In an Interim Management Statement for Q3 2013, Pearson reported underlying growth (like for like basis) of 2% year on year, but stagnant growth in its North American textbook market due to market weakness and a 2% like for like decline in FT Group. On constant exchange rate basis Pearson’s growth rate was 4%.
Pearson reiterated its previous full-year outlook that adjusted EPS is expected to be broadly level with 2012 adjusted EPS of 82.6p under revised IAS 19, before expensing restructuring costs. For the full year, operating profits will be lower than 2012. Following completion of the Penguin Random House merger on 1 July 2013, Pearson now consolidates its share of Penguin Random House’s post-tax profit into Pearson’s operating profit. (Previously, Penguin’s operating profit was reported before tax.) This accounting treatment reduces Pearson’s operating profit by approximately £25m in 2013, but at the EPS level they gain an equivalent benefit through its tax charge.
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