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Pearson Education grew faster than Penguin in 2007, according to parent Pearson, but Penguin saw a greater rise in profits. Penguin's underlying sales growth was 3% in 2007, with underlying profits up by 20%; while Pearson Education saw underlying sales rise by 6%, with profits up by 9%.
The performances helped Pearson's sales increase by 6% to £4.2bn and adjusted operating profit by 14% to a record £634m. Marjorie Scardino, chief executive, said: "This is another record set of results and an excellent performance from every part of Pearson. We continue to reshape Pearson into a more digital, more international and more efficient company, and those changes make us confident that 2008 will be another good year."
Penguin's actual sales slipped marginally, from £848m to £846m in 2007, with adjusted operating profit up to £74m, compared with £66m a year earlier. The result put Penguin's profit margins up to 8.7%; Pearson said that it was on track for double-digit margins in 2008.
Penguin group chairman and chief executive John Makinson, commented: "Penguin's remarkable 2007 performance rewards our determination to rebalance our publishing, rethink our supply chain and refocus as a global organisation. We can now look back at three successive years of double digit profit growth, providing the platform for us to achieve our target of a 10% margin in 2008. Every territory and every division of Penguin has contributed to this sustained improvement in performance."
Pearson pointed to a "successful global publishing performance" led by Alan Greenspan's The Age of Turbulence, and Kim Edwards' first novel, The Memory Keeper's Daughter, as well as an "outstanding year for bestsellers in the US" with titles including Elizabeth Gilbert's Eat, Pray, Love; Khaled Hosseini's A Thousand Splendid Suns; and Ken Follett's World Without End. In the UK, it highlighted Marian Keyes' Anybody Out There?, Jamie Oliver's Jamie at Home, Jeremy Clarkson's Don't Stop Me Now and Charlie Higson's Double or Die.
Pearson Education saw sales rise from £2.6bn to £2.7bn, with adjusted operating profits up to £404m, compared with £383m a year earlier. The result was driven by its school business, where sales grew 6% to £1.5bn, with adjusted profits grew from £184m to £203m. Its higher education unit saw sales fall marginally to £793m, with profits flat at £161m. At its professional division sales were up 9% to £353m, with profits up 11% to £40m (on an underlying basis).
Pearson said that it expected another year of good profit growth, benefiting once again from the "unique breadth of our education business" - from pre-school to adult learning; across publishing, testing and technology; and in the US and around the world. While it said that Penguin's good publishing and trading performance had continued into the early part of 2008.