Pearson first half profit up

Book and newspaper publisher Pearson reported a sharp rise in first-half profits on Monday and raised its full-year sales forecast for its core professional education business to growth of 5-7 percent.
Pearson Chief Executive Marjorie Scardino told reporters in a conference call the upward revision was due to a "burst in growth" in US clients signing up to professional testing services in areas such as school entrance exams, medical tests for nurses and securities exams for dealers. The company, which also publishes the Financial Times newspaper, had previously forecast flat sales for the professional education business.
The company has been active on the deal front in recent months, agreeing to pay $950 million to Anglo-Dutch publisher Reed Elsevier for its Harcourt education assessment and international assets and $477 million for eCollege, an online education firm.
Scardino said Pearson's strategy of using premium content, technology and investment in digital assets would help it deal with rising competition in education and financial publishing.
Shares in Pearson were up 2.1 percent at 786p in afternoon trading, making them one of the best performing media stocks in Europe. The DJ Stoxx European media index was flat.
Pearson also increased its full-year headline revenue growth forecast for its IDC business to 10-12 percent from 6-9 percent previously. Pearson has a majority stake in US-listed market data provider Interactive Data Corp.
In the first half of the year underlying education sales rose 7 percent and moved into a first-half profit of 5 million pounds. FT Group revenue rose 8 percent with profit up 28 percent while Penguin revenues increased 1 percent and profits 11 percent.
Pearson said its first-half adjusted operating profit from continuing operations rose 47 percent to 91 million pounds from 62 million pounds a year ago with adjusted pretax profit up at 54 million pounds from 31 million pounds.
Group revenue rose to 1.72 billion pounds from 1.674 billion, compared with an average Reuters Estimates forecast of 1.67 billion pounds. The revenue forecast was based on a poll of 10 analysts and came inside a 1.643-1.699 billion pound range.
Pearson said the 6 percent rise in the interim dividend to 11.1 pence, reflected its financial performance and outlook. "The markets in which Pearson operates remain buoyant and the group continues to perform well within them," said Numis Securities in a research note.
The company generates around two thirds of its sales in the United States. The majority of profit comes in the second half. Scardino said the sale of its French business newspaper Les Echos was progressing in an orderly manner.
The London-based company has entered exclusive talks with luxury goods group LVMH to sell Les Echos for 240 million euros, an offer that has triggered protests by the paper's journalists and a rival 245 million euro bid from French holding company Fimalac.
Scardino said there were no implications from Les Echos for Pearson's other newspaper assets such as the Financial Times. "Les Echos is a mostly print company and our strategy is now mostly digital. Les Echos needs a national strategy and our strategy is now global," Scardino said.
The Texas-born chief executive said the move by News Corp's Rupert Murdoch to buy publisher Dow Jones & Co Inc for $5 billion had prompted talks with General Electric Co GE controls NBC Universal, the operator of business news channel CNBC.
Scardino said the exploratory talks lasted four days before both companies decided the potential synergies and costs would not stack up for shareholders.
Still, she said the two groups were looking at how to extend the Financial Times' reach via television. The Financial Times Group Chief Executive Rona Fairhead was leading these talks on Pearson's behalf, she added. "It remains an interesting proposition for us and we may do something with them," she said, adding Pearson was in talks with a number of potential television distribution partners.