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Penguin has best-ever year as Pearson profits leap
28.02.11 | Graeme Neill
Penguin UK had its best ever year in 2010 as parent company Pearson reported a profits increase of 21% to £857m.
For the year ending 31st December, sales at Pearson were £5.66bn, up 10% on 2009. Sales at Penguin were £1.05bn, up 6% on the previous year. Adjusted operating profit was up 26% to £106m. Pearson attributed this to an "outstanding" US performance, driven by a record number of bestsellers, increased market share and expansion in emerging digital platforms and formats.
It said Penguin UK "lead the bestseller lists" and increased its market share to 10%. According to Nielsen BookScan figures, Penguin had a 11.5% share of the market in 2010, although this figure includes DK's business. Penguin e-book sales were 6% of total revenue and e-book sales were up 182% on 2009. Among the bestsellers identified were Jamie Oliver's 30 Minute Meals, Stephen Fry's The Fry Chronicles, Kathryn Stockett's The Help and A History of the World in 100 Objects.
Penguin group chairman and chief executive, John Makinson, said: “We are truly delighted with these results. The achievement of more than £100m in profit represents a landmark for Penguin but of greater significance are the quality and consistency of performance that underpin this result. The company has been gaining market share on every continent by combining an appetite for measured commercial and creative risk with exemplary execution in every department of the business. We believe that these qualities will serve us in good stead as we address the proliferating challenges of 2011."
Pearson said DK was boosted by its 2009 restructure, with sales of Lego Star Wars titles boosting sales and a transfer of cost centres to India increasing margin.
Elsewhere in Pearson it said revenue was up 9% in its education business with adjusted operating profit up 13% to £691m. Digital sales were up 24% to £1.6bn, accounting for 29% of Pearson's total sales. Its North America Education division had a sales increase of 7% to £2.64bn and adjusted operating profit up 16% to £469m. Its International Education business had a sales increase of 19% to £1.23bn with operating profit up 21% to £171m.
Marjorie Scardino, Pearson chief executive, said: "These numbers add up to another excellent year for Pearson. More important than that, they indicate the changing shape and nature of our company: more digital, more efficient, more exposed to fast-growing economies, more focussed on all kinds of learning.
"Our markets will be tough again this year, but we have a proven formula built on investment, innovation and efficiency which we are using to accelerate change in our company and in our markets."