Two of Europe’s most profitable media groups, London-headquartered Pearson and Luxembourg-based RTL, both warned yesterday that the continuing advertising recession had impacted adversely on their respective bottom lines.
According to Pearson, its flagship Financial Times Group is experiencing the worst advertising decline in ten years. Despite cost-cutting measures, Pearson chief executive Marjorie Scardino predicted that current year profits for FTG would fall 15% below the previous fiscal’s £211 million. Nor did the group see any prospect that the advertising situation would improve in 2002.
Taking Pearson's massive investment in internet projects into account, the group reported an interim pre-tax loss of £233m against £123m profit in the same period last year. However, thanks to a buoyant performance by its educational subsidiary, Pearson shares, which have fallen 50% in value during the past year, rallied by 49p to £10.87.
In mainland Europe a similar tale of woe from pan-European TV group RTL – in which Pearson has a substantial stake. Chief executive Didier Bellens warned that current year profits could be as much as 15% below forecast. While RTL was gaining market share in most European countries, he admitted that the depth of the advertising downturn had caught it by surprise.
News source: The Times (London)