The annual December trading update from Pearson plc, the international media and education company, paints a bleak picture with no recovery in sight for the advertising market.

The company’s previous statement highlighted difficult trading environments for its Latin American and corporate training businesses - these markets have continued to deteriorate.

Pearson announced measures, which although reducing profits this year, were aimed at strengthening the company’s position for 2002. In Latin America, Pearson have tightened credit terms, increased reserves for obsolescence and bad debts and restructured operations. The company also announced a further scaling back at FT Knowledge, the corporate training business where profits from education operations at some £35 million lower than current market expectations.

Marjorie Scardino, chief executive of Pearson, said: "The markets for advertising and technology continue to be tough, compounded by problems in Latin America. We can’t say when these markets will recover, but with our cost base significantly lower, we’re putting our business in the best possible shape for the year ahead."

Pearson, which operates Pearson Education, the Penguin Group, the RTL Group, and the Financial Times Group, has recently cut back some 150 staff at the Financial Times. (SP)