Earnings: FT Group Paid Subs Drive Slim Revenue Growth

FT Group’s paid content strategy is steering the business back into revenue growth, as it announces a three percent sales lift for the first nine months of the year and a 10 percent revenue rise with the favourable dollar exchange rate.

Parent group Pearson (NYSE: PSO) said in an interim management statement on Tuesday that the FT’s “resilient subscription revenues are helping us to weather the severe advertising downturn”.

FT.com now has 1.6 million registered users and 121,000 paid subscriptions – that’s a 22 percent rise year on year, but only 4,000 more than it had in July.

But at FT Publishing, the division that houses FT Group, revenue was down 14 percent year on year at constant currencies. This fall isn’t explained – while the FT is the biggest asset in the Publishing division, the unit also includes a 50 percent stake in The Economist Group and B2B businesses such as Mergermarket, both of which have had a challenging, recession-hit year so far.

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Pearson’s earnings

For the first nine months of the year, Pearson increased its revenues by 20 percent and operating profit by 19 percent — but those rises are just two percent and three percent respectively at constant currencies.

The full-year earnings per share forecast is raised to “at or above” £0.60 (assuming the dollar exchange rate stays the same), beating Pearson’s July forecast of £0.57. It’s the sign of some recovery for the education-publishing focused group: in H109 Pearson suffered a 40 percent operating profit drop and a 13 percent dip in revenue.

CEO Marjorie Scardino says: “We have steadfastly pursued a strategy based on quality content, digital innovation, new markets and efficiency gains. As we look towards 2010, we intend to be even more aggressive in these areas – especially new services and fast-growing markets.”

Book publisher Penguin was hit by a four percent dip in revenues at constant currencies (that’s a 12 percent organic rise) but sales in eBooks editions are up 400 percent year on year in the first nine months of the year to almost 12,000. The division has net debt of £1.46 billion, down from a peak of £1.86 billion in June.