Internet excitement as Pearson issues upbeat trading statement

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The Independent Online
PEARSON, the international media group, yesterday reported strong second-half trading, boosted by an inaugural full-year contribution from Simon & Schuster to the education publishing division and "buoyant" advertising volumes at its business newspapers, including The Financial Times.

With education publishing representing around 50 per cent of total sales, Pearson took the unusual step of issuing a global breakdown of the division's performance, while noting that operations integration is on schedule.

"The US school business is gaining market share; the US higher education and professional group is building on its market leading position; and while Asian and Latin American markets are recovering only slowly, international operations are benefiting from major efficiency gains," the company said.

In other divisions, Penguin books built on a strong first half and is expected to benefit from cost savings and a stronger second-half publishing schedule.

Pearson TV, which specialises in game show and soap formats, is expected to meet forecasts of near double-digit percentage sales growth.

Analysts expect Pearson to record full-year pre-tax profits of pounds 400m, rising to pounds 494m in 2000. Last year, it recorded pre-tax profits of pounds 629m, a figure that was boosted by disposals.

Pearson's expansion of the Financial Times in Europe and North America continued to gather pace as circulation in November hit 437,000 per day, up 12 per cent from the year ago period. Although FT readership has grown faster than expected, it is not clear when the added sales, which have benefited from cover price cuts and substantial marketing spending, will turn into a rise in the newspaper's earnings.

In recent trading, Pearson stock has jumped on expectations it may soon issue an Internet tracking stock. "Being the world's largest education publisher and with the business publishing brands, the size of the Internet opportunity is phenomenal," said Gareth Hunt, a Lehman Brothers analyst.

Pearson shares closed down 14p at 1834p yesterday.