Pearson sticks to guidance after FT sale

The Financial Times
Adam Jefffery | CNBC

Pearson, the British group selling the Financial Times in a $1.3 billion deal, increased its dividend and confirmed guidance on Friday despite a dip in first-half operating profit, partly on the timing of textbook adoption in the United States.

The company, which is focused on education after agreeing to sell the newspaper to Japan's Nikkei, said first-half operating profit fell 4 percent to 72 million pounds ($112 million).

Read MoreNikkei to buy FT Group for £844m from Pearson

Pearson, which increased its interim dividend by 6 percent to 18 pence a share, said sales rose 1 percent to 2.2 billion pounds.

The company's results are weighted towards the second half, which includes the start of the academic year, and the first-half period contributes only about 10 percent of full-year operating profit.

It said it still expected full-year earnings per share of between 75 pence and 80p, although the sale of PowerSchool in June would reduce EPS by about 1p, while exchange rates could take another 2p off.

Analyst Ian Whittaker at Liberum noted the group had reiterated guidance at the half-year stage in 2014 only to warn later, so the first-half was not a great indicator.

Pearson did not quantify the impact of the sale of the FT, although it said the newspaper contributed about 24 million pounds of net profit.

The sale of the asset would generate net proceeds of between 650 and 700 million pounds, more than analysts expected, Citi said, and if used to pay debt, it could cause a "mild accretion" to consensus EPS.

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