Monday, July 30, 2007

Pearson Profit Triples

Pearson posted revenue gains of 3% - up 6% on a constant exchange basis - and profit from continuing operations tripled from £14mm to £40mm for the first six months of 2007. Net income was lower for the period due to a charge of £123mm for the sale of its government services group earlier this year.

For the first half education revenues were up 7% and profit also increased. The company's earlier statements regarding revenue growth particularly in education seemed conservative especially given the add on acquisitions the company has made in the past 18mths. Regardless, some analysts were surprised that the company has raised its growth expectations for the total to between 5-7% driven in part by the strength of education.

Marjorie Scardino, chief executive, said:
"Our half-year results are always just a hint of our potential for the year, but
certainly a strong hint this year. The Financial Times Group is showing the
value of its unique strategy; Penguin's publishing and profit are both solid and
promising, as is its approach to change in publishing; and in Education we
continue to set the pace as we use technology to personalise learning

Scardino also said on the conference call that the company was not completely seriously interested in the WSJ meaning that they were never going to put cash into a deal or make a deal that would have diluted EPS. However, she also said that when a competitor is being sold as an executive she is obliged to review all options which seems to be what they were doing.

Pearson's share price went up 2% yesterday on the news. On the back of these results and the others in the past few days, the publishing and information business seems to be doing quite well.

Pearson PR

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