Publishing firm Pearson (PSON) slumped 3.5% to 563.4p as full year results once again revealed the impact on the business of dwindling sales of academic textbooks in the US.
The company is spared heavier losses given much of this bad news was spelled out in detail in a January trading update.
Pre-tax profit for 2019 dropped to £232m, down from £498m year-on-year. Revenue fell 6% to £260m and underlying revenue was flat, though the company's adjusted operating profit rose 6% to £581m.
Pearson declared a final dividend of 13.5p per share, up 4% on-year.
PAINFUL ONLINE SWITCH
Turning to its outlook, the company forecast a decline in annual operating profit to between £410m and £490m, after excluding the 25% stake in Penguin Random House that it agreed to sell in December.
Sales, excluding for the US higher education courseware business, were expected to grow at a low single-digit percentage.
The company is trying to transition to cater to students who get an increasing proportion of their learning materials online. However, its digital business in this area is neither as profitable nor growing fast enough to make up for the decline in textbook sales. After today’s latest share price fall, Pearson is down 47% over the last five years.
Numis analyst Gareth Davies says: ‘Pearson has released full year results that should hold no major surprises to the detailed pre-close released in January. Results for the year were a touch soft to us, but we were high versus consensus against which the group is in line.
“Outlook comments again consistent with consensus. We expect to cut our 2020 adjusted operating profit and EPS by c. 5% on the back of guidance today, but would not expect consensus to change materially.
