Pearson reported a forecast-beating swing to profit in the first half on higher sales of school textbooks and advertising at the Financial Times, giving it confidence it would meet annual financial goals.

London-based Pearson, which publishes educational materials, novels and newspapers, said its first-half pretax profit was £48 million (€69.5 million) versus a loss of £33 million a year ago.

Adjusted for disposals and accounting changes, Pearson lost £9 million, narrower than the loss of £16 million a year earlier.

Revenue increased to £1.613 billion from £1.481 billion in the first half of 2004. On an underlying basis, which strips out currency effects and changes to its holdings, Pearson's sales were up 10 per cent.

Because of the seasonal nature of educational publishing, Pearson typically sees more than half its revenue and about 90 per cent of its profit in the second half. About three-quarters of its sales are in North America.

"We still have the majority of the year's trading ahead of us, but the first-half momentum supports our confidence that we will meet our financial goals," chief executive Marjorie Scardino said in a statement. First-half advertising revenues at the Financial Times were up 5 per cent, accelerating from 3 per cent through April, amid a sluggish market.

Pearson said if the growth continued its pink-hued business newspaper would break even for the year."Because the market is erratic, it's hard to predict," she said of the second half. "We've got a positive trendline."

Pearson said it was confident its key school textbook business would grow sales in double digits and improve margins 1 to 2 percentage points as many US schools are ordering fresh materials in 2005. First-half sales were up 19 per cent.The Penguin consumer publishing unit has made a solid start to the year with sales up 5 per cent, Pearson said Penguin this year shifted some of its big titles to the first half in an effort to balance the business. The US paperback market continues to struggle, however.

Ms Scardino declined to say much about Pearson's search for a new chairman. Dennis Stevenson stepped down from the post in February. "We have some excellent candidates," she said. "We want to find exactly the right person and when we do, we'll let the world know."