Dan Sabbagh, Media Editor
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Pearson, the owner of Penguin Books, said yesterday that it had shipped four million copies in a month of a self-help manual after it had been promoted by Oprah Winfrey, the American talkshow host.
The sudden success of the book, A New Earth, will help Pearson to reach a target of boosting profit margins at the once-struggling Penguin to more than 10 per cent this year, as the British company argues that there are good prospects in the books business.
Dame Majorie Scardino, Pearson's chief executive, said: “The one thing you can't do is try to market your books to Oprah - but of the 61 books she has ever promoted, we have done pretty well.” A New Earth is thought to be the fastest-selling title backed by Ms Winfrey.
Oprah's Book Club is the most powerful driver of sales in publishing. Penguin published A New Earth in 2005 and until Oprah's recommendation it had sold 500,000 copies. Since then Penguin has been printing a million copies a week to meet demand.
Pearson's books unit has been one of the weaker-performing businesses in the education publishing-to-Financial Times group. Although Penguin's operating profits rose 12 per cent to £74 million last year, on sales of £846 million, income has never surpassed the £83 million achieved in 2003. Penguin has subsequently been hit by a sharp downturn in US pulp fiction, to which it had been heavily exposed, and problems with a warehouse computer system in the UK.
Its 8.7 per cent operating margin is the lowest in the group and the only one below 10 per cent. However, Robin Frestone, finance director, said that all six businesses would have double-digit margins helped by a mixture of further cost reductions and sales growth.
Leading sellers in 2007 included Alan Greenspan, whose memoir, The Age of Turbulence, sold nearly a million in hardback, with books from Jamie Oliver and Jeremy Clarkson selling strongly in Britain.
Overall, Pearson produced record pre-tax profits of £468 million, up 4.4 per cent on a year earlier - although the weak dollar depressed income by £37 million. Operating profit at the group's flagship education businesses was 9 per cent up on an underlying basis to £404 million.
This year, Pearson said that it expected double-digit growth in sales of textbooks to schools and mid-single-digit growth in higher education. However, the shares eased 17p, despite the upbeat figures, as City analysts worried that the education business may not be recession-proof because it depends largely on spending by US states, whose tax revenue will decline in a faltering economy.
Even so, Dame Marjorie argued that spending on textbooks was safe because “it amounts to 1 per cent of overall school budgets, which mostly go on teachers, and because cutbacks cause a political problem for politicians”.
Pearson has stopped breaking out profit figures for the Financial Times newspaper in isolation, but it did say that profits had improved at the title,where advertising was up by 10 per cent last year and ahead again in the early months of 2008.
All the company's financial publications and services, including its half-share in The Economist and the Mergermarket website, generated £56 million in 2007, up 85 per cent on a like-for-like basis compared with the previous year.
Extracts
The secret of happiness
Being at peace and being who you are, that is, being yourself, are one. The
ego says: Maybe at some point in the future, I can be at peace – if this,
that or the other happens, or I obtain this or become that . . . The ego
doesn’t know that your only opportunity for being at peace is now. Or maybe
it does know, and it is afraid that you might find this out. Peace, after
all, is the end of the ego
Feeling the inner body
If you are not familiar with “inner body” awareness, close your eyes and find
out if there is life in your hands. Don’t ask your mind. It will say: “I
can’t feel anything.” Go to the hands directly, become aware of the subtle
feeling of aliveness in them. It is there. You just have to notice it. You
may get a slight tingling sensation at first, then a feeling of energy or
aliveness
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