PEARSON, the publishing group that owns the Financial Times, said that it was on course to achieve a record year as its core education business outperformed stumbling rivals.

The company said that its education arm improved sales by 6 per cent in the first nine months, although slower growth in its Penguin books division held back overall impovement to 5 per cent.

Advertising at the FT was also up by 10 per cent in the first nine months, but this concealed a slight easing in the third quarter of the year. At the half-year to June, FT advertising revenue growth was 10 per cent.

Dame Majorie Scardino, chief executive, said that the company would produce its “highest ever profits”, beating last year’s £506 million, after what she described as strong performances from all parts of the publishing conglomerate.

However, the company indicated that growth elsewhere would also taper off. Despite the strength in the education business, Pearson cautiously reiterated previous guidance of 3 to 5 per cent full-year growth — amid concerns about the timing of revenues from the state of California, where it supplies a social studies programme to schools.

Sales at Penguin, the publisher of Kiran Desai’s The Inheritance of Loss, winner of the Man Booker Prize, rose 2 per cent in the first nine months, but Dame Marjorie said that the unit would achieve “similar sales growth to 2005” of only 1 per cent for the full year.

As a result, the company’s shares eased 12p to 769p as the nine-month trading statement offered no positive surprises. Analysts observed that Pearson’s education arm was outstripping struggling rivals, who are trying to sell out.

Thomson, the Canadian information group, said last week that it intended to sell its poorly performing education business, amid hopes that it could fetch $5 billion (£2.6 billion). The Dutch publisher Wolters Kluwer is also considering a sale of its education activities amid similar pressure over the need to develop for the electronic era.

Pearson declined to comment on whether it would be an active bidder for the Thomson or Wolters Kluwer units, although the company indicated that it believed that its educational operations had enough scale and know-how to succeed on a standalone basis.

Separately, Pearson’s 50 per cent-owned subsidiary, the Economist Group, unveiled its purchase of Gallery Watch, an online information service that tracks US federal legislative and regulatory approval processes. The business complements the group’s specialist publication Roll Call, which targets American politicans and lobbyists. The sale price was not disclosed.

ROAD TO PROFITABILITY

May 2006: Rona Fairhead, finance director, becomes chief executive of the FT Group, making her front- runner to succeed Dame Marjorie Scardino

February 2006: Financial Times returns to profitability with £2 million operating income

November 2005: Andrew Gowers, the Editor of the FT, is ousted after strategic differences with the parent company

July 2005: Glen Moreno appointed as chairman to replace Lord Stevenson of Coddenham, but company says strategy will not change

April 2005: Lord Stevenson, chairman, concedes the “horrible grizzly truth” that Pearson had underperformed the FTSE 100

March 2005: Penguin described as a “drag on group earnings” after a botched warehouse upgrade led to a profits slump

PEARSON BY NUMBERS

Penguin: sales up 2 per cent

* first nine months 2006

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