Pearson warns on earnings as group unveils £150m overhaul

The group’s new chief executive John Fallon, who took over from long-serving Marjorie Scardino in January, said the plan will help deliver faster growth from 2015.

The group issued a rare downgrade to forecasts in January as sluggish advertising and weaker educational funding in developed markets squeezed its profits.

The weakening conditions come at a time of widespread change for the FTSE 100 company.

As well as welcoming a new boss, it is merging its Penguin book publisher with Random House, owned by Germany’s Bertelsmann.

It also faces constant media speculation as to whether it will sell its FT Group, although this was denied by the new chief executive yesterday.

“The key feature of Pearson’s 2012 results was the very weak guidance for 2013 and implied for 2014, which should lead to significant consensus downgrades,” Liberum analyst Ian Whittaker said.

Pearson said full-year adjusted earnings per share fell 3 per cent to 84.2p, in line with its January guidance, on revenue up 4 per cent to £6.1bn. Speculation that Pearson may sell the FT has increased, in part because Mr Fallon has few ties to the newspaper industry. But he dismissed the rumours, calling the FT a valuable part of Pearson.

“I have said the business is not for sale, nor have we initiated, conducted, encouraged in any shape or form, any sort of process whatsoever, nor have I had any conversations with anybody about the sale of the FT,” Mr Fallon said.

The FT also gives it a powerful brand in emerging markets, helping it sell its education products there, he added.

Pearson said it has around £500m for acquisitions.