Operating review Financial review

Operating review
The Financial Times Group
The Penguin Group
Pearson Education
Financial review

Operating review

In 2002, sales increased by 6% to 4,320m and operating profit from continuing operations improved by 67m to 493m, an increase of 18%. Adjusted earnings per share grew to 30.3p, a headline increase of 42%. Operating free cash flow improved by 69m to 305m. Average use of working capital improved by 53m in our book publishing businesses, even as we increased investment in new authors, titles and programmes.

On a statutory basis, Pearson reported a loss before tax for the year of 25m (a 436m loss in 2001) and generated a loss per share of 13.9p (a loss per share of 53.2p in 2001). The loss includes a (non-cash) goodwill charge of 340m. Net borrowings fell by 971m to end the year at 1,408m. The board is recommending a 5% increase in the dividend to 23.4p per share.

SALES total 4,320m $6,955m

OPERATING PROFIT total 493m $794m

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We are the world?s biggest book publisher and we are beginning to make that scale count in our favour. We have combined our book businesses in Australia and Canada and we are moving to share back office operations such as warehousing and distribution in the UK and New Zealand.

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