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Monday, 29 July, 2002, 14:48 GMT 15:48 UK
FT hit by worst ad slump since 1970s
The Financial Times' famous pink pages
Financial Times: Depressing data
Profits at the Financial Times have slid by thee quarters, hit by the deepest downturn since the 1970s in key advertising markets, according to latest figures.

The FT, which racked up a 32m profit in the first half of last year, saw earnings slide to 7m in the same period this year, the newspaper's owner, Pearson, said.


At this stage, we see no sign of an advertising recovery

Marjorie Scardino, Pearson
The decline, which reflects earnings falls at other leading finance titles, came in the face of "the worst downturn in corporate advertising in 30 years", Pearson chief executive Marjorie Scardino said.

The business-to-business, technology and technology markets which account for a majority of ad takings at Pearson's financial titles had been "the three categories hardest hit by the downturn", a statement on Monday added.

Gloom ahead

Ad takings at the FT slumped by almost one third, with newspaper sales sliding 7% in the core UK market, while rising by 14% in the US.

Pearson warned it saw no end to the ad slump, which also saw profits at French business daily Les Echos tumble by 60%.

"At this stage, we see no sign of an advertising recovery," Pearson said.

Cost cuts

Costs at the FT had been reduced by 12% over the six months thanks to a "series of profit protection measures", Monday's statement said.

Marjorie Scardino, chief executive of Pearson
Marjorie Scardino: High hopes for Penguin

Les Echos has also taken a "number of actions to reduce costs".

Separately, news website FT.com also continued to "reduce its cost base", amid a "tough" online advertising environment.

But the site, which has introduced subscription services, reported users up by more than one half to 2.8 million over the year, and saw revenue supported by increased demand for content syndication contracts.

A readership rise was also reported at The Economist, half owned by Pearson, with circulation up 10% to 838,030.

Revival hopes

The data was revealed as Pearson reported underlying pre-tax profits of 26m for the first six months of this year, compared with a 28m loss for the same period in 2001.

And the firm forecast a "significant recovery" in profits thanks to its education division, and publishing arm Penguin, where earnings are set to increase by more than 10%.

"The strength of our education and consumer publishing business should help us to sustain... momentum," Ms Scardino said.

The comments were well received in the City, where Pearson shares stood 5.9% higher at 603.5p in late trading on Monday.

Analyst comment

Much of the rise could be attributed to relief that the data was not worse at a time of investor wariness over media firms, some analysts said.

"The media sector is very much in the eye of the storm," said John Hatherly, head of global analysis at M&G Asset Management.

"Anything that breaks the cycle of bad news could see a disproportionate bounce in share prices."

Kingsley Wilson, analyst at Investec Securities said the figures were "broadly positive".

See also:

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30 Jul 01 | Business
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