'FT' reports £5m profit as Pearson books solid growth

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Pearson reported solid progress on all fronts in the first half of the year yesterday, with strong growth in its core education operations complemented by margin improvements at Penguin books and a pick-up in circulation at its Financial Times newspaper group.

Overall, the media group's revenue increased by 8 per cent to £1.9bn, the largest increase for five years, driving an improvement in adjusted profit before tax to £31m. The majority of full-year revenues and profits will be booked in the second half due to the phasing of education spending and consumer book sales.

Dame Marjorie Scardino, Pearson's chief executive, said: "All parts of Pearson are making strong progress, and our steady investment in new content and services is paying off with sustained organic growth, market share gains and margin improvement."

Ms Scardino detailed Pearson's growth plans in the education sector, where it hopes to gain market share in areas such as digital education programmes and exam testing. Pearson forged ahead in the US market during the period, winning 30 per cent of new US schools contracts. In California, the company has taken a 41 per cent market share in elementary social studies as a result of a new online education product that uses video and interactive functions. "A big fat text book on the table does not really excite students any more," Ms Scardino said.

Pearson is also looking to expand its exposure to UK exam testing. It has marked 8 million tests in the UK over the past three years and will launch a pilot of its testing services across 10 schools this year.

The Financial Times reported a £5m profit as circulation increased 5 per cent to 447,000 and advertising revenue rose 11 per cent. The advertising uplift came predominantly from the financial and luxury goods sectors. Ms Scardino said that 50 per cent of advertisements were sold as part of a wider global package.

Asked whether the FT was up for sale, Ms Scardino said Pearson has a rolling review of each of its units. But she said a sale of the business has not been a big issue among its investors. Regarding her own position, Ms Scardino said she is "not going anywhere".

Ms Scardino boasted that Penguin had more bestselling titles in the US and the UK in the first half than ever before. The book division continued to improve margins, with profits rising 38 per cent despite only a 2 per cent rise in sales.