Pearson expects lower first-half profits

Publisher and education business Pearson said that first-half profits would likely be lower than last year as it starts to phase in 150m pounds of restructuring costs.

Publisher and education business Pearson said that first-half profits would likely be lower than last year as it starts to phase in 150m pounds of restructuring costs.

Nevertheless, the company, which labels itself as the "world's leading learning company", reiterated its forecast for full-year operating profits to be flat on 2012.

Pearson said that trading in the first quarter was in line with its expectations with sales up 3.0% at constant currency at £1.2bn.

Its Penguin division is said to have had a good start to the year with market share gains in all key regions, however, the Financial Times Group is facing "weak" trading conditions for advertising.

The firm said that it expects the external environment to stay "challenging" for its developed world and publishing businesses in 2013 due to a number of cyclical and structural factors: "pressures on education budgets and college enrolments; retail consolidation; the shift in our business model from print sales to digital subscriptions; changing consumer behaviour and a dynamic competitive landscape."

Nevertheless, it said that there is a "considerable growth opportunity" in education, driven by a growing global middle class, adoption of learning technologies, the connection between education and career prospects and increasing consumer spend, especially in emerging economies.

As announced as part of its full-year results in February, Pearson is to recognise £150m in restructuring costs this year in order to "reshape the company to take advantage of these significant growth opportunities".

This investment is an attempt to accelerate the transition from print to digital and from developed to developing economies.

The company also intends to separate Penguin activities from Pearson's core operation in preparation for the subsidiary's merger with Bertelsmann's Random House book publisher, announced in October 2012.

The stock was up 0.61% at 1,156p by 08:23 on Friday morning.

Recommended

Get healthy returns from these three healthcare stocks
Share tips

Get healthy returns from these three healthcare stocks

Professional investor Paul Major of the BB Healthcare Trust highlights three of his favourite healthcare stocks.
25 Oct 2021
Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021

Most Popular

Properties for sale for around £1m
Houses for sale

Properties for sale for around £1m

From a stone-built farmhouse in the Snowdonia National Park, to a Victorian terraced house close to London’s Regent’s Canal, eight of the best propert…
15 Oct 2021
How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
Emerging markets: the Brics never lived up to their promise – but is now the time to buy?
Emerging markets

Emerging markets: the Brics never lived up to their promise – but is now the time to buy?

Twenty years ago hopes were high for Brazil, Russia, India and China – the “Brics” emerging-market economies. But only China has beaten expectations. …
18 Oct 2021