'FT' advertising grows for first time in 3 years

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The Independent Online

The Financial Times has had its first half-yearly growth in advertising revenues in three years, Pearson reported yesterday.

The Financial Times has had its first half-yearly growth in advertising revenues in three years, Pearson reported yesterday.

The books and business newspapers group cautioned however that it was still too early to call a rebound in ad sales. The company's FT title saw ad revenues increase 3 per cent for the six months to the end of June. That followed six successive halves of advertising declines but the newspaper remained in loss.

Rona Fairhead, Pearson's finance director, described ad sales as "erratic with poor forward visibility".

The FT's loss for the first half of 2004 was £6m, down from a £15m loss seen for the period in 2003. The company said the £9m improvement was down to cost-cutting action it had taken, with revenues at the FT up just £2m at £104m.

The full-year 2003 results saw the newspaper plunge to a £32m loss. The company said full-year losses at the FT would be about £20m this time, implying a further £6m loss for the second half of 2004. Many analysts suggested that the second half ought to turn out better than this.

At the height of the stock market boom, in 2000, the paper made a profit of £81m. The FT's cost base has been slashed by £100m since that time.

The company said that ad trends varied across industries. The FT has seen "rapid growth" in recruitment, luxury goods and business travel advertising but technology and business-to-business sectors remain weak.

Performance at Pearson's Penguin book publishing business was below City expectations, with the interim profit more than halving to £10m. The division was hit by problems in its UK warehousing and distribution, disrupting the supply of books, but the company said these difficulties were now largely over.

Penguin and Pearson's largest business, educational publishing, are dependent on trading in the second half of the year. Education saw an unchanged loss of £26m in the first half. Underlying group-wide profit for the first six months of 2004 was £2m, compared with a £1m loss last year. City forecasts are for a full-year group profit of some £420m.

Pearson said it was confident of meeting expectations for this year and in 2005, when it foresees a much stronger result from its educational business, as a result of a much-improved school textbook buying schedule in the US. Next year should also see much stronger performance at the FT.

Anthony de Larrinaga, an analyst at SG Securities, said: "It is the 'jam tomorrow' story still from Pearson. A fair amount of that has credibility but it is a question of degree. It remains to be seen whether the rebound will be a great as many in the market are expecting."