Pearson lifted by first FT profit in four years

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The Independent Online

The Financial Times is returning to its "heartland" of business reporting, its owner Pearson declared yesterday as it reported the first profit at the newspaper since 2001.

Dame Marjorie Scardino, Pearson's chief executive since 1997, again moved to quash speculation that the paper would be sold off and indicated she would remain in the top job for years to come after delivering better than expected financial results for 2005. "All indicators are going the right way. All of our businesses outperformed," Dame Marjorie said.

Pearson's educational publishing business achi-eved strong growth during the period and its other two divisions, business newspapers and Penguin Books, also bounced back.

Group sales growth was 9 per cent for 2005, to £4.1bn, while underlying pre-tax profits jumped 23 per cent to £422m.

"I'm staying here until I'm 232," Dame Marjorie joked. "I had to reshape the company. Then we had a low period when we had to make our assets perform. 2005 is only the beginning. It is the first of several good years. I want to enjoy a little bit of that."

Under Dame Marjorie, Pearson has sold off a number of non-core businesses. It then suffered a downturn at both its educational business and the FT. More recently, Penguin has been through book distribution problems in the UK.

The FT achieved a 6 per cent growth in revenues in 2005 as ad sales grew by 9 per cent. Profits at the paper were £2m, compared with a £12m loss in 2004. So far this year, advertising revenue is 12 per cent higher.

Responding to reports of shareholder pressure to sell the FT - the latest sign of which emerged from fund manager Axa over the weekend - Dame Marjorie said the FT would enjoy a boost to profits from the recovery in ad revenues. "We have a rolling review of each of our businesses. We are always asking the question. But we are not capital constrained. We don't need to sell," she said.

The FT's editor, Andrew Gowers, was replaced in November, with the company citing "strategic differences". Dame Marjorie said yesterday that the paper would now focus less on politics and international affairs, though it saw itself very much as a global title. She said: "Strategically looking, the paper has to get back to its heart-land of business and finance. It has got to get at the nuts and bolts of business."

Educational publishing, which is based in the US, achieved sales growth of 12 per cent in 2005 and underlying profits rose 22 per cent - in contrast to the difficulties that have hit Pearson's main UK-listed rival, Reed Elsevier.

At Penguin, where operating profits grew 4 per cent in 2005, the company has ditched many of its established writers, some of whom require large advances, in favour of first-time authors. Penguin now has 250 new authors, representing the company's biggest investment in new talent.

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