Trading Update

Pearson PLC
18 December 2000



TRADING UPDATE


Pearson plc, the international media company, today issued its annual update
on current trading for the year ending 31 December 2000.

Our businesses are on track to deliver substantial revenue and operating
profit growth, in line with expectations. We have further accelerated
investment in building the internet enterprises that will help to secure
Pearson's long-term growth and we now expect a faster path to profitability
for these businesses, with the net costs of developing them expected to fall
significantly in 2001 after peaking in the second half of this year.

Trading at Pearson Education continues to benefit from the success of our new
textbook and online programmes.  The US School business is performing well in
adoption states and open territories, with its reading and math programmes in
particular gaining market share.  The US Higher Education business continues
to capitalise on its market leadership, which is helping to mitigate slower
growth rates in some of our professional publishing markets. In International
operations, we are benefiting from stronger growth in Latin American and
English Language Training markets. In the four months since we completed the
acquisition of NCS, it has continued to deliver strong earnings and revenue
growth and we are making good progress to achieve the promised benefits of
combining it with Pearson Education. The NCS acquisition increases the
proportion of our profits earned in the United States, which will allow us to
use accumulated tax losses in the US to reduce marginally our overall tax rate
this year.

FT Knowledge is integrating the Forum Corporation, acquired earlier this year,
and continues to invest in building a leading corporate training and
e-learning company. We are continuing to step up the development of our
Learning Network, which is attracting up to 100 million monthly page views,
adding services to its K-12 (kindergarten to grade 12) channel and launching
new Professional Development and Lifelong Learning channels. We are also
investing in a broadband education initiative to complement the internet
activities of Learning Network.

The Financial Times Group is sustaining the very strong start it made to the
year. In November, the Financial Times newspaper increased its average daily
worldwide sales to 483,000 (an 11% increase year-on-year), and it has
generated vigorous advertising revenue growth throughout the year.  Les Echos
and Expansion, our business and financial newspapers in France and Spain, have
also delivered strong circulation and advertising sales growth. FT Deutschland
is performing very well, beating its circulation and advertising targets. FT
Interactive Data has integrated Thomson Financial Services and merged with
Data Broadcasting Corporation and is growing strongly.


We have accelerated investment in the FT's internet enterprises, which are
delivering very strong traffic and revenue growth. The popularity of FT.com is
rising rapidly with unique monthly users up from 1.1 million in July to 1.7
million in November. FT.com is also developing new premium online and wireless
services. FTMarketWatch, capitalising on its initial success in the UK, has
now launched in Germany. Our FT internet enterprises remain on track to break
even in 2002, some two years ahead of our original expectations.

Penguin's investment in a stronger front-list of new and established authors
has delivered a record number of bestsellers and the business has continued to
improve its operating efficiencies. Dorling Kindersley is trading in line with
our expectations. Its integration with Penguin is proceeding well and it is
proving a rich source of new business opportunities across Pearson.

Following Pearson Television's merger with CLT-Ufa to create RTL Group in
July, the new company is performing in line with expectations, with the full
benefits of combining our production and broadcasting businesses starting to
flow through early next year. Our Spanish media group Recoletos completed its
IPO in October and is trading well.

Following the recent acquisition of NCS and the launch of Learning Network, we
are holding investor seminars on our integrated learning strategies early in
the New Year. The seminars will be in New York on January 24 and in London on
January 26. We will announce our preliminary results on March 5, publish the
annual report early in April and hold our annual general meeting on April 27. 

For further information:

John Fallon/Luke Swanson                             + 44 207 411 2310/2313