A return to sales growth in the fourth quarter, boosted by a surge in online learning, helped educational publishing and services firm Pearson (PSON) advance 7.2% to 727.8p.
The company still said it expected to post a substantial drop in annual earnings as the pandemic kept many students away from classes, hurting sales.
Adjusted operating profit for the year through December was expected in the range of £310 million-to-£315 million, the company said. In 2019 it booked an annual adjusted operating profit of £581 million.
Revenue dropped 10%, though had grown 4% in the fourth quarter on a year-on-year basis. Pearson said it achieved incremental in-year cost benefits of £60 million associated with the 2017-2019 restructuring plan, and remained on track for another £50 million of cost efficiencies for 2021.
Recently appointed CEO Andy Bird needs to address the key challenge which has dogged Pearson for several years - namely growing the digital side of the business sufficiently to make up for the loss of lucrative sales of expensive academic textbooks.
Shore Capital analyst Roddy Davidson said: ‘We like Pearson’s financial strength, growing exposure to/substantial sunk investment in digital products and its status as a beneficiary of a positive medium-term outlook for global learning spend.
‘That said, we remain cautious on short-term trading prospects and wait to get a better insight into its new CEO’s plans for the business.’
