Pearson Trading Update

Pearson is today providing its regular January trading update.

Across the company, our trading momentum continued in the fourth quarter and we will produce record profits for 2007. We will also report strong cash generation and a further underlying improvement in our return on invested capital.

Our businesses have again achieved good sales growth and margin improvement. In our largest business, education, we continued to perform very well competitively, as expected, and will report our strongest year ever.

In business information and consumer publishing, we finished the year ahead of expectations. The FT Group grew strongly in all its subscription businesses, and FT Publishing also sustained its advertising revenue growth and achieved a further significant margin improvement. Penguin combined its ongoing operating improvements with an outstanding publishing performance.

We now expect to report full-year adjusted earnings at or above the top end of the range of current market expectations*, even after the significant weakening of the US dollar during the year**.

Our full year results will also benefit from a tax charge of approximately 27% on adjusted profit before tax.

Marjorie Scardino, chief executive, said:

"This is another excellent performance across all our businesses and on all our financial measures. We have produced another record year and our third consecutive year of underlying earnings growth in the mid-teens or higher. Over this period we have changed the shape of Pearson, invested in our future growth and made the company more efficient and more resilient. Those moves make us confident that we will sustain our financial and competitive progress in 2008."

Pearson will announce its preliminary results for 2007 on 3 March 2008.


* Range of analyst estimates for 2007 adjusted earnings per share is 42.0p to 45.5p according to Bloomberg.

** Pearson generates approximately two-thirds of its sales in US dollars. The average £:$ exchange rate for the full year was £1: $2.00 (against £1:$1.84 in 2006). Each 5c move in the average £:$ exchange rate for the full year affects Pearson's adjusted earnings by approximately 1p per share.

For more information:

Luke Swanson/ Simon Mays-Smith/ Charles Goldsmith  + 44 (0)207 010 2310