Pearson, the publishing group, announced yesterday that its profits were continuing to grow on the back of a strong demand for its educational products and increased digital revenues.

Sales last year were up 8 per cent to £4.8 billion and operating profits were up 11 per cent to £762 million.

Pearson said that profits in its education division rose by 11 per cent driven by continued international expansion, greater exposure to digital learning and strong sales in US higher education. However, the US high school market is estimated to have contracted by 4.4 per cent as tighter state budgets have led to cutbacks.

Penguin, the book publishing arm, increased profits by 4 per cent, which the company described as a strong result in a tough retail market.

Pearson's FT Group, which publishes the Financial Times newspaper, increased profits by 12 per cent despite a slowdown in media advertising. The company said that sales of premium content online and higher subscriptions had offset the drop in advertising revenues.

Marjorie Scardino, the chief executive, said: "Over the past five years, Pearson has produced steadily rising sales, profits, earnings, cash and returns. We are particularly pleased to have continued that record in 2008 in the face of a sharp economic downturn."

Pearson said that it would increase its dividend by 7 per cent to 33.8p.

The company expected 2009 to be a tough year but said that it would benefit from a range of actions to reduce costs including laying off about 60 journalists at the FT.

Mrs Scardino said: "We don’t expect economic conditions to improve any time soon, but we do expect our company to remain hardy and aggressive."

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax