Pearson Reports Strong Start To The Year
At today's annual general meeting, Lord Stevenson, chairman of Pearson plc, reported that the company is trading well and looking forward to another successful year.
Lord Stevenson said:
"By reshaping our strategy and business operations over the past few years, we have created a more international company operating in faster growing markets. We now have leading positions in our three major businesses which stand us in very good stead in all markets and in all conditions.
"Pearson makes the majority of its revenues and profits in the second half of the year. However, at this early stage, Pearson is trading well and looking forward to another successful year."
In an update on business operations, Marjorie Scardino, Pearson's chief executive, reported that:
Pearson Education generates the majority of its revenue in the second half of the year, but it has made a promising start and is on course to achieve strong underlying revenue growth. As the world's leading education company, we are in prime position to help meet the growing worldwide demand for learning, which is being fuelled by stronger public and private investment than has been seen for some time.
US School funding remains buoyant and Pearson Education is capitalising on the opportunities created by a number of major adoptions. Its new elementary reading programme is set to be the bestseller in the majority of the seven states that are adopting new reading programmes this year. The US school business has also secured major sales of secondary science and language arts programmes in both open territory and adoption states, and early sales in the current California mathematics adoption are also encouraging.
NCS, now an integral part of Pearson Education, has made a good start to the year, too. The testing business is benefiting from strong statewide demand and developing its plans to meet the increased emphasis on testing and assessment across the United States. NCS4School, the newest product in NCS's range of enterprise software solutions for schools, is performing well in its trial schools and will be fully launched in the summer.
The Higher Education & Professional group is benefiting from the debut of CourseCompass, its new online course management system which is helping to drive strong growth in adoption and sell-through rates for its major titles. Sales of text/web programmes covering subjects in math and English, the two most popular courses, are particularly strong. The professional and technology publishing group continues to generate many of the leading best-selling information technology titles, but its sales of that category of books are depressed by the downturn in US technology markets.
The International business continues to perform strongly. The schools business is performing particularly well in Hong Kong, Malaysia, Singapore and Canada; higher education markets around the world are in good shape; and the English Language Teaching business, already a leader in Asia, is now growing strongly in Latin America.
Learning Network is firmly established as the world's most popular online learning network (attracting more than 11 million unique monthly users and generating more than 140 million monthly page views). It is focusing its operations more closely on the school and home markets and providing more products integrated with Pearson Education programmes. It is on track to break even by the end of 2003.
The Financial Times Group continues to grow, benefiting from its international and online expansion and its ability to move quickly and flexibly in managing its cost base.
In March, average daily sales of the Financial Times newspaper increased by 6% year-on-year to 503,767. In the year to date, the Financial Times newspaper, along with its sister titles in France and Spain, continues to increase advertising revenues. However, the advertising outlook remains uncertain and we continue to manage the cost base of our newspaper operations accordingly.
FT Interactive Data, benefiting from strong growth in institutional markets, is also in a position to deliver strong revenue and earnings growth.
The FT Group's internet enterprises (which include FT.com, its personal finance and career planning channels as well as its sister sites in France, Spain and Germany and the Group's stakes in the MarketWatch, Economist and eSignal online operations) are continuing to deliver year-on-year growth in online advertising revenues. In this more difficult advertising environment, all these businesses are moving more quickly to generate revenues from new products and services. With costs declining as we move from start up to operational mode, these enterprises will break even by the end of next year and begin to make returns on the investment thereafter.
The Penguin Group is performing well, driven by its increased investment in frontlist authors and the acquisition of Dorling Kindersley.
In the US, in the first 16 weeks of the year, Penguin Putnam had 47 titles on the New York Times bestseller lists, up from 35 in the same period last year. In the UK, 17 Penguin titles reached the Bookseller Booktrack top 15 in the first quarter - more than in the first half of 2000. After breaking even last year, we expect Dorling Kindersley to make a meaningful contribution to profits this year, and steadily to increase profits in the years ahead.
John Fallon/Luke Swanson
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