FT in the pink as Pearson heads for record profits

The Financial Times newspaper is on course to make a double-digit profit, its parent company Pearson indicated yesterday as the publishing group said that it would produce a record result this year.

Pearson provided a trading update for the first nine months of 2006 which showed underlying group sales up 5 per cent and underlying operating profit up 15 per cent. The company said that it was "on track to deliver record profits in 2006", beating the £466m seen last year. City analysts expect the company to report a 2006 pre-tax profit of up to £502m.

Marjorie Scardino, the chief executive, said: "We still have a lot of trading ahead of us but we are on track to produce Pearson's highest profits ever this year. That will be the result of strong performances from all parts of Pearson, together with our company- wide efforts to use our scale and technology to improve margins and create valuable new services for our customers."

At the FT, which has emerged from a severe downturn that plunged the newspaper into losses, advertising revenues climbed 10 per cent in the period. The title just broke into the black last year, with a £2m profit. Analysts said that yesterday's update indicated that the newspaper will make some £13m in 2006.

The company said that the FT had attracted advertisers as a result of its global reach and "a series of product innovations" in print and online, such as a revamped How To Spend It quarterly magazine to go with the newspaper.

At the education business, which dominates the group, underlying sales were up 7 per cent. Pearson said that it had "taken the leading position" in the award of new school textbook sales in the US, with some 30 per cent of market share. Sales in American schools were up 7 per cent, higher education was 3 per cent higher, while the professional education sales jumped 9 per cent.

Pearson added: "Across our education business we are seeing rapid take-up of our teaching and assessment technologies and we are moving aggressively to launch them in new subject areas and geographic markets."

At the Penguin books division, 9-month sales were 2 per cent ahead, which was described as "an outstanding publishing performance". Penguin added the Man Booker prize for fiction to a Pulitzer Prize, two Whitbread Book of the Year Awards and two Orange Prizes for fiction won by its authors.