UPDATE: Pearson Sees Digital-Fueled Growth In 2012
27 Februar 2012 - 10:50AM
Dow Jones News
LONDON (Dow Jones)--Pearson PLC (PSON.LN) Monday said it expects
to increase sales and profits in 2012 despite a tough market, as
investment in its digital businesses helped drive full-year
adjusted earnings above guidance, although net profit fell.
The company said it expects digital revenue to overtake revenue
from its traditional publishing operations in the forthcoming year
as it looks set to post further growth in sales and operating
profit.
Pearson, which publishes the Financial Times and Penguin Books,
is dominated by its large north American education division--all of
which have been under pressure from the rise in digital media, from
schools using ebooks and online learning, to commuters reading the
newspaper on their tablet computers.
Pearson has been shifting its portfolio to reflect this change
and has made several disposals and acquisitions which will tip the
balance of revenue in 2012 in favour of its digital and services
businesses, enabling the company to grow sales and profits despite
the economic constraints evident in some of its core markets,
especially the U.S.
Sales in 2011 grew 6% at exchange rates to GBP5.86 billion,
boosted by an 18% rise in sales from its digital businesses, which
accounted for 33% of overall sales.
While net profit fell to GBP957 million in 2011 from GBP1.30
billion a year earlier, this was due to larger disposal profits in
the year-earlier period, and adjusting for these one-off items
Pearson reported a 12% rise in operating profit at constant
exchange rates to GBP942 million.
Adjusted earnings per share, which is one of the key figures
tracked by U.K. analysts, rose to 86.5 pence per share from 77.5
pence last time, above raised guidance provided by Pearson last
month.
Chief executive Marjorie Scardino said the company has a
potential war chest of GBP1 billion to spend on further bolt-on
acquisitions this year, which will most likely be used to grow its
emerging markets business where the company has already invested in
education in fast-growing economies like India, China, Brazil and
South Africa.
International education revenue rose to GBP1.42 billion in 2011
from GBP1.23 billion in 2010.
And while international education is expected to show good
growth in 2012, U.S. education is forecast to grow more modestly as
state budgets are squeezed and traditional school textbook sales
come under pressure amid the transition to digital media and
services.
North American education sales in 2011 slipped slightly to
GBP2.58 billion from GBP2.64 billion the year earlier.
Still, Pearson's shift in focus to digital media means it is
widely involved in the transition of U.S. educational tools into
online and digital formats, and last month announced the
publication of several textbooks redesigned for the Apple Co Inc's
(APPL) iPad.
However Scardino was quick to point out that its digital reach
is far wider than Apple's, going beyond content, operating systems
and devices to encompass the broader aspects of teacher and
technology development rather than just "beautiful textbooks".
Speaking to reporters on a conference call Monday Scardino also
repeated her assertion that the Financial Times is not for sale,
after media reports last month suggested the company was in talks
with Thomson Reuters about selling the flagship paper.
As other traditional print newspapers struggle to hold onto
subscription and circulation revenue, digital subscriptions at the
FT rose 29% last year and accounted for around 44% of total paid
circulation. Sales at the FT Group rose to GBP427 million from
GBP403 million last year.
Pearson declared a final dividend of 28 pence a share, taking
the total for 2011 to 42p, up from 38.7p in 2010.
At 0901 GMT, Pearson shares were down 2.2% or 27 pence at 1224
pence. The stock has risen almost 20% over the past 12 months as
Pearson has upgraded its outlook steadily throughout the year.
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290;
lilly.vitorovich@dowjones.com
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