Pearson, which owns a 25% stake in Penguin Random House, said the global trade publisher had a solid 2018 led by increased audiobook sales and stable print sales. The company benefited from strong sales from the international bestseller Becoming, while a number of its biggest authors, including Jamie Oliver, Dr, Seuss, John Grisham, and Lee Child, had titles that did well. The President is Missing by James Patterson and Bill Clinton was also a major hit, Pearson noted.
The company said that for 2019, it expects a "normalized" publishing performance from PRH and an after-tax contribution of £60 to £65 million to its adjusted operating profit. PRH contributed £68 million to profits in 2018.
The short report on PRH (Bertelsmann will report more detailed results in March) was part of Pearson's announcement of companywide results. Revenue for the company fell 9% in the year to £4.13 billion, due in part to divestitures made by Pearson that reduced revenue by £216 million, while Pearson also had £134 million in negative foreign exchange. Adjusted operating profit was £546 million, down from £576 million in 2017. Once again Pearson's restructuring efforts impacted earnings, with the company reporting its reorganization efforts cut costs by £130 million, which was partially offset by divestitures and the negative impact of foreign exchange.
Pearson chief executive John Fallon said the company "made good progress last year." He noted that Pearson outperformed its cost savings plan and invested in the digital platforms that are making it a "simpler, more efficient, and innovative" company. Pearson reported that digital sales accounted for 34% of total revenue last year, while "digital enabled" sales represented 28% of revenue. Non-digital sales contributed 38% of revenue.
"We are increasingly well placed to guide our customers through a lifetime of learning and help our partners shape the future of education," Fallon said in a statement. "We have a lot still to do, but we expect company wide sales to stabilize this year, and grow again in 2020 and beyond."
