Pearson has reported a fall in profits after being hit by the advertising downturn.

The group said pre-tax profits for the year to December 31, before one-off items, fell 12 per cent on the previous year, from £333m to £294m.

Pearson said falling newspaper and television advertising-related profits, and an increased interest charge, more than offset improvements elsewhere.

Marjorie Scardino, chief executive, said: "The recession in advertising and technology markets meant that it was not possible last year to build on the steady improvement in performance which our shareholders have come to expect.

"Good growth in our less cyclical businesses allowed us to keep the overall level of sales and profit roughly level with the year before and, as we look ahead into 2002, we are confident of resuming our progress whatever the economic climate."

Finance director John Makinson said: "Given the markets we are trading in we don't think this is by any means a bad result."

Commenting on staff numbers, Mr Makinson said the group had reduced headcount, overwhelmingly through non replacement of staff and by a hiring freeze, but there was no news about staff reductions.

Pearson said in the toughest advertising market for a decade, FT Group's revenues fell six per cent and profits were down 27 per cent.

It said last week it had received interest in FT Business, which includes Investors Chronicle, The Banker and Financial Adviser, and would consider strategic options in relation to the division.