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Monday, 6 March, 2000, 11:35 GMT
Pearson forges AOL link

Shares in UK media group Pearson surged on Monday after it announced an agreement with America Online to set up a new educational network on the internet.

In a world mesmerised by technology, we try to focus on how we can use it.

Marjorie Scardino
Pearson CEO
Reporting pre-tax profits up 15% last year - resulting from strong growth in its education arm and the Financial Times Group - Pearson said it had also agreed deals with several educational net companies.

Pearson said the new relationship with internet service provider AOL could make its education network - a new online consumer portal due to be launched later this year - the preferred online supplier of educational content and learning tools.

The group's chief executive, Marjorie Scardino, said: "In a world mesmerised by technology, we try to focus on how we can use it to transport our rich content and great brands in ways that make life easier, simpler, faster and more personal for our growing bands of customers."

Shares shoot up

Shortly after the announcement, Pearson shares jumped almost 8% to 24.80. They then fell back a little but later climbed again and closed 198p higher on the day at 25.01.

Brokers said the combination of the new deal and good figures was very attractive.

Pre-tax profit before exceptional items rose 15% to 402m, compared with forecasts of 390-413m.

The company also said it made a strong start to the year and was in good shape to deliver further growth.

Learning strategy

Pearson - which is seeking a New York listing for its shares - said it had reached a number of strategic alliances with other internet educational companies including Score Learning, Copernicus Education Gateway and Blackboard.

Pearson will take an equity stake valued at about $20m in Score and a 10% stake in Copernicus, and will also invest in Blackboard.

In 1999, Pearson's headline sales jumped 39% to 3.332bn.

Pearson Education gained market share in its US school and higher education and professional business while the Financial Times Group saw its underlying sales rise 13% to post record profits.

The television division increased profits by 11% while the Penguin Group saw underlying profits rise 23%.

Pearson says it will pay a dividend of 22.5 pence per share, compared with 21 pence last year.

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02 Aug 99 |  The Company File
Pearson to increase web presence
29 Oct 99 |  The Company File
Eyre joins Pearson
10 Jan 00 |  Business
AOL and Time Warner to merge
17 Dec 98 |  The Company File
Granada and Pearson sell BSkyB stake
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