Pearson reported Friday morning that its share of adjusted operating profit from Penguin Random House rose 30% in 2015 over 2014, hitting 90 million pounds from 69 million pounds in 2014.The report by Pearson, which owns 47% of the trade publisher, suggests that PRH will post a solid profit gain for 2015 when Bertelsmann, which owns 53% of the company, reports its 2015 financial results next month.
Pearson did not disclose PRH’s revenues in the year, noting only that the company had a “strong performance” in 2015 led by “hundreds” of bestsellers across all its territories. The two biggest successes in 2015 were Grey and The Girl on the Train which Pearson said sold over seven million copies each.
Pearson attributed the large gain in profits in part to operating efficiencies generated through further integration of Random House and Penguin. While Pearson said it expects more consolidation of Penguin and RH in 2016 to yield more cost saving, the company said it expects that those cost reductions may be offset be a decline in e-book sales.
The profit performance by PRH was one of the few bright spots at Pearson which is in the middle of a company-wide restructuring. Earlier this year, the company said it would cut its workforce by about 4,000 positions, a move that reflected unexpected softness in major higher education markets, including the U.S. Pearson said it has started to make the job cuts and expects the majority of the downsizing to be finished by the middle of the year. Pearson expects to save 350 million pounds annually when the restructuring is fully completed.
In addition to downsizing its existing operations, Pearson also sold a number of businesses last year, including The Financial Times.
For 2015, total revenue at Pearson dropped 2%, to 4.47 billion pounds, and the company had an operating loss of 404 million pounds compared to operating profit of 348 million pounds in 2014.
