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’s profits.
The world’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 £62m on sales that rose one per cent on a constant currency basis to £2.398bn.
Pearson added that full-year adjusted earnings would be “at or above the 2008 level of 57.7p a share” thanks to a strong performance at its education business, which offset a fall in profits at the arm which publishes The Financial Times.
Chief executive Marjorie Scardino also gave an upbeat outlook for the firm’s prospects in 2010/11.
“Market conditions are tough and may stay that way, but we are confident that we will perform well this year and next,” she said.
Shares in Pearson closed up 12 per cent, rising 70p to 679p.
Pearson’s education business was the main profit driver despite weakening demand from American schools due to budget cuts.
However, the rapid expansion of the firm’s international education business as well as sustained demand from higher education helped to offset the softening schools markets.
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.
Adjusted operating profit at the newspaper and magazine division was £14m in the first half, against £30m in the same period last year on sales that slipped 13 per cent to £176m.
Scardino confirmed that she had approached investors about a share placing in March which did not proceed due to a lukewarm response.