July 29, 2008

Pearson Confident of Record Year

FINANCIAL Times publisher Pearson today said a "strong" first half had boosted confidence in its hopes for the full financial year.

The group, which also owns the Penguin publishing business, reported interim underlying pre-tax profits up 56 per cent to Pounds 84m.

It said sales at the FT Group rose 11 per cent, while adjusted earnings for the division increased from Pounds 68m to Pounds 84m thanks to an increased focus on subscription and digital sales.

Marjorie Scardino, Pearson chief executive, said: "Our momentum is strong, even in these tough economic conditions."

She added the group was confident that 2008 "will be another record year".

The group posted a 2 per cent rise in advertising revenues at the FT publishing arm, bucking the wider trend for plunging ad sales.

But it said the group had seen weakness in technology, corporate finance and recruitment ads at the main FT newspaper.

Personal finance and mortgage-related ad revenues were also weaker at its business-to-business publishing offering, according to Pearson.

"Future advertising revenues remain difficult to predict, but we continue to expect to increase profit at FT Publishing even without any growth in advertising revenue," the group said.

Worldwide newspaper circulation for the FT stood at around 450,000 for the January-June period.

Its textbook education business, which accounts for 63 per cent of group earnings, saw first half sales rise 17 por cent to Pounds 1.18bn.

Adjusted earnings for the division remained flat at Pounds 14m, although the group stressed that profits were weighted towards the second half, as they were for the wider group.

The Penguin consumer publishing operation reported a 22 per cent rise in underlying operating profits to Pounds 26m

Top selling Penguin books in the UK include Devil May Care, the new James Bond novel by Sebastian Faulks, which is the fastest selling hardback fiction title in Penguin UK's history, with almost 300,000 copies shipped to date.

Celebrity chef Jamie Oliver is another best selling author for the publishing group.

Shares in Pearson rose 3 per cent on the first half figures and bullish full year outlook.

Gareth Thomas, analyst at Collins Stewart, said there was "no sign of a slowdown yet" at the group.

He added: "So much for the melt-down in the newspaper market; the FT newspaper does appear to be different, circulations are holding up and so is advertising."

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