30th Oct 2006 07:02
Pearson PLC30 October 2006 30 October 2006 PEARSON NINE-MONTH TRADING UPDATE:ON TRACK TO DELIVER RECORD PROFITS IN 2006 Pearson is today providing an update on its trading for the nine months to 30September 2006. Pearson is trading strongly and in line with our expectations. The fourthquarter is a key selling season in higher education and consumer publishing, butwe remain confident that 2006 will be another good year as we increase marginsand grow ahead of our markets. We continue to expect strong underlying earningsgrowth, good cash generation and a further significant improvement in our returnon invested capital. Highlights for the first nine months of 2006 • Pearson total sales up 11% and operating profit up 26%. Underlyingsales up 5% and underlying operating profit up 15%. • Pearson Education underlying sales up 6% with good growth in allparts: Our School business, with sales up 7%, has taken the leading position in the USnew adoption market and is gaining share in publishing, testing and schooltechnology. It is also successfully integrating its newly-acquired businessesincluding AGS in special needs education, NES in teacher certification,PowerSchool and Chancery in student information systems and PBM in schoolpublishing in Italy. Our Higher Education business continues to benefit from its scale, itspublishing breadth and its innovative online instructional services. It ismaintaining its steady momentum, with sales up 3% going into the year-endselling season. Sales in our Professional business are up 9%, driven by strong growth inProfessional Testing and Government Solutions. Across our education business, we are seeing rapid take-up of our teaching andassessment technologies and we are moving aggressively to launch them in newsubject areas and geographic markets. Pearson Education is on track to grow in the 3-5% range for the year as a wholeand to improve margins, in line with our previous guidance. As previouslystated, School and Professional are facing tougher comparables in the secondhalf of the year. • FT Group sales up 5%. The Financial Times is benefiting from itsglobal reach and a series of new product innovations in print and online.Advertising revenue has continued to climb, up 10% in the first 9 months. IDCreported total revenues up 11% and organic revenues up 4.6% for the first ninemonths (under US GAAP). We continue to expect the FT Group to make furthersignificant profit improvement in 2006 compared to 2005. • Penguin sales up 2% with an outstanding publishing performance, addingthe Man Booker prize for fiction (for Kiran Desai's The Inheritance of Loss) tothe Pulitzer Prize, two Whitbread Book of the Year Awards and two Orange Prizesfor fiction already won by Penguin authors this year. For the full year wecontinue to expect Penguin to achieve similar sales growth as in 2005, withmargins improving further. Marjorie Scardino, chief executive, said: "We still have a lot of trading aheadof 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 toimprove margins and create valuable new services for our customers." Note: All growth rates are stated on an underlying basis, excluding the impactof currency movements and portfolio changes, unless otherwise stated. For more information: Luke Swanson/ Simon Mays-Smith/ Deborah Lincoln + 44 (0) 207 010 2310 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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