Pearson reports rise in profits

Penguin books and Financial TImes owner Pearson has reported strong trading in educational publishing

Financial Times parent Pearson has said better-than-expected trading in its education arm offset a 40% plunge in interim earnings from newspapers and magazines.

Pearson, which also owns the Penguin publishing business, reported a 13% rise in pre-tax profits to £62 million in the first six months of the year thanks largely to an 80% surge in international education profits.

The advertising slump left underlying earnings at its FT Publishing arm at £14 million against £30 million a year earlier.

But Pearson said it has been reducing reliance on advertising revenues, now accounting for 18% of FT Group revenues, down from 52% in 2000.

Shares rose 9% as Monday's results came in higher than analysts had forecast.

Pearson - which has been diversifying its business away from a traditional publisher over the past 10 years - said while circulation at the Financial Times newspaper declined by 6%, the number of paying online subscribers rose 18% to more than 117,000.

The Economist, in which Pearson owns a 50% stake, saw weekly circulation grow by 6.4% and earnings rise 26% to £56 million.

In education, its north US business swung out of the red, with half-year operating profits of £12 million against losses of £16 million a year earlier.

The division is its largest business, although the firm's international education operation saw operating profits surge to £23 million, with its key second half selling season yet to come.

Penguin struggled in a tough first half, with earnings down by 23%, but is looking to strong upcoming releases including new titles by Jamie Oliver, Eoin Colfer and Nick Hornby to help the division.