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Pearson rises as education arm thrives

PEARSON helped the FTSE 100 book gains for the eleventh day in a row yesterday, after the owner of Penguin Books and The Financial Times said it would match last year&rsquo;s profits. <br /><br />The world&rsquo;s biggest publisher of text books said that half year pre-tax profits at the firm, which makes the majority of earnings in its second half, were up 13 per cent to &pound;62m on sales that rose one per cent on a constant currency basis to &pound;2.398bn. <br /><br />Pearson added that full-year adjusted earnings would be &ldquo;at or above the 2008 level of 57.7p a share&rdquo; thanks to a strong performance at its education business, which offset a fall in profits at the arm which publishes The Financial Times. <br /><br />Chief executive Marjorie Scardino also gave an upbeat outlook for the firm&rsquo;s prospects in 2010/11.<br /><br />&ldquo;Market conditions are tough and may stay that way, but we are confident that we will perform well this year and next,&rdquo; she said. <br /><br />Shares in Pearson closed up 12 per cent, rising 70p to 679p. <br /><br />Pearson&rsquo;s education business was the main profit driver despite weakening demand from American schools due to budget cuts. <br /><br />However, the rapid expansion of the firm&rsquo;s international education business as well as sustained demand from higher education helped to offset the softening schools markets. <br /><br />But profits at FT Publishing, which owns the Financial Times as well as half of the Economist, fell almost 40 per cent in the first half of the year. <br /><br />Adjusted operating profit at the newspaper and magazine division was &pound;14m in the first half, against &pound;30m in the same period last year on sales that slipped 13 per cent to &pound;176m. <br /><br />Scardino confirmed that she had approached investors about a share placing in March which did not proceed due to a lukewarm response.