Pearson delivered the strong results for 2010 that they have been predicting, as Penguin "achieved record sales and profits in a challenging and rapidly-changing industry environment."
The trade publishing division had sales of 1.053 billion pounds (up 5 percent from a year ago, and 2 percent on a constant-exchange-basis) and profits grew even more, at 106 million pounds up 26 percent from a year ago. And those margins "were struck after making additional provisions for a number of credit exposures in the book retailing sector, including in relation to Borders in the US." eBook sales were 6 percent of Penguin's overall sales, and still growing at 182 percent over the previous year. For the year ahead, Pearson "expects Penguin to perform in line with the overall consumer publishing industry this year, while we continue to adapt the business to these industry changes."
Penguin was said to be strong across all major divisions. Penguin UK increased market share 2 percentage points, to 9.6 percent, their "best ever" year, and Penguin Canada had another "record" performance as well.
Penguin Group ceo John Makinson noted that their accounting closed last week even though the figures cover 2010, so they already include allowances for the bankruptcies at Borders and REDGroup. "We do feel that we have recognized all of the risks in our balance sheets that we can see," Makinson noted in a phone call.
While "we all recognize that the ebook is a fundamentally more profitable book" with cost benefits for consumer, author and publisher alike, Makinson said "the story here mostly is about improving efficiency and productivity and great publishing." Penguin USA ceo David Shanks reiterated "that our challenge is that the demand for paper product is still great.... This year it's still going to be 85 of the books that are sold. We have to keep putting out the message that the consumer still prefers by a large margin" and "if everybody had to exist purely on their digital profits, there wouldn't be too many publishers around."
Pearson's big North American education division had sales of 2.64 billion pounds, and overall the company reported sales of 5.663 billion pounds, up 10 percent, with adjusted operating profit of 857 million pounds, up 21 percent. As part of that strong profit performance, Pearson is issuing a modest cash bonus to all employees worldwide.
On a side note, Pearson has admitted that it is "uncomfortable" that the Libyan Investment Authority is its fourth-largest shareholder, with a 3 percent stake in the company's shares. The UK government has frozen the British-based assets of of Muammar Gaddafi and his relatives, said to comprise "billions of dollars of investments," but it's unclear whether the order applies to the Libyan Investment Authority as well.
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