Penguin publisher Pearson raises guidance

Penguin books and Financial Times publisher Pearson said it was more optimistic about prospects for the rest of the year today after seeing further strong growth from digital businesses and developing markets.

The group, which is a major supplier of text books in the United States, reported a 6% rise in half-year sales to £2.4bn while underlying profits were 20% higher at £208m in the six months to June 30.

The improvement benefited from a 10% rise in profits at FT Group, although Penguin’s adjusted operating profits were broadly flat at £42m amid strong comparisons with a year earlier and “significant retail disruption”, including the bankruptcy of Borders in the United States.

However, it added that ebook sales grew 128% in the period and now represent 14% of Penguin revenues worldwide. Best-sellers in the UK included Marian Keyes’ The Brightest Star in the Sky and Jamie Oliver’s 30 Minute Meals.

Across Pearson’s education division, sales rose 6% to £1.75bn and operating profits lifted 30% on a headline basis to £135m. This was despite a slower year for the US education publishing industry and “exceptionally” strong figures in 2010.

Upgrading the group’s guidance for the full year, Pearson chief executive Marjorie Scardino said she was encouraged by current trading momentum, particularly in digital businesses and emerging markets.

She added: “Though market conditions are anything but easy, we are sufficiently encouraged by our start to the year to raise both our guidance and our dividend.”

Pearson shares were 4% higher today as the company now expects earnings per share of around 80p a share this year, compared with the 77.5p achieved in 2010. Today’s interim dividend rose 8% to 14p a share.