- English Language Learning sales up 30%
- Company delivers £120 million in cost savings
- £300 million share buyback continues
Shares in Pearson (PSON) were little changed at 964p in morning trading as the education publishing group reported underlying group sales growth of 5% for the full year excluding discontinued businesses which are under strategic review.
GUIDANCE MAINTAINED
The company is expecting an adjusted operating profit performance in line with its current forecast of between £570 million and £575 million for the full year.
Pearson added its financial position ‘remains robust’ with a strong balance sheet, net debt of less than £800 million and a strong 2023 cash performance.
Shore Capital analyst Roddy Davidson was upbeat, commenting: ‘We are pleased to note the robust performance against upgraded guidance and continuing momentum described above - which provides a sound platform for the group’s incoming chief executive (Omar Abbosh – ex-Microsoft and Accenture) and reinforces our view that Pearson is well placed to serve growing demand for learning across a variety of sectors and to enhance its offering by utilising technology.’
GENERATIVE AI TOOLS
Pearson said it was encouraged by how students were engaging with its generative artificial intelligence (AI) study tools and ‘will be expanding the current beta to many more MyLab and Mastering titles by Fall semester 2024.’
Pearson+ also passed the milestone of 1 million cumulative paid subscriptions for the calendar year, while English Language Learning sales increased by 30% for the full year with all three segments contributing to this growth.
Pearson Test of English (PTE) was the outstanding contributor, delivering volume growth of 49% against a backdrop of favourable migration policy in Australia and market share gains in India.
VIRTUAL LEARNING SALES FALL
Other areas of Pearson’s business didn't fare so well with Virtual Learning sales falling 20% for the full year, while Virtual Schools sales declined 2% for the full year with enrolments for the 2023/24 academic year down due to the previously-announced loss of a larger partner school.
Higher Education sales were also down 3% for the full year, in line with expectations, driven by loss of adoptions to non-mainstream publishers in the first half of the year as well as pricing mix.
SHARE BUYBACK CONTINUES
The group said it would continues its scheme to repurchase £300 million of shares, with £206 million of shares bought in at an average price of 918p per share as of 15 January representing 69% of the total programme.
Pearson is due to publish its full year results on 1 March 2024.
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