Pearson 2008 Interim results

Pearson announced its 2008 Interim Results on Monday 28th July, 2008.

Download the full press release and financials in PDF format here.

UK Presentation

Marjorie Scardino, CEO and Robin Freestone, CFO, hosted a presentation of the results for analysts and investors at 09:00 (BST).

Click here for a replay of the presentation.

Click here for a PDF of the presentation slides.


Sustained growth

  • Sales up 14%* to £1.965bn;
  • Adjusted operating profit up 38% to £124m;
  • Adjusted EPS up to 5.6p (from 3.1p in H107);
  • Interim dividend raised 6.3% to 11.8p.

Long-term investment strategy paying off

  • Education sales up 17% and first-half profit of £14m with rapid growth in digital learning services and continued international expansion;
  • FT Group sales up 11% and profits up 21%, benefiting from shift towards subscription and digital revenues and focus on global businesses;
  • Penguin sales up 9% and profits up 22%, with strong publishing and innovation in all markets.

Healthy outlook

  • Full-year guidance confirmed; on track for further progress in all businesses.

Marjorie Scardino, chief executive, said: "Our momentum is strong, even in these tough economic conditions. We have leadership positions in good markets and an effective growth strategy based on quality content, digital innovation and international expansion. That strategy makes us confident that 2008 will be another record year, and that we will continue to grow."

Healthy Outlook
£ millions Half year 2008 Half year 2007 Headline growth CER growth Underlying growth Full year 2007
Business performance
Sales 1,965 1,694 16% 14% 6% 4,162
Adjusted operating profit - continuing 124 86 44% 38% 20% 619
Adjusted profit before tax 84 54 56% -- -- 549
Adjusted earnings per share 5.6p 3.1p 81% -- -- 46.7p
Operating free cash flow (274) (265) (3)% -- -- 533
Total free cash flow (274) (324) 15%     407
Net debt 1,682 1,432 (17)% -- -- 973
Statutory results
Operating profit 95 70 36% -- -- 574
Profit before tax 55 35 57% -- -- 468
Basic earnings/(loss) (62) (104) 40% -- -- 284
Basic earnings/(loss) per share (7.8)p (13.0)p 40% -- -- 35.6p
Dividend per share 11.8p 11.1p 6% -- -- 31.6p


* Throughout this announcement, growth rates are stated on a constant exchange rate (CER) basis unless otherwise stated. Where quoted, underlying growth rates exclude both currency movements and portfolio changes. The 'business performance' measures are non-GAAP measures and reconciliations to the equivalent statutory heading under IFRS are included in notes to the accounts 2, 4, 6, 7 and 17.


Pearson makes most of its sales and profits in the second half, owing to the seasonal phasing of our education and consumer book businesses.  In spite of the macroeconomic conditions, we are on track to make further progress on our financial goals and our strong trading performance has increased our confidence in the full-year outlook.

Pearson Education (63% of 2007 sales and operating profit). Our education business is trading in line with expectations. As previously announced, we have begun a reorganisation of our education company, which we are now managing and reporting as three segments: North America, International and Professional. Our expectations provided at the full-year results under the previous segmental analysis (worldwide School, Higher Education and Professional) are unchanged.

In North American Education, we have a strong market leadership position and demand for our products remains healthy. We expect our North American Education business to increase sales by around 10% at constant exchange rates (or by 2-4% in underlying terms).

In International Education, we are well placed to benefit from the growing demand for materials, assessment, technology and related services at all stages of learning. We expect our International Education business to grow sales by around 10% at constant exchange rates (or in the low single digits in underlying terms). These growth rates include the impact of the completion of the UK key stage testing contract in 2007.

In Professional Education we continue to expect sales to increase in the low single digits at constant exchange rates.

For Education as a whole, we expect 2008 margins to be similar to the 2007 level of approximately 15%, in spite of significant integration costs relating to the Harcourt businesses (which we include in our operating results). In 2009, we expect to increase Education margins by around one percentage point as we begin to realise the financial benefit of the acquisitions. Beyond 2009, we see further  opportunities to increase margins in Education as we continue to consolidate our businesses.

Penguin (20% of 2007 sales, 12% of operating profit). Penguin has made an excellent start to the year, with a particularly strong first-half publishing schedule. It is on track to reach its goal of double digit margins for the full year.

Financial Times Group (17% of 2007 sales, 25% of operating profit). The FT Group is on track to achieve continued profit growth this year. FT Publishing has shown sustained growth in subscription, circulation and advertising revenues (up 2%) in the first half. Future advertising revenues remain difficult to predict, but we continue to expect to increase profit at FT Publishing even without any growth in advertising revenue. Interactive Data has raised its guidance and now expects to achieve full-year revenue growth in the 8-10% range and operating profit growth within the 11-13% range (headline growth under US GAAP).

Interest and tax. We expect our interest charge to be similar to the 2007 level and our tax rate to be in the 27-29% range.

Exchange rates. Pearson generates around two-thirds of its sales in the US and each five cent change in the average £:$ exchange rate for the full year (which in 2007 was £1:$2.00) would have a translation impact of approximately 1p on adjusted earnings per share. The average rate during the first half of 2008 was £1:$1.97 (£1:$1.98 in H107) and the closing rate at the end of June was £1:$1.99.

For more information:

Luke Swanson / Simon Mays-Smith / Charles Goldsmith +44 (0) 20 7010 2310

Pearson's results presentation for investors and analysts will be webcast live today from 09.00 (BST) and available for replay from 12.00 (BST) via Video interviews with Marjorie Scardino and Robin Freestone are also available at High resolution photographs are available for the media at


Pearson's sales at constant exchange rates increased by 14% in the first half of the year and adjusted operating profit increased by 38% to £124m. Adjusted earnings per share improved to 5.6p, from 3.1p in 2007. Operating free cash outflow was £(274)m compared to an outflow of £(265)m, in part due to the inclusion of the Harcourt International businesses, which absorb cash ahead of the second half selling season, for the first time. Our average working capital to sales ratio improved to 25.6% (from 26.1% in the first half of 2007).

Our statutory results show an increase in operating profit to £95m(£70m in 2007). Statutory profit before tax was £55m (£35m in 2007). Statutory earnings for the period show a loss of £(62)m (from a loss of £(104)m in the first half of 2007). The losses arise from taxation and exchange on disposals (Data Management in 2008 and Government Solutions in 2007).

Our net debt, which reaches a seasonal peak around the half-year, was £1,682m (£1,432m in 2007) at 30 June. We completed the acquisition of the Harcourt US Assessment business in January 2008 and the disposal of our Data Management (Scanners) business in February.

The board has declared an interim dividend of 11.8pper share, a 6.3% increase on 2007, reflecting this strong start to the year and its confidence in the full-year outlook.

£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
North American Education 713 599 18% 5% 1,667
International Education 365 292 21% 4% 735
Professional 105 104 -- -- 226
Pearson Education 1,183 995 17% 4% 2,628
FT Publishing 188 164 13% 8% 344
Interactive Data 186 168 8% 7% 344
FT Group 374 332 11% 8% 688
Penguin 408 367 9% 9% 846
Total continuing 1,965 1,694 14% 6% 4,162
Adjusted Operating Profit
North American Education (16) (14) (14%) (57%) 273
International Education 20 3 -- -- 92
Professional 10 11 (9%) (9%) 27
Pearson Education 14 -- -- -- 392
FT Publishing 30 23 26% 13% 56
Interactive Data 54 45 18% 16% 97
FT Group 84 68 21% 15% 153
Penguin 26 18 22% 28% 74
Total continuing 124 86 38% 20% 619
Discontinued -- 7 -- -- 15
Total Operating Profit 124 93 28% 20% 634



North American Education
£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
Sales 713 599 18% 5% 1,667
Adjusted operating profit (16) (14) (14%) (57%) 273


As previously announced, we are bringing together our North American school and higher education businesses under a single organisation. This is Pearson's largest business, with 2007 sales of almost £1.7bn and operating profit of £273m.  Over the past five years, it has increased both sales and profits at a compound annual growth rate of 7% at constant currencies.

Raising student achievement has strong bi-partisan support, with particular concern focused on the attainment of American students relative to their contemporaries around the world in a competitive global economy. As a result government and private spending on education materials, technology and assessment continues to grow, even in difficult economic conditions.

Pearson has the leading position in educational materials, technology, assessment and related services, and a distinctive strategy of connecting those parts to support institutions and personalise learning. We believe that the closer integration of our North American education companies will bring significant opportunities to develop new growth businesses, to share new investments and technologies and to gain further efficiencies.

School Curriculum

  • US School publishing market up 3% in the first half, according to the Association of American Publishers. Industry benefits from healthy new adoption schedule in 2008, with total estimated market opportunity of approximately $880m ($830m in 2007).
  • Pearson takes an estimated 28% share of the total new adoption market, and 31% of the adoptions competed for.
  • Pearson launches enVisionMATH , an integrated print-and-digital elementary mathematics programme (and the next generation of the innovative and highly successful California Social Studies programme). enVisionMATH helps Pearson to a market-leading 38% share of all maths adoptions, including more than 50% in Texas.
  • The Association of Educational Publishers honours two Pearson products, enVisionMATH and Longman English Interactive Online Level 2 , as the year's "most outstanding" materials in the field of teaching and learning.
  • Three Pearson products are named America's best educational software products in the Software & Information Industry Association's 23rd Annual CODiE Awards. KnowledgeBox was named Best MultiMedia Solution, Waterford Early Learning won the Best Course/Classroom Management award, and Waterford Early Learning - Math and Science was named Best Science Instructional Solution.
  • The U.S. Department of Defense awards Pearson a five-year contract to provide elementary-school reading programmes for its schools around the world, including Pearson's Reading Street programme.

Assessment and Information

  • Integration of Harcourt Assessment progressing well with strong performances in state testing, catalogue tests (including the SAT10) and clinical assessments.
  • Continued share gains in state assessments with new long-term contracts in Tennessee and Maryland.
  • Leading position in teacher certification boosted by a three-year renewal in California and a 6-year renewal in Oklahoma.
  • The National Board for Professional Teaching Standards awards Pearson a five-year contract to develop, administer and score its National Board Certification programme for accomplished teachers, covering 25 certificate areas.
  • Major contract wins in Student Information Systems include Dallas (165,000 students),  Baltimore (69,000 students) and Garden Grove, California ( 48,000 students).

Higher Education

  • US Higher Education publishing market up 4% in the first half, according to the Association of American Publishers. Industry benefits from healthy enrolments and good demand for instructional materials, particularly those that are enhanced with technology and customisation.
  • Strong performance from first editions including Chemistry: A Molecular Approach by Nivaldo Jose Tro; The Humanities: Culture, Continuity, and Change by Henry M. Sayre; Psychology: From Inquiry to Understanding by Scott O. Lilienfeld et al; and The DK Handbook, by Anne Frances Wysocki and Dennis A. Lynch.
  • Rapid growth in Pearson's 'MyLab' digital homework and assessment programmes, which now span the curriculum. MyLab products used by more than 1.7m students globally, with student registrations 48% higher than in the first half of 2007. Evaluation studies show that the use of the MyLab programmes can significantly improve student test scores and institutional productivity (
  • New strategic partnerships to provide materials and online learning services to educational institutions. Pearson partners with Rio Salado College in Arizona, which has 450 online classes and 48,000 students, to provide customised materials, and with the Colorado Community College system to provide digital textbooks for 17 courses.
  • eCollege, acquired by Pearson in 2007, increases enrolments by 41% to 1.3m and benefits from strong renewal rates of more than 95% by value. New business wins including The Louisiana Community and Technical College System (in collaboration with our custom publishing business) and e4TN,Tennessee's statewide virtual high school.


International Education
£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
Sales 365 292 21% 4% 735
Adjusted operating profit 20 3 -- -- 92


From 2008 we are reporting International Education as a separate business which makes a substantial contribution to Pearson and has significant future growth potential. Over the past five years, we have increased headline sales at a compound annual growth rate of 14% (from £431m in 2003 to £735m in 2007) and headline operating profit almost eight-fold (from £12m in 2003 to £92m in 2007).

Looking ahead, we expect our International Education businesses to continue to benefit from a series of connected growth trends: increasing public and private spending on education; growing participation rates in elementary, secondary and higher education; the demand for assessment to provide measures of achievement; the potential for technology to enhance learning; an increasing focus on work-based and applied learning; and the growth of English and other international languages.

We believe this business can deliver good organic sales growth and steady margin improvement as we benefit from our growing scale, the adaptation of Pearson content and technology for new markets, and continued efficiency moves.

Our strong start to 2008 reflects a number of key elements of our International strategy:

  • New growth opportunities:including Pearson Research & Assessments, our international test development business which won contracts in Abu Dhabi, Australia and the UK, and Pearson Educational Solutions, which has won its first major UK contract.
  • Cross-border sharing of educational resources:including extensive adaptation of content and technology; the rapid roll-out of the 'MyLab' online homework and assessment programmes; and the development of an international sales organisation for eCollege.
  • Leading the global market for English language learning: including a new online test preparation service at; re-launching the Penguin Readers series of abridged classics with new teacher support materials and digital services; and continuing growth of major global ELT programmes including English Adventure for elementary schools, Total English for secondary schools and Market Leader  (with the FT) and Intelligent Business (with The Economist) for the business market.
  • Continued consolidation and efficiency gains: including the successful integration of Paravia Bruno Mondadori in Italy and good progress in integrating Harcourt businesses in the UK, Australia and New Zealand; warehousing consolidations in Italy, Spain and Japan, and common technology systems.

Key highlights in the first half of 2008 include:


  • Edexcel continues to innovate with the successful introduction of new technologies into the UK examination system, including:
    1. Onscreen marking. In 2008, Edexcel marks 4.1m 'A'-level and GCSE scripts onscreen. This represents 88% of student work marked by examiners.
    2. Online reporting and analysis.Significant roll-out of ResultsPlus, which provides schools and students with secure online access to question-level examination performance data on results day.
    3. Online progress tracking and diagnosis. Launch of ResultsPlusProgress, which will allow teachers to assess student progress before the examination, to predict results and identify areas for development.
  • Edexcel makes a significant investment in providing the UK's new Diploma qualification for 14-19 year-olds. New qualifications in the first five 'lines of learning' (Construction and the Built Environment, Creative and Media, Engineering, Information Technology and Society, Health and Development) will be available from September 2008.
  • 'MyLab' digital homework and assessment programmes were used internationally by more than 90,000 students, up 19% on the first half of 2007, and are nowsold into more than 65 countries worldwide. MyLabs and Mastering Physics, two of Pearson's online education programmes, continue to win international adoptions, including MyMathLab at the National University of Ireland, Galway, MyStatLab at Queen Mary College of the University of London, and MyAccountingLab at the University of Aberdeen. Mastering Physics is also trialled in UK schools.
  • A strong start to the year for our UK school publishing business, driven by increased demand on the back of curriculum reform and market share gains helped by innovative technology and integrated assessment for learning.
  • The University of Oxford launches the Oxford University Centre for Educational Assessment, established by a grant from Pearson, which in an initial 10-year period is supporting the new centre and a Pearson Professor of Educational Assessment.
  • Our non-English language Higher Education businesses continue to enjoy strong growth, helped by translations of new editions of a number of our bestselling US titles.
  • Following its successful deployment in the UK, Pearson pilots the LiveBook concept, which provides interactive whiteboard materials for teachers and CDs for students, in Italy and Spain.

Africa and the Middle East

  • Pearson wins a contract to deliver the Abu Dhabi Education Council's external assessment programme over three years starting in 2009. The tests cover English, Arabic, mathematics and science for students in grades 3 to 11.
  • In South Africa, Maskew Miller Longman (MML), Pearson's 50% joint-venture, successfully launches education technology and services with the popular Focus Exam Bank CD-Rom series in all major secondary school subjects; and a new teacher training unit Pearson Education Achievement Solutions.
  • In Nigeria, the states of Lagos and Bauchi order two million textbooks for mathematics and English; government of Ghana orders new books in English, mathematics, natural science and information technology.


  • In China, Pearson announces the acquisition of two chains of private English-language schools. Learning Education Center provides instruction for children aged five through 12, principally in Shanghai. Dell English offers English-language training to students typically between ages 15 and 35, principally in Beijing.
  • The New York Institute of Finance (NYIF) opens a Beijing office under the name of Pearson Financial Consulting. It will help educate and train China's financial and business professionals through classes, in-company courses and monthly financial forums.
  • In India, Pearson sees strong sales growth during the first semester, particularly in K-12 education and our Higher Education growth benefits from the opening of more than 300 new colleges.
  • In Korea, Pearson Longman wins new adoptions with Avalon - a leading private language school for primary and secondary students - for Tops, a six-level primary course with teacher support and digital services; and for the Penguin Active Reader Series, a series of abridged classics with new teacher support materials and digital services.
  • In Singapore, the government names Pearson as a partner in its FutureSchools@Singapore project. Pearson will contribute a customized version of WriteToLearn, a Pearson product that helps develop reading comprehension and writing skills.
  • In Thailand, Pearson secures its largest technology adoption. The business school of Bangkok's Assumption University purchases 2,000 access codes to software associated with Pearson's Management textbook by Robbins and Coulter.

Latin America

  • Rapid growth in Mexico, Pearson's largest market in the region, with an expanded local-language publishing list and salesforce, and a new local math series for middle schools.
  • In Brazil, which has Latin America's largest and fastest-growing university population, Pearson provides custom publishing services to five leading universities in business, math, science, engineering and several other fields.


£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
Sales 105 104 -- -- 226
Adjusted operating profit 10 11 (9%) (9%) 27

Following the disposal of Government Solutions in 2007 and Data Management (Scanners) in 2008, our Professional education business is focused on publishing for professionals in business and technology, and on testing and certifying adults to become professionals.

Over the past five years, on a continuing business basis we have increased sales at a compound annual rate of 14% at constant currencies and operating profit from £6m in 2003 to £27m in 2007. Over that period, we significantly re-oriented our professional publishing businesses towards long-term growth markets and built our professional testing unit into a profitable industry leader. We see good growth prospects for these businesses, which will benefit from growing demand for work-related skills and qualifications in both developed and developing markets; and from close connections with professional content and customers in other parts of Pearson.

Professional Testing

  • Registration volumes for the Graduate Management Admissions Council test rise 12% worldwide in the first half of 2008, including a 24% increase outside the US.
  • New business wins include contracts to provide test delivery for the American Board of Anesthesiology's certification exams and to deliver nursing exams for the UK's Royal College of Veterinary Surgeons.
  • Pearson VUE announces the transition of The Institute of Internal Auditors certification exam, the Certified Internal Auditor, from paper-and-pencil to computer-based test delivery. The Certified Internal Auditor designation is the only globally accepted certification for internal auditors and will be delivered in English, Japanese, French, Spanish, German and Italian.
  • Pearson VUE partners with NIIT Ltd. of India to expand their certification network in India, extending a range of tests for students throughout the country. In a first phase, VUE and NIIT will set up testing facilities in Bangalore, Chennai, New Delhi, Hyderabad and Pune.

Professional Publishing

  • Three titles from Pearson Technology Group's Addison-Wesley Professional were winners of the 18th annual Jolt Product Excellence and Productivity Awards, including top prize in the Technical Books category for Continuous Integration: Improving Software Quality and Reducing Risk by Paul Duvall with Steve Matyas and Andrew Glover.
  • Two titles from Wharton School Publishing were selected for's Top Ten Editors' Picks: Business for 2007: We Are Smarter Than Me: How To Unleash The Power of Crowds in Your Business, by Barry Libert and Jon Spector; and Firms of Endearment: How World-Class Companies Profit from Passion and Purpose, by Rajendra S. Sisodia, David B. Wolfe, and Jagdish N. Sheth.
  • Scott Kelby, an author with Pearson's Peachpit imprint, is recognized as the top-selling computer book author for the fourth consecutive year, according to Nielsen BookScan data. His books include The iPod Book: Doing Cool Stuff with the iPod and the iTunes Music Store, Fourth Edition, and The Adobe Photoshop Lightroom Book for Digital Photographers.


Financial Times Group
£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
FT Publishing 188 164 13% 8% 344
Interactive Data 186 168 8% 7% 344
Total 374 332 11% 8% 688
Adjusted Operating Profit
FT Publishing 30 23 26% 13% 56
Interactive Data 54 45 18% 16% 97
Total 84 68 21% 15% 153

In recent years, the FT Group has significantly shifted its business towards digital and subscription revenues. We have sold largely print and advertising-based national media companies (Recoletos in Spain, Les Echos in France, FT Deutschland in Germany); acquired digital businesses with international opportunities (Mergermarket,, Money-Media); and invested steadily behind our global and digital businesses including the Financial Times, and Interactive Data.

As a result of this strategy, in 2007 digital services accounted for 63% of FT Group revenues, up from 28% in 2000; in 2007 advertising accounted for 30% of FT Group revenues, down from 52% in 2000. On a continuing business basis, FT Group sales have increased from £506m in 2003 to £688m in 2007, and profits from £39m to £153m.

Looking ahead, we believe that the FT's premium and global position, combined with our digital and subscription businesses, put us in a good position to increase profits at the FT Group in 2008, even in tough macroeconomic conditions.

FT Publishing

  • FT Publishing revenues up 13%, and operating profit up 26% to £30m (£23m in 2007).
  • FT Publishing advertising revenues increase by 2% as good growth in industrial, consumer and luxury categories, including the How to Spend It magazine, offset weakness in technology, corporate finance and recruitment ads at the FT newspaper, and personal finance and mortgage-related advertising at FT Business.
  • Financial Times maintains worldwide newspaper circulation at approximately 450,000 (449,260 average for the January-June ABC period) and wins many awards including Newspaper of the Year at the 2008 British Press Awards.
  • benefits from launch of innovative new access model involving registration for access to more than five articles per month. Subscribers maintained at around 100,000, while registered users increase more than three-fold from almost 150,000 at the end of 2007 to 500,000 at the end of July 2008.
  • Financial Times continues to invest in international expansion and fast-growing markets. It launches a new edition for the Middle East, reflecting the Gulf region's growth as an international finance and business centre; and Rui, a lifestyle and wealth-management magazine for China's fast-growing business elite.
  • Strong performance from Mergermarket with contract renewal rates of almost 90% and new product launches including Debtwire ABS and Debtwire Re-structuring Database.
  • FT acquires Money-Media, which provides online news and commentary for the fund-management industry. Money-Media rolls out Ignites Europe, an online news service for people working with the European cross-border fund industry.
  • The Economist, in which Pearson owns a 50% stake, increases weekly circulation by 9% to 1.3 m (for the July-December ABC period). Operating profit at The Economist Group increases 23% to £44m, and sales increase 8% to £266m for the year ended 31 March 2008.

Interactive Data

  • Interactive Data revenues up 8% and operating profit up 18% to £54m (£45m in 2007) driven by strong sales and approximately 95% renewal rates within its Institutional Services segment.
  • Raises full year guidance to revenue growth in the 8-10% range and operating profit growth within the 11-13% range (headline growth under US GAAP) against previous guidance of revenue growth in the 7-9% range and operating profit growth within the 9-11% range.
  • Pricing and Reference Data continues to generate good growth in North America and Europe. Growth is primarily organic, by providing additional services to customers, but also through bolt-on acquisitions, most recently the announced purchase of Kler's Financial Data Service, a leading provider of reference data to the Italian financial industry.
  • Real-Time Services sees strong growth in its datafeeds business and continued expansion of its Managed Solutions business in the United States. On 1 July 2008, Interactive Data Real-Time Services launched its new generation, high speed data distribution network, designed to manage the anticipated continued rapid growth of data volumes.
  • Continued investment in expanding the breadth and depth of the data covered and products offered, including a new OTC complex derivatives valuation tool to be launched later in 2008; and in the capacity of its real-time infrastructure to allow for the anticipated growth in real-time market data volumes.
  • Interactive Data continues to benefit from growth trends including: heightened scrutiny around the valuation of securities; increased regulation; increasing adoption of low latency data for algorithmic trading; and continuing need to differentiate wealth management offerings with bespoke client interface solutions.


£ millions Half year 2008 Half year 2007 CER growth Underlying growth Full year 2007
Sales 408 367 9% 9% 846
Adjusted operating profit 26 18 22% 28% 74

Penguin is one of the most famous brands in book publishing, known around the world for the quality of its publishing and its consistent record of innovation.

We set out a plan several years ago to grow Penguin's profits significantly and consistently.  That plan has four major parts:

  1. Continued and disciplined investment in author and product development;
  2. Developing Penguin as a globally coordinated publishing organisation, benefiting from its worldwide scale and rapid rates of growth in literacy, education and demand for books in emerging markets;
  3. Innovating with digital technologies to provide new reading experiences, new ways to market and sell books, and more efficient means of production, storage and distribution of content;
  4. Becoming a more efficient organisation, focusing on margin progression, working capital discipline and cash generation.

Penguin's recent progress and its excellent start to 2008 confirm that this plan is working, placing it in a strong position to sustain its publishing and commercial success and achieve its target of double digit margins in 2008.

Penguin's first-half highlights include:

Strong publishing in all markets; top awards in the US, Australia, Canada and India

  • In the US, Penguin leads the industry for #1 New York Times bestsellers in the first half. Penguin's 17 #1 bestsellers include Eckhart Tolle's A New Earth (5.8 million copies shipped), Greg Mortenson's Three Cups of Tea, Michael Pollan's In Defense of Food and Harlan Coben's Hold Tight. Junot Díaz wins The Pulitzer Prize for Fiction and the National Book Critics Circle Award for Fiction for The Brief Wondrous Life of Oscar Wao.
  • In the UK, number 1 bestseller Devil May Care, the new James Bond novel bySebastian Faulks, is the fastest-selling hardback fiction title in Penguin UK's history, with almost 300,000 copies shipped to date. Other bestselling authors included Marian Keyes, Jane Green and Jamie Oliver.
  • In Australia, Penguin is named Publisher of the Year at the Australian Book Industry Awards (and wins four of the seven awards for individual books), growing ahead of its market with bestsellers from Australian authors Tom Winton and Monica McInerney alongside international authors Marian Keyes and Eckhart Tolle.
  • In Canada, Penguin is named Publisher of the Year by the Canadian Booksellers Association. Bestsellers include Ken Follett, Khaled Hosseini, Kim Edwards, Elizabeth Gilbert and Eckhart Tolle.
  • In India, Penguin is the largest trade publisher, is growing rapidly with authors such as Shobhaa De and Amitav Ghosh, and wins the major English language prizes in India's national book awards.
  • Wolf Totem by Jiang Rong, which won the first Man Asian Literary Prize, is published globally by Penguin Group in English including in China. Penguin Classics are launched in both Chinese and Korean.
  • In the second half, Penguin will publish major new books in the US, including titles by Patricia Cornwell, Kathleen Norris, Daniel Silva, Barton Gellman, Clive Cussler and Mary-Kate and Ashley Olsen, while Penguin UK has new works by Zoë Heller, Michael Moore, Jamie Oliver and Twiggy.

Leading in digital innovation

  • Significant expansion of eBook publishing and sales. In the US, Penguin will have 6,500 titles in eBook format by early 2009 and intends to publish new frontlist titles as eBooks. In the UK Penguin intends to publish new titles simultaneously in print and eBook formats and begins a programme to publish its 5,000-title backlist as eBooks.
  • In the US, Penguin publishes Jane Austen's Pride and Prejudice as its first title in a new 'Enhanced eBook' format and debuts in the top 10 on the Amazon Kindle bestseller list. It includes the original book reviews, a chronology of her life, instruction on period etiquette, dancing and recipes and a literary tour of famous Austen sites.
  • Penguin partners with Mobifusion in India to deliver content to consumers via mobile phones.
  • Rapid growth in traffic and sales at Penguin's websites. Unique visitors up to 4m across Penguin's US and UK sites, an increase of around 20%.
  • Penguin wins at the New Media Age Effectiveness Awards for, an online forum where readers blog about many of the best books ever written. Penguin also launches , which allows readers to download and sample the first chapters of all Penguin's latest novels for free.


Except for the historical information contained herein, the matters discussed in this press release include forward-looking statements that involve risk and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in the company's publicly-filed documents, including the company's Annual Report. The company undertakes no obligation to update publicly any forward looking statement, whether as a result of new information, future events or otherwise.