Pearson, the education and publishing group which owns the Financial Times, beat analysts’ expectations in 2011 with adjusted earnings per share of 86.5p.
The group’s board has proposed a 9 per cent increase in the dividend to 42p and said it had about £1bn to spend on acquisitions, which would likely to be “bolt-on” in nature.
Pearson said it was expecting growth in all divisions in 2012 despite tough trading conditions around the world. The consensus of analysts’ forecasts for earnings was 84.2p. Last month, Pearson guided analysts to expect earnings of about 85.2p
Dame Marjorie Scardino, chief executive, said: “The external environment provides a testing backdrop for these results, and all our industries face some degree of turbulence.
“But our strategy and long-term planning for change have helped us to another good year to add to our record of persistent outperformance.”
A statement accompanying the full-year results added: “The external environment is likely to remain challenging in 2012, in the face of turbulent macroeconomic conditions and rapid structural change in our industries.”
Pearson’s results, adjusted to take account of currency fluctuations and changes in its portfolio of businesses, showed sales rose 1 per cent to £5.86bn and operating profit climbed 7 per cent to £942m.
On an unadjusted basis, pre-tax profit rose 72 per cent from £670m to £1.15bn.
Net debt rose by 16 per cent to £499m, but this still represented a ratio of only 0.5 times earnings before interest, taxation, depreciation and amortisation, the group said.
The forecast statement predicted growth in sales and operating profit across all divisions.
Pearson said that in its main North American education division it was expecting modest growth in higher education, as college enrolments fell and the market for printed textbooks got tougher. But it added that it was looking for good growth in digital school programmes, even while state budgets came under pressure and suffered purchasing delays brought on by federal policy changes.
Sales in the division in 2011 fell by 1 per cent to £2.58bn but adjusted operating profit climbed 8 per cent to £493m.
Pearson said it was expecting solid growth in international education, where it promised “a series of organic investments in fast-growing segments including digital learning, English language teaching and institutional services” during 2012. Sales for the past year were up 4 per cent to £1.42bn and adjusted operating profits rose 2 per cent to £196m.
Growth is also expected in the professional education arm, which last year saw revenues up 2 per cent to £382m and adjusted operating profit rose 10 per cent to £66m.
At the Financial Times group, Pearson said 2012 profits would not hit 2011 levels because of the sale of its 50 per cent stake in FTSE International and “further actions weighted towards the first half of the year to accelerate the shift from print to digital”. Advertising would be weak.
The FT group saw 2011 sales up 7 per cent to £427m while operating profit, on an adjusted basis, was up 17 per cent to £76m, the best performance of any Pearson division.
Penguin’s operating profits, adjusted on the same basis, rose 8 per cent to £111m on sales of £1.04bn, up 1 per cent on 2010. The group said: “We expect it to perform in line with the overall industry this year, facing tough conditions in the physical bookstore channel but helped by its strong position in digital.”
Shares in Pearson fell 30p or 2.4 per cent to £12.21 in early London trading.