Pearson warns of tough conditions as it predicts flat profits

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Penguin books publisher Pearson today warned that “tough market conditions and structural industry change” will continue to affect its businesses this year.

The group, which also owns the Financial Times, last year unveiled plans to merge its Penguin books arm with German-owned Random House in a move aimed at fighting back against Amazon and Apple in the e-book revolution.

It said today that Penguin had benefited from a good fourth-quarter publishing performance, and revenues are expected to be in line with 2011 despite “rapid industry change and tough conditions in the physical book retail market”.

Overall, Pearson expects to deliver an operating profit of about £935 million for 2012, broadly level with the previous year, although profits at the FT Group – which has been hit by weaker advertising sales in the fourth quarter – will be “significantly lower” than 2011.