Advertising revenues have lurched further downwards at the Financial Times, ahead of today's revamp of the newspaper.
Pearson, owner of the FT, also warned on its US schools textbook publishing business yesterday, as states' education budgets continue to come under pressure.
"A number of states are finalising their budgets, which will shape the overall size of the market this year and may mean some purchases are deferred into the second half [of the year]," the group said.
Johnathan Barrett, an analyst at Teather & Greenwood, said: "Pearson has said it will outperform others in the schools market but it has not said how large that market will be."
Pearson shares fell 3 per cent to 539p as analysts shaved about £20m off group profit forecasts for 2003.
In a trading update for its annual meeting, Pearson revealed that advertising sales at its business newspapers "have deteriorated significantly in the last month". Ad revenues at the FT are now down 18 per cent on last year for 2003 so far – compared with the 5 to 10 per cent fall that was seen in January and February. A spokesman for Pearson said companies were reluctant to advertise during the Iraq conflict, not wanting to see their corporate messages next to war coverage.
Pearson said: "If advertising continues at the levels we've seen in the year to date, FT Group profits would be lower than current market expectations but still ahead of last year."
Analysts were expecting the FT newspaper to make a small loss for 2003 but are now pencilling in a loss of £15m to £20m. The FT group made a profit of £80m last year. Other business papers in the group include Les Echos in France.
Marjorie Scardino, Pearson's chief executive, has signalled confidence in the FT with plans to invest £10m in the paper this year. The UK edition of the FT will see the Saturday paper relaunched today with a new magazine and other sections revamped. There is also a drive to build more subscribers for the US edition and a FT for Asia will be launched towards the end of this year.
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