Financial Times moves back into profit
The Financial Times put a stop on its losses today as higher advertising revenues sent it into the black for the first time since 2002.
Pearson, which also owns the Penguin book business and prints textbooks in the United States, said losses of £12m (€17.6m) at the FT in 2004 had been turned into profits of £2m (€2.9m) last year after advertising revenues leapt 9%.
The return to profits came despite a 2% fall in worldwide circulation and helped Pearson boost group pre-tax profits by 23% from £350m (€514m) in 2004 to £422m (€616.7m) last year. Shares in the FTSE 100 firm were up 2% today.
The FT’s average worldwide circulation fell to 426,453 but advertising revenues improved throughout the year, culminating in an 18% rise in the fourth quarter.
The last time the FT was in the black was at the end of 2002 before many advertisers slashed their budgets when the dotcom bubble burst.
Pearson chief executive Marjorie Scardino said she expected the FT to make a “further significant profit improvement” in 2006.
“The FT continues to show good momentum, with circulation up 4% and advertising revenues up 12% in the year to date,” she said.
Pearson’s group profits rose on the back of a 9% increase in revenues from £3.7bn (€5.4bn) in 2004 to £4.1bn (€6bn) last year – the company’s fastest rate of growth for five years.
Mrs Scardino said: “These excellent results illustrate the quality and potential of the business we have built. We expect our strong performance to continue in 2006 and beyond.”
Pearson Education posted record results in 2005 with sales up 12% to £2.66bn (€3.9bn) and profits up 22% to £348m (€510.9m). The group forecast further growth of 3% to 5% this year.
Penguin also performed well in 2005, with sales up 1% to £804m (€1.2bn) and profits up 4% to £60m (€88.1m).
The figures were boosted by sales of Matisse the Master, by Hilary Spurling - named Whitbread Book of the Year – and The Accidental, by Ali Smith, which won the novel of the year category.
Pearson said Penguin had a strong list of new titles for 2006 from best-selling authors including Patricia Cornwell, Jamie Oliver, Sue Townsend and Jeremy Paxman.
