AGM Statement

Pearson PLC
27 April 2001


PEARSON REPORTS STRONG START TO THE YEAR

At today's annual general meeting, Lord Stevenson, chairman of Pearson plc,
reported that the company is trading well and looking forward to another
successful year. 

Lord Stevenson said: 

'By reshaping our strategy and business operations over the past few years, we
have created a more international company operating in faster growing markets.
 We now have leading positions in our three major businesses which stand us in
very good stead in all markets and in all conditions.  

'Pearson makes the majority of its revenues and profits in the second half of
the year. However, at this early stage, Pearson is trading well and looking
forward to another successful year.'

In an update on business operations, Marjorie Scardino, Pearson's chief
executive, reported that:

Pearson Education generates the majority of its revenue in the second half of
the year, but it has made a promising start and is on course to achieve strong
underlying revenue growth. As the world's leading education company, we are in
prime position to help meet the growing worldwide demand for learning, which
is being fuelled by stronger public and private investment than has been seen
for some time.

US School funding remains buoyant and Pearson Education is capitalising on the
opportunities created by a number of major adoptions. Its new elementary
reading programme is set to be the bestseller in the majority of the seven
states that are adopting new reading programmes this year. The US school
business has also secured major sales of secondary science and language arts
programmes in both open territory and adoption states, and early sales in the
current California mathematics adoption are also encouraging. 

NCS, now an integral part of Pearson Education, has made a good start to the
year, too. The testing business is benefiting from strong statewide demand and
developing its plans to meet the increased emphasis on testing and assessment
across the United States. NCS4School, the newest product in NCS's range of
enterprise software solutions for schools, is performing well in its trial
schools and will be fully launched in the summer. 

The Higher Education & Professional group is benefiting from the debut of
CourseCompass, its new online course management system which is helping to
drive strong growth in adoption and sell-through rates for its major titles.
Sales of text/web programmes covering subjects in math and English, the two
most popular courses, are particularly strong. The professional and technology
publishing group continues to generate many of the leading best-selling
information technology titles, but its sales of that category of books are
depressed by the downturn in US technology markets. 

The International business continues to perform strongly. The schools business
is performing particularly well in Hong Kong, Malaysia, Singapore and Canada;
higher education markets around the world are in good shape; and the English
Language Teaching business, already a leader in Asia, is now growing strongly
in Latin America.  

Learning Network is firmly established as the world's most popular online
learning network (attracting more than 11 million unique monthly users and
generating more than 140 million monthly page views).  It is focusing its
operations more closely on the school and home markets and providing more
products integrated with Pearson Education programmes. It is on track to break
even by the end of 2003.

The Financial Times Group continues to grow, benefiting from its international
and online expansion and its ability to move quickly and flexibly in managing
its cost base.

In March, average daily sales of the Financial Times newspaper increased by 6%
year-on-year to 503,767. In the year to date, the Financial Times newspaper,
along with its sister titles in France and Spain, continues to increase
advertising revenues. However, the advertising outlook remains uncertain and
we continue to manage the cost base of our newspaper operations accordingly.

FT Interactive Data, benefiting from strong growth in institutional markets,
is also in a position to deliver strong revenue and earnings growth. 

The FT Group's internet enterprises  (which include FT.com, its personal
finance and career planning channels as well as its sister sites in France,
Spain and Germany and the Group's stakes in the MarketWatch, Economist and
eSignal online operations) are continuing to deliver year-on-year growth in
online advertising revenues. In this more difficult advertising environment,
all these businesses are moving more quickly to generate revenues from new
products and services. With costs declining as we move from start up to
operational mode, these enterprises will break even by the end of next year
and begin to make returns on the investment thereafter.

The Penguin Group is performing well, driven by its increased investment in
frontlist authors and the acquisition of Dorling Kindersley.

In the US, in the first 16 weeks of the year, Penguin Putnam had 47 titles on
the New York Times bestseller lists, up from 35 in the same period last year.
In the UK, 17 Penguin titles reached the Bookseller Booktrack top 15 in the
first quarter - more than in the first half of 2000. After breaking even last
year, we expect Dorling Kindersley to make a meaningful contribution to
profits this year, and steadily to increase profits in the years ahead.


For further information

John Fallon/ Luke Swanson       Pearson plc              [phone]