Pearson enjoys underlying growth as digital strategy starts to pay off
Pearson backed its full-year guidance on Friday as it said it saw interim underlying growth across all divisions as it starts to benefit from accelerating its shift to a digital subscription-style service.
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The company said it continues to expect annual adjusted operating profit of between £590m and £640m, as well as a stabilisation of revenue before the end of the current year and a return to top-line growth in 2020.
Pearson, which announced its switch to a Netflix-style digital subscription model last week, also upgraded its adjusted earnings per share guidance from between 55.5p and 61.0p to be between 57.5p and 63.0p, reflecting improvements in the finance charge and taxation at exchange rates at the end of 2018.
This confidence in the coming months comes as the educational textbook publisher reported a drop in interim profit before tax to £33m for the six month period ended 30 June, from £202m in the same period last year, due to the impact of higher restructuring charges and a drop in sales associated with disposals.
Revenue dropped by 2% to £1.8bn, with Pearson attributing this to the disposals of non-core businesses that included the K12 school courseware business, as long as WSE and Utel.
However, underlying revenue increased by 2% as the company's North America, core and growth divisions all registered underlying sales increases as enrolment growth in its online programme management business helped to offset expected declines in US higher education courseware and US student assessment.
Pearson's shares were up 7.13% at 937.80p at 0805 BST.