Financial Times owner Pearson said today the recovery in the advertising market was continuing but revenues remained unstable.

Year-to-date advertising revenues at the FT, which were down 4% at the beginning of March, were now level with last year and forward bookings were a little ahead, the London-based group said.

Advertising revenues in the FT Group remained volatile from week to week, although the overall trend continued to improve.

Pearson, which also publishes text books and novels, said its businesses were trading in line with expectations and it expected a significant pick-up in its financial performance next year.

Chairman Dennis Stevenson said the group continued to expect underlying progress in 2004.

"Looking further ahead, the trading prospects for Pearson are better than at any time in the past three years," he said.

Pearson said it expected the FT Group to make progress this year, with another strong performance from its US-listed financial information provider Interactive Data Corporation and cost cutting in its business newspapers.

Efficiency measures in the FT Group have included the merger of its UK and European commercial operations and job losses, although a spokeswoman declined to give details.

Since 2000, the FT has reduced costs by around £100 million.

Pearson said its Penguin publishing division had made an encouraging start to the year, although it faced tough comparisons after a record 2003, with reported results set to be affected by the weak US dollar.

"With its investment in reaching new readers and another strong second half publishing schedule, we expect Penguin to grow ahead of its market once again," the group said.

Pearson's Education division, which covers testing and assessment services and online learning, had also started the year well, with revenues in the overall school business expected to be broadly in line with 2003.

Its US higher education business continued to outpace its market and its professional education operations were on track to increase revenues and profits.

Friday April 30, 2004