London: British publishing group Pearson posted a better-than-expected 2008 adjusted earnings per share of 57.7 pence thanks to a strong performance at its educational unit, and said it expected to either match or better that in 2009.
The owner of the world’s largest educational publishing business, the Financial Times group and Penguin books, reiterated on Monday its caution about the economic environment but said it would pay a dividend up 7% at 33.8 pence.
“We don’t expect economic conditions to improve any time soon, but we do expect our company to remain hardy and aggressive,” Chief Executive Marjorie Scardino said in a statement.
Pearson had said in January it expected to report headline earnings growth of about 20% for 2008, which would result in adjusted EPS of 56.0 pence. On Monday it reported a 24% rise to give it adjusted EPS of 57.7 pence.
“Based on current exchange rates and market conditions, we would expect to achieve full-year adjusted earnings at or above the 2008 level of 57.7 pence per share,” it said.
Pearson reported that 2008 underlying sales rose 8% at constant exchange rates to £4.8 billion pounds ($6.81 billion), beating the average analyst forecast of £4.69 billion in a Reuters Estimates poll of 17 analysts.
Profits at the educational unit were up 11% to 474 million pounds due to “substantial growth” in US Higher Education and International offsetting weak market conditions for US school publishing.
Profits at the FT Group, the only part of the company that still has significant exposure to advertising, rose 13 percent to 195 million pounds and Penguin profits rose 4% to £93 million.
The group said trading momentum had remained strong in the fourth quarter for the education business.
The Financial Times Group continued to achieve good growth - in particular at Interactive Data and Mergermarket - but said FT Publishing saw a decline in advertising revenues while consumer publishing markets in the US and the UK were challenging.
Penguin performed well in the key holiday selling season, it said.
“We are planning on the basis that the tough market conditions that we saw for some of our businesses towards the end of 2008 are likely to persist throughout 2009,” it said.
It said it was planning for weak conditions in the US school publishing market but expected continued growth in testing, higher education and international education businesses. It did not say what impact it expected from the new US administration.
For the FT Group it expects strong renewal rates in the subscription business but a tough year for advertising, and at Penguin it expects another competitive performance in challenging trading conditions.
Net debt was £487 million higher at 1.46 billion due to the impact of acquisitions and disposals and the year-end strength of the dollar on its largely dollar-denominated debt.