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FT in the pink in markets turmoil
Robert Lea, Evening Standard22 Oct 2007
Convulsions in world financial markets over the summer have proved good for the Financial Times, Britain's only daily business newspaper.
News that the FT has returned to financial health is likely to increase speculation that its owner, the US-oriented education publisher Pearson, will finally put the pink paper up for sale.
Amid the financial turmoil of the summer in which the collapse of the US subprime mortgage market led to a shutdown in wholesale lending and the first run on a British bank in a century and a half, FT Publishing today said sales have risen by 8%.
"Times of turmoil sell newspapers," said a Pearson spokesman pointing to latest figures which show the FT's circulation rose 2.1% year-on-year in September to 441,219, making the Pink 'Un the only national quality daily to increase readership in recent months.
Despite fears for the global economy during the credit crunch, the FT's advertising revenues accelerated during the third trading quarter.
"With increasing content revenues, both the Financial Times and FT.com have continued to build their audiences through the recent volatility in global financial markets," the company said in its nine-month trading update.
"Our advertising revenues have remained resilient through this volatility, with FT Publishing advertising revenues up 9% in the first nine months - up from 7% growth in the first six months of the year."
An 8% rise in FT sales in the first six months of the year translated to a 28% surge in profits and the business promised double-digit profit margins for the full year as sales growth was maintained into the third quarter.
Pearson-watchers have long forecast the sale of the FT by the group despite veteran chief executive Marjorie Scardino's famous pledge that the newspaper would be sold "over my dead body".
Pearson's extrication from its newspaper interests has seen it negotiate to sell its French titles in Groupe Les Echos to luxury goods house LVMH for €240 million. Speculation is rife that the group is in trying to sell its 50% stake in the loss-making FT Deutschland enterprise.
Scardino said Pearson is on course for record profits as the largest part of its group - US education - is trading at the top end or above analysts' forecasts. US schools publishing is expected to see growth for the year of 6% while in higher education growth for the year should come in at 5% on the back of online learning technologies such as MyMathLab and MyEconLab.
In professional education, Pearson has raised its forecasts for the second time in eight months.
Demand for US nursing qualifications from eastern Europe and Asia, from brokers taking the Nasdaq stock exchange exams, for graduates qualifying for MBA courses and for driving tests in the UK using Pearson's theory exams have combined to grow forecast sales for the full year to between 8% and 10%. Earlier Pearson had been expecting only flat sales.
Sales growth at Pearson's other leg, the Penguin publishing house, is running at 2% against 1% previously , boosted by bestsellers such as ex-Fed chief Alan Greenspan's The Age of Turbulence and celebrity chef Jamie Oliver's Jamie at Home.
