Fusion Corporate Partners

Pearson has announced its first half year results

Highlights

Sales up 6% to £2.6bn

• Strong growth in Education (up 9%) and the FT Group (up 7%)
• Penguin sales 4% lower on phasing of publishing schedule and continued industry change

First-half operating profit lower at £188m (2011: £208m)

• Education profits up 6% on growth in North America (up 30%) and International (up 17%)
• Professional profits £17m lower. New funding criteria for 16-18 year old apprenticeships result in sharp decline in volumes; UK training business reshaped
• Sale of FTSE International reduces first-half operating profit by £10m; excluding FTSE, FT Group profits level in spite of increased restructuring charge
• Penguin profits lower at £22m (H1 2011: £42m) on drop-through from lower first-half sales; stronger publishing schedule in H2

Rapid growth in digital and services businesses and developing markets

• Sales up approximately 20% in developing markets (headline growth)
• Education digital platform registrations up 30%; FT digital subscriptions up 31% and now exceed print circulation; Penguin ebook revenues up 33% and now almost 20% of Penguin’s revenues
• Revenues from digital and services to exceed traditional publishing businesses in 2012

Outlook

• Pearson sees good trading momentum in North America, International and the FT Group offsetting weakness in Professional Education and Penguin
• Pearson reiterates full year outlook of growth in sales and operating profits at constant exchange rates, with margins reflecting acquisition integration costs and the FTSE sale.

Interim dividend raised by 7% to 15p per share.

Marjorie Scardino, chief executive, said: “We began 2012 planning for a challenging external environment and our caution was well-placed: conditions have been tough in the early part of this year and, for a couple of parts of Pearson, tougher than expected. But that’s precisely when our planning for structural change and our investments in growth markets show their power. We’ve kept up the pace of transformation, and continued our shift towards digital and services businesses, which this year for the first time will yield the majority of Pearson’s revenues. That strategy will enable us to deliver on our long-term goals of expanding our market opportunity, delivering consistently strong financial performance and helping all kinds of students in all kinds of places to learn.”

Read the full report here