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Pearson reports a 26% drop in adjusted operating profits

Alex De Angelis

British publisher Pearson has reported a 26 per cent drop in adjusted operating profit to £137m following £27m of gross restructuring charges and investment in new product launches.

The Penguin and Financial Times owner, which is attempting to restructure to face off growing digital competition, reported that earnings fell by a third in the first half, while keeping its full-year guidance unchanged.

Its shares were up 5.5 per cent at £13.22 after the company reported revenues rose 5 per cent year-on-year at constant exchange rates to £2.8bn.

Pearson also revealed that it could be in line to sell its financial news and analysis website Mergermarket, having appointed investment bank JP Morgan Cazenove to advise on a sale.

Content and services brought in 64 per cent of total revenue for the FT Group, while advertising accounted for 34 per cent.

The FT has also continued to move to a digital-led business model. Its digital subscriptions increased by 14 per cent compared to the same period last year to stand at 343,000.

Mobile readership has also grown, accounting for more than half of all subscriber content consumption and a third of total page views.

Digital subscriptions at Pearson's Investor Chronicle title were also significantly higher, growing by 45 per cent to 11,528.

Chief executive John Fallon said: "In trading terms, 2013 has begun much as we expected. In general, good growth in our digital, services and developing-market businesses continues to offset tough conditions for traditional publishing."

The publisher is attempting to shift its education business towards fast-growing economies and organise itself into a single, connected company with three geographic market categories: North America, Growth and Core. It says progress on this front is on track.

Pearson has left its full year outlook unchanged, expecting around £150m in 2013 (£100m when including cost savings throughout the year) and adjusted earnings per share of 82.6p before restructuring costs - broadly level with 2012.

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