Pearson confident for 2008

Financial Times owner and education publisher, Pearson, announced higher than expected pre-tax profits and said it was confident 2008 would be another good year.

Revenue in the 12 months to 31 December increased to £4.2 billion compared to £4.05 billion a year ago. Adjusted pre-tax profit rose to £549 million from £502 million.

The group, which produces approximately two thirds of its sales and operating profit from education-related business, said underlying sales growth in its schools business was likely to be 3%-4% this year if its recent Harcourt acquisition is not taken into account, compared with 6% last year.

Margins in the schools business are expected to be similar to 2007 and increase to roughly 15% in 2009, with percentage sales growth there ‘well into double digits’ this year on a constant currency basis, improved by the Harcourt deal.

Pearson Chief Executive, Marjorie Scardino, said we will have integration costs from the Harcourt testing business which will be meaningful, so you should infer from that that we will be adding to our margins but for those costs.

Margins at its book-publishing arm Penguin are expected to improve further, while the Financial Times division was likely to raise profit without any growth in advertising revenue.

Pearson is the world’s biggest publisher of education materials.

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