MAIN NEWS HEADLINES
January 1-15, 2004 Edition
Pearson Projects
Slight Gains
In 2003 Revenues
LONDON/12/16/03–Pearson Plc. anticipates it will post slight gains in earnings this year. Facing a weaker dollar, the tough market, and lower profits in the Professional division, the company continues to perform strongly in most markets. Preliminary results for the 12 months ending December 31,2003 will be announced on March 1, 2004.
Penguin Publishing Group expects to increase underlying revenues by 1 to 2 percent. A strong frontlist performance, particularly in the US and Australia, has been partially offset by tough conditions for backlist sales. Penguin’s cash performance will be affected by the concentration of its publishing schedule in the fourth quarter, pushing collections into next year, and by investment in new authors for 2004 and future years.
Penguin is projected to grow faster than the consumer publishing market, with another strong publishing schedule and the launch of several new imprints in the US.
Pearson Education reports gains in revenues and profits for its School and Higher Education businesses, but its Professional division sales fell below current expectations and also below last years comparative period.
School division revenues will be a little ahead of last year. The basal publishing business has taken the leading share of new US state adoptions and is growing ahead of the industry. A strong competitive performance offset weak trading conditions as state budget pressures continue to affect school funding, especially for discretionary purchases such as supplementary materials and curriculum software.
The Higher Education business, expected to increase revenues by 5-7 percent, is growing faster than the industry for the fifth consecutive year, helped once again by strong publishing, the integration of textbooks and technology, and custom publishing.
Results from the Professional division will reflect the absence of the TSA contract and closeout costs associated with it. Excluding the TSA contract, revenues in the Government Solutions business will show good growth as a result of major contracts with the US Departments of Health and of Justice that began this year.
The Financial Times Group expects to report profits slightly ahead of last year, benefiting from another strong year at IDC. Advertising revenues across the newspapers continue to be erratic. At the Financial Times, advertising has continued to decline year-on-year, despite modest growth in September and good growth in the US. FT’s total advertising revenues are expected to decline 12 percent in the second half and approximately 15 percent for the full year.
Outlook for Pearson Education As a particularly slow adoption cycle combines with state budget pressures, Pearson Education expects the US School publishing industry to decline in the mid-single digits for 2004, followed by a significant rebound in 2005 onwards. In 2004, as in 2003, the US Higher Education industry is expected to fall below its average growth rate of 5-7 percent, but Higher Education is projected to grow ahead of the market, somewhere in the 4-6 percent range. Sales and profits in Professional publishing are projected to be ahead of 2003, despite continued weakness in technology publishing and approximately £10 million of start-up costs relating to new professional testing contracts.
The FT Group predicts a significant profit improvement for 2004, despite uncertainties for advertising spending.
