Pearson profits rise by 13% as FT publisher embraces digital future
Scardino rules out sale of Financial Times but offers no update on Interactive Data
Tuesday 02 March 2010
Shares in Pearson hit an eight-year high yesterday after the publisher of the Financial Times and Penguin books announced a 13 per cent increase in pre-tax profits.
The chief executive, Dame Marjorie Scardino, said Pearson had ruled out the sale of the FT, alongside the possible disposal of its majority stake in Interactive Data, which provides financial market information. Dame Marjorie said a strategic review by Interactive Data's board was continuing and could yet result in a sale, but she added: "The FT is not part of that. It remains an integral part of the group and is a great brand for Pearson."
Strength at Pearson's educational publishing business in North America drove up the group's total sales by 4 per cent to £5.6bn, at constant currencies, while pre-tax profits rose from £585m to £660m.
FT Publishing, which includes the FT and Pearson's business magazines, including its 50 per cent stake in The Economist, continued to suffer from falling advertising revenues and its profits almost halved to £39m, on sales down 8 per cent at £358m. Digital products and services made up 73 per cent of its revenues last year, compared with 28 per cent in 1999. Over the same period, advertising income fell from 52 per cent to 19 per cent.
Dame Marjorie said FT Publishing now earned more from sales and online subscriptions than advertising, which reflected its push into the digital age. FT.com reported a 15 per cent rise in paying subscribers to 126,000, and registrations for limited access were up 85 per cent at 1.8 million.
Profits at Penguin Books fell 17 per cent to £84m, despite it publishing such bestsellers as Ant & Dec's autobiography Ooh! What A Lovely Pair and Jamie Oliver's cookbooks. Dame Marjorie said Penguin was heavily involved in the ebook market and had signed John Grisham as a children's author.
She added: "We seized the big opportunity to take share in a tough climate, and we increased sales and profits while investing heavily in the future. We're ready to keep growing."
Pearson's shares closed up 44p, or 4.82 per cent, last night at 956p – the stock's highest close since 2002.
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