FT parent expects to maintain profits in '09

Pearson PLC, the parent of the Financial Times, reported a small increase in 2008 net profit and said it expects to at least maintain profits this year as its limited reliance on advertising revenue shields it from the worst of the media slowdown, writes Kathy Sandler of the Wall Street Journal.

Sandler writes, “At the Financial Times, the business most exposed to advertising, circulation revenue grew 16% in 2008 and online-subscription revenue grew 9%. However, advertising revenue at the newspaper fell 3%, dragged down by a 13% fall in the fourth quarter, a trend that has continued into the first two months of 2009. Pearson said that it expects advertising to remain tough in 2009, but that online and circulation growth is likely to continue.

“Ms. Scardino told reporters that the company’s advertising revenue had been positive in 2008 up to the final three months, and that even the recent decline was less severe than the company had expected. She added that Pearson has diversified its business so that advertising only accounts for 4% of revenue across the whole company.

“The publisher has already taken steps to mitigate advertising losses, cutting 80 jobs at the FT and offering the remaining employees the option to work shorter weeks and take longer annual leave in an attempt to drive down staffing costs.”

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