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October 11, 2022

Financial Times profit up after ‘strong rebound’ from Covid-19 in 2021

By Charlotte Tobitt

The Financial Times has reported a strong “rebound” from Covid-19 in 2021, returning to profitability and growing revenues by almost a fifth.

Financial Times Ltd accounts filed with the UK’s Companies House show it went from a loss before tax of £29m in 2020 to a pre-tax profit of £4.3m in the year ending 31 December 2021. Revenue for FT Ltd grew by 16% to £370m.

The FT Ltd filing said: “The main drivers in the increase in profitability were the strong rebound from the Covid-19 pandemic that had adversely impacted key revenue streams including print circulation, print advertising and live events in 2020, and additionally the recognition of further deferred tax assets in respect of losses carried forward for future utilisation.”

However the FT Ltd accounts filed in the UK do not show consolidated earnings for the FT’s global business. The FT is wholly owned by private Japanese firm Nikkei, which does not publish any global FT financial figures.

According to unaudited figures shared internally and seen by Press Gazette, the FT made global revenue of £438m in 2021, up 18% from the year before. Digital content revenues were said to have risen 8% year-on-year.

The unaudited internal document also said operating profits had “made a strong recovery from break even in 2020 to £30.7m in 2021”.

Overall, the document revealed, the FT had its strongest advertising performance since 2015 following growth of 34%, in part due to the return of luxury clients after the Covid-19 lockdowns. Digital ad revenues rose almost 40% to £68.3m and equalled print for the first time.

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Explaining the financial set-up, an FT spokesperson told Press Gazette: “The FT Ltd accounts give an incomplete view of FT Group performance because they cover our main UK trading entity only.

“The group takes most of its costs in the UK, but generates a large volume of revenue in overseas markets. In fact, the FT Group generated operating profit of £31m on £438m of operating revenue last year, an extremely strong performance and bounceback from the pandemic.

“The profit number would have been even higher, but we made a one-off 8% salary payment to all staff at the end of the year in recognition of their outstanding contribution.”

This one-off payment in December last year became a standardised £5,600 for all editorial staff regardless of their salary.

The FT Ltd accounts said: “This payment was in thanks and acknowledgement of the effort and commitment from FT employees despite the strains that staff experienced throughout the pandemic and multiple lockdowns.”

More recently, FT staff have benefited from a one-off £1,800 payment to help them with the rising cost of living.

FT chief executive John Ridding told staff in the internal briefing that without December’s one-off payment, “profits would have been near record levels”.

He also said the group had “rebounded from break even to robust profitability” while “every revenue line performed strongly”.

According to the internal document, the FT’s paying readership grew by 5% year-on-year with 1.16 million accessing its journalism in print and digital in 2021.

Its digital paying readers grew by 5%, driven primarily by corporate subscriptions which were up 6%. In March this year, the FT announced its digital-only subscribers had crossed the one million mark.

Looking ahead, the FT Ltd accounts said: “We anticipate the external environment to remain challenging in 2022 due to continued uncertainty related to the impact of Covid-19, the escalation of Russia’s war in Ukraine which is having an adverse impact on global supply chains, and the consequent inflationary pressures that are growing globally.

“However, we expect our strong digital subscription model to drive further growth opportunities, continue to see buoyancy in the advertising sector and a strong return to more in-person events.”

They went on: “The performance in 2021 and management’s review of future forecasts show that the company is well placed to navigate the challenging economic conditions that are materialising. Paid-for subscriber levels continue to ensure the FT.com platform is a robust business model, while advertising revenues remain strong and our events business has successfully navigated the move towards a more hybrid model that combines both digital and in-person events.”

Picture: FT

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