 2p.
The group said: ''Though market conditions remain tough for corporate advertising and technology-related businesses, we continue to perform strongly in our markets and are benefiting from further efficiency gains.''
On the outlook for 2004, Pearson said it expected ''a significant profit improvement as our business newspapers benefit from continuing cost reductions''. It said Penguin was on track to grow faster than the consumer publishing market, while in education it expects the US school publishing industry to ''decline in the mid-single digits ahead of a significant rebound from 2005 onwards''.
The shares were down 13.25p at 617p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article