Scardino: remains upbeat
There was no comfort for Financial Times journalists in the Pearson half-year results. Both chief executive Dame Marjorie Scardino and FT group managing director Olivier Fleurot refused to give assurances that there would be no more job losses.
FT operating profits were down 78 per cent year on year from £32m to £7m and are forecast to be 10 to 15 per cent down for the whole year. Pearson’s first-half pre-tax loss of £188m leaves the company still intent on cost savings.
The FT has had a long recruitment freeze, an early retirement programme and lately announced nine job losses when it closed The Business supplement.
Although Scardino said, "We like to keep people working", she added that she could not be expected to answer questions on redundancies since the company did not want to talk about things to do with its staff until it had talked to the people themselves.
Fleurot said: "We’ve been looking at our cost base since very early in February 2001. It’s an ongoing process. We don’t like to make big headlines about our cost-cutting initiatives, but behind the scenes we do a lot.
"One of the most significant ones was to merge our newspaper and our online operations and we will review our cost-base on an ongoing basis."
Scardino explained that The Business had been closed partly "because it wasn’t washing its face" and partly because it had a confused editorial mission.
The advertising recession had hit the FT Group publications hard, Scardino acknowledged, with advertising volume at a 15-year low.
Fleurot denied the FT had neglected its UK edition, saying its editorial content had changed the most of its global editions over the past four years.
"It is very cyclical because the UK is where the proportion of retail sales is the highest. All business newspapers have suffered in all markets," he said.
Scardino added that in the UK there was a direct correlation between the market going down and FT circulation going down.
There was one cause for joy, though. FT.com will break even on target in the last quarter of this year, Scardino said. It has 2.8 million monthly users and its new subscription service has brought in 17,000 subscribers in two months.
Pearson now intends not to sell its FT Business group of magazines, but to work out a strategy to help it grow.
Scardino was still upbeat about Pearson’s prospects, despite her 1997 promise that the company would double its share price in five years, which has demonstrably not hit target.
She foresaw the company returning to double-digit earnings this year – not because she could see an upturn in the advertising market, but because the company had a lower cost base.
By Jean Morgan