Pearson profits increase despite the turmoil

The group said its North American education publishing arm, which is the company's biggest business with annual sales of 2.5bn and operating profits of 403m, enjoyed strong growth during the year.

This helped it overcome tougher conditions for FT Group and Penguin, where profits fell by 4 per cent to 187m and 10 per cent to 84m respectively.

Trading conditions in those markets brightened towards the end of the year, although Pearson said it was planning on the basis that some of its sectors will remain subdued throughout this year.

"Even so, we expect Pearson to produce another year of underlying profit growth, helped by the overall resilience of our company and good growth prospects for our businesses in digital, services and emerging markets," it added.

Pre-tax profits rose to 660m, from 585m a year earlier, while Pearson raised its full-year dividend payment by 5 per cent.

Pearson said advertising revenues were "highly unpredictable" but that it expects to see some stabilisation at its FT Publishing division after the sharp declines across the industry in 2009.

Ad revenues at the operation, which includes the national newspaper and the company's 50 per cent stake in the Economist magazine, now account for less than 3 per cent of Pearson's total turnover.

Pearson also expects Penguin to post "another good competitive performance" in the context of a consumer books market that is likely to remain broadly level in 2010.

"Penguin will benefit from its leading position in the emerging market for eBooks and from the efficiency actions taken in 2009," it added.