US election fever hit Penguin sales, says Pearson

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The Independent Online

Pearson has warned that trading at its Penguin books business has been hit by the US election and continuing problems with its distribution network in the UK.

Pearson has warned that trading at its Penguin books business has been hit by the US election and continuing problems with its distribution network in the UK.

In a trading update on the third quarter yesterday, the publishing group also reported that advertising sales at its Financial Times newspaper had slipped from the performance of the previous three months but remained in positive territory. Pearson's biggest business, educational books, was steady.

At Penguin, Pearson said that difficulties with the automation of a new UK warehouse were continuing.

Analysts shaved a further £5m off profit forecasts for the division, on top of the £5m taken off at the half-year stage, as the company has had to incur additional costs.

Pearson said that the excitement around the US election meant that people in the country were spending time watching television or reading newspapers - rather than buying books.

The company said it expected the FT to break even in the fourth quarter of the year - traditionally a strong period.

Marjorie Scardino, the chief executive, said she was "hopeful" of a return to profitability next year but did not commit to it. Asked about rumoured further significant cost-cutting to come at the newspaper, she appeared to deny it. "We're in investment mode at the FT," she said, pointing to the recent launch of the Asia edition.

Advertising revenues were up 2 per cent for the first nine months of year. At the half-year stage, the figure was 3 per cent: analysts estimated that the second quarter had been up 7 or 8 per cent, while the third quarter appeared to show a gain of 1 per cent, compared with the period in 2003. For the whole of last year, ad revenues were off 15 per cent.

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