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| Pearson says FT is not for sale as digital subscriptions overtake print | Pearson says FT is not for sale as digital subscriptions overtake print |
| (about 1 hour later) | |
| Financial Times owner Pearson has declared the paper is not for sale, as it confirmed that the number of digital subscriptions to the FT has overtaken the number buying the print edition for the first time. | Financial Times owner Pearson has declared the paper is not for sale, as it confirmed that the number of digital subscriptions to the FT has overtaken the number buying the print edition for the first time. |
| John Fallon, who recently took over from Marjorie Scardino as the Pearson chief executive, categorically denied the Financial Times was for sale. | John Fallon, who recently took over from Marjorie Scardino as the Pearson chief executive, categorically denied the Financial Times was for sale. |
| "It is a valued and valuable part of Pearson," he said. "I've not said the business is for sale, nor have I have initiated any conversations about that or had any conversations." | "It is a valued and valuable part of Pearson," he said. "I've not said the business is for sale, nor have I have initiated any conversations about that or had any conversations." |
| The number of readers subscribing to FT.com increased 18% in the year to 31 December 2012 to almost 316,000, bringing the total circulation of the Financial Times to 602,000. It said 15% of these subscriptions had come from mobile which accounts for 30% of all traffic. | The number of readers subscribing to FT.com increased 18% in the year to 31 December 2012 to almost 316,000, bringing the total circulation of the Financial Times to 602,000. It said 15% of these subscriptions had come from mobile which accounts for 30% of all traffic. |
| Advertising was generally weak with poor visibility into the future, but the FT increased its market share in mobile, luxury and business education. Digital revenues benefited from the launch of FTSmartMatch, which automatically generates tailored content from the user while they are reading FT news stories. | Advertising was generally weak with poor visibility into the future, but the FT increased its market share in mobile, luxury and business education. Digital revenues benefited from the launch of FTSmartMatch, which automatically generates tailored content from the user while they are reading FT news stories. |
| Fallon said that "each and every part" of the company "has to pay its own way and be successful on its own terms and the FT is". | Fallon said that "each and every part" of the company "has to pay its own way and be successful on its own terms and the FT is". |
| He declined to give a breakdown of digital advertising revenues or when the publisher might reach the tipping point at which it would make business sense to close the print product. | He declined to give a breakdown of digital advertising revenues or when the publisher might reach the tipping point at which it would make business sense to close the print product. |
| He said in some parts of the US, the company was already closing the print product because it was more efficient, but that as it was a global product, it was impossible to predict the future for the paper. | He said in some parts of the US, the company was already closing the print product because it was more efficient, but that as it was a global product, it was impossible to predict the future for the paper. |
| "It's too early to call the demise of print," he said. Asked if he thought the paper would be around in 10 years, he said: "I honestly don't know. I think that requires a degree of farsightedness and fortune-telling." | "It's too early to call the demise of print," he said. Asked if he thought the paper would be around in 10 years, he said: "I honestly don't know. I think that requires a degree of farsightedness and fortune-telling." |
| The media and education group's pre-tax profits for 2012 were £434m, down 59% on £1.05bn for the previous year. The steep drop in profits is largely accounted by the fact that Pearson's 2011 profiles included a £412m profit from the sale of its 50% stake in FTSE International. The 2012 results also include £113m in costs relating to the closure of Pearson in Practice. | |
| Operating profit was up 1% to £936m and the company will pay a dividend to shareholders of 45p, up 7%. | Operating profit was up 1% to £936m and the company will pay a dividend to shareholders of 45p, up 7%. |
| FT Group reported sales of £443m, up 4% on 20111. Annual sales revenue up was up 5% to £6.1m. | FT Group reported sales of £443m, up 4% on 20111. Annual sales revenue up was up 5% to £6.1m. |
| Pearson said it expected tough trading conditions and structural industry change to continue in 2013 and announced more details of the integration of its Penguin books with Bertelsmann's Random House following the deal struck last October. | Pearson said it expected tough trading conditions and structural industry change to continue in 2013 and announced more details of the integration of its Penguin books with Bertelsmann's Random House following the deal struck last October. |
| It will spend £150m on restructuring in 2013: part of this will be invested in accelerating the transition from print to digital across its businesses and part will be spent on extricating Penguin from Pearson's centralised operations in preparation for the merger with Random House which it will complete in the second half of this year. | It will spend £150m on restructuring in 2013: part of this will be invested in accelerating the transition from print to digital across its businesses and part will be spent on extricating Penguin from Pearson's centralised operations in preparation for the merger with Random House which it will complete in the second half of this year. |
| Some £50m of the restructuring costs will go into digital services in emerging markets. | Some £50m of the restructuring costs will go into digital services in emerging markets. |
| Pearson said it the reshaping of the company would generate £100m of annual cost savings from 2014. | Pearson said it the reshaping of the company would generate £100m of annual cost savings from 2014. |
| Fallon said the restructuring would see redundancies across the group which employs 48,000. | Fallon said the restructuring would see redundancies across the group which employs 48,000. |
| "There will be some job losses that will result from this, yes," he said, but he stressed that the reshaping was designed to accelerate growth. | "There will be some job losses that will result from this, yes," he said, but he stressed that the reshaping was designed to accelerate growth. |
| He said Pearson's overall business, which is dominated by educational products and services, would benefit from the rise in a global middle class, which is predicted to double in size in the next decade. This will have an impact in expenditure on education by parents. | He said Pearson's overall business, which is dominated by educational products and services, would benefit from the rise in a global middle class, which is predicted to double in size in the next decade. This will have an impact in expenditure on education by parents. |
| Penguin in the UK had its best year on record for bestsellers including Clare Balding's My Animals and Other Family, which went to the top of the charts following the Olympics. Also top of the sales charts was Daniel Kahneman's Thinking Fast and Slow and Jamie Oliver's 15 Minute Meals. | Penguin in the UK had its best year on record for bestsellers including Clare Balding's My Animals and Other Family, which went to the top of the charts following the Olympics. Also top of the sales charts was Daniel Kahneman's Thinking Fast and Slow and Jamie Oliver's 15 Minute Meals. |
| In the US, it published 255 New York Times bestsellers including No Easy Day: the Firsthand Account of the Mission that Killed Osama bin Laden by Mark Owen, the pseudonym of a former member of the Navy Seals. | In the US, it published 255 New York Times bestsellers including No Easy Day: the Firsthand Account of the Mission that Killed Osama bin Laden by Mark Owen, the pseudonym of a former member of the Navy Seals. |
| Pearson generates approximately 60% of its sales in the US where its education business generated £2.658bn, up 2% year on year. | Pearson generates approximately 60% of its sales in the US where its education business generated £2.658bn, up 2% year on year. |
| It said it expected the market to remain challenging in the developed world and publishing businesses partly because of pressures on education budgets and college enrolments. | It said it expected the market to remain challenging in the developed world and publishing businesses partly because of pressures on education budgets and college enrolments. |
| Pearson's shares were down 44p, or 3.2%, to £11.77 in early trading. | Pearson's shares were down 44p, or 3.2%, to £11.77 in early trading. |
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