The result was significantly higher than the £271m analysts had predicted, and by midday shares in Pearson leapt almost 10.91% to 854p, a rise of 84p, helping the FTSE100 index rise by 61 points to 5229.5.
The advertising squeeze hit Pearson's newspaper publishing businesses the hardest, with ad revenues down by 20% at the Financial Times for the full year. The volume of ads carried was down even more steeply, by 29%.
Pearson also said that there had been no improvement in ad sales in January and February of this year.
Its French newspaper, Les Echos, was similarly hard hit, reporting advertising volumes down by 21% and ad revenue down by 20%.
The FT Group's internet businesses performed better however. The division, which includes the FT.com website, generated revenues of £51m, up 21% on 2000. Pearson said that FT.com is on track to break even by the fourth quarter of this year and make a growing contribution to profits in the years ahead.
Full-year operating profit for the FT Group, including the internet businesses, showed a decline of 27%, from £98m last year to £72m this year.
Marjorie Scardino, chief executive of Pearson, said: "The recession in advertising and technology markets meant that it was not possible last year to build on the steady improvement in performance, which our shareholders have come to expect."
She added: "Good growth in our less cyclical businesses allowed us to keep the overall level of sales and profit roughly level with the year before and, as we look ahead into 2002, we are confident of resuming our progress whatever the economic climate."
Other divisions of Pearson performed well, with Penguin enjoying sales growth of 9%. However, profits in the education division were down by 5% for the full year. Pearson wrote off £153m, £50m of which was related to the acquisition of publisher Dorling Kindersley.
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