Pearson PLC Pearson 2024 Q1 Trading Update
26 Aprile 2024 - 8:00AM
RNS Regulatory News
RNS Number : 1195M
Pearson PLC
26 April 2024
Pearson 2024 Q1 Trading Update
(Unaudited)
26th April 2024
|
Pearson is on track to achieve 2024 guidance with expected Q1
result and growth momentum for the second half
|
Highlights
·
|
Underlying sales growth excluding
OPM1 and Strategic Review2 of
3%.
|
·
|
Strong operational progress in all divisions and continued
execution momentum across our 2024 strategic
priorities.
|
·
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Continuing to infuse our products with AI and on-track to
include AI features in more than 40 Higher Education titles for the
Fall semester.
|
·
|
Initial £300m share buyback completed; the previously
announced £200m buyback extension has commenced.
|
Omar
Abbosh, Pearson's Chief Executive,
said:
"The year has started well. Financial
performance was in line with our expectations, thanks to strong
execution across the business, and we maintain a sharp focus on
delivering against the priorities that I outlined. The year is
unfolding as we anticipated, and we continue to expect an
acceleration of growth in the second half, which will see us
achieve our guidance for the full year. We look forward to
providing an update on our strategic progress with our half year
results in July."
|
Underlying sales growth of 3%, excluding
OPM1 and Strategic Review2; 2% in
aggregate
·
|
Assessment & Qualifications
sales grew 2% after a particularly strong prior-year performance.
VUE, UK & International Qualifications, and Clinical Assessment
all contributed to growth. US Student Assessment was impacted by
reduced scope, and phasing of some contracts which will normalise
in the second half. Pearson VUE won several new contracts,
supporting pipeline growth, including university entrance tests in
the UK and the teacher licence contract in Georgia. We also renewed
two key contracts with the Project Management Institute and the
American Registry of Radiologic Technologists. Clinical Assessment
saw solid trends and has several product launches planned for the
second half. UK & International Qualifications secured a
contract with the UK Government for England's national curriculum
assessment tests.
|
·
|
Virtual Schools sales increased 4%,
due to the timing of funding upsides, which is expected to
dissipate in Q2. We will be opening another virtual school in
Missouri, in addition to those previously announced as secured in
Pennsylvania and California. We are also on-track to open 19
additional Career Programmes this year. Virtual Learning sales
decreased 4%. As a reminder, this included the previously announced
OPM ASU contract loss, which benefited sales through the first half
of 2023.
|
·
|
Higher Education sales were down 4%,
in line with our phasing guidance. Digital registrations increased
3% versus the prior year, and we are pleased with the engagement we
are seeing from both students and faculty on our AI study tools. We
remain on-track to add this AI feature to more than 40 new titles
for the key Fall sales season, which, along with our partnership
with Forage, is supporting an improvement in our takeaway
wins.
|
·
|
English Language Learning sales
increased 22%, with inflationary pricing in Argentina having a
positive impact which will dissipate through the year as
comparative FX rates normalise3. Excluding this, sales
increased high single digits, in line with full year expectations.
Institutional delivered a very strong quarter. Pearson Test of
English declined slightly due to a strong comparator, and we expect
performance will ramp through the year.
|
·
|
Workforce Skills sales grew 9%, in
line with our expectations, with growth of 13% in Workforce
Solutions. Vishaal Gupta joined Pearson on April 15th to lead the
division.
|
On
track to achieve 2024 guidance
·
|
Expect growth momentum in the second
half of 2024 with the growth of Higher Education and normalised
comparators for the assessments businesses.
|
·
|
In Assessment & Qualifications,
we continue to expect low to mid-single digit sales growth for the
year, with sales growth weighted to H2.
|
·
|
In Virtual Schools, we continue to
expect sales to decline at a similar rate to 2023, given the
previously cited loss of a larger partner school for the 2024/25
academic year. As a reminder, there was a weighting of sales to Q1
from Q2 due to the timing of state funding. We expect to return to
growth in 2025.
|
·
|
In Higher Education,
we remain confident we will return to growth in
the second half and for the full year. We
continue to expect H1 to mirror H2 2023 before the return to
growth.
|
·
|
In English Language Learning, we
continue to expect high single digit sales growth with growth
weighted to the second half given the outstanding performance in
the first half of 2023.
|
·
|
In Workforce Skills, we continue to
expect to achieve high single digit sales growth.
|
Strong financial position
·
|
Pearson's financial position remains
robust, with low leverage and strong liquidity.
|
·
|
Moody's improved its outlook for
Pearson from Baa3 Stable to Baa3 Positive outlook.
|
Share buyback
·
|
We completed the £300m share buyback
programme that was initiated last year and have since commenced the
previously announced £200m buyback extension with £88m purchased up
to 24 April 2024.
|
Financial summary
|
Underlying
growth
|
Sales
|
|
Assessment &
Qualifications
|
2%
|
Virtual Learning
|
(4)%
|
Higher Education
|
(4)%
|
English Language Learning
|
22%
|
Workforce Skills
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9%
|
Strategic
Review2
|
(100)%
|
Total
|
2%
|
Total, excluding OPM1 and Strategic
Review2
|
3%
|
Throughout this announcement growth rates are
stated on an underlying basis unless otherwise stated. Underlying
growth rates exclude currency movements and portfolio
changes.
1 In 2023, we completed the sale of
the POLS business and as such have removed from underlying measures
throughout. Within this specific measure we exclude our entire OPM
business (POLS and ASU) to aid comparison to guidance. As expected,
there are no sales in the OPM business in 2024.
2 Strategic Review is revenues in
international courseware local publishing businesses which have
been wound down. As expected, there are no sales in these
businesses in 2024.
3 In the second half of
2023, the Argentinian peso devalued significantly to the pound
sterling. Pearson instituted inflationary pricing, primarily in
English Language Learning, to offset this impact. As we annualise
the devaluation in the Argentinian peso the inflationary pricing
benefit will reduce in GBP terms.
Contacts
Investor Relations
|
Jo Russell
Gemma Terry
Brennan Matthews
|
+44 (0) 7785 451 266
+44 (0) 7841 363 216
+1 (332) 238-8785
|
|
|
|
Media
Teneo
Pearson
|
Ed Cropley
Laura Ewart
|
+44 (0) 7492 949 346
+44 (0) 7798 846 805
|
Notes
Forward looking statements: Except for the historical information contained herein, the
matters discussed in this statement include forward-looking
statements. In particular, all statements that express forecasts,
expectations and projections with respect to future matters,
including trends in results of operations, margins, growth rates,
overall market trends, the impact of interest or exchange rates,
the availability of financing, anticipated cost savings and
synergies and the execution of Pearson's strategy, are
forward-looking statements. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that will occur in future. They
are based on numerous assumptions regarding Pearson's present and
future business strategies and the environment in which it will
operate in the future. There are a number of factors which could
cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements,
including a number of factors outside Pearson's control. These
include international, national and local conditions, as well as
competition. They also include other risks detailed from time to
time in Pearson's publicly-filed documents and you are advised to
read, in particular, the risk factors set out in Pearson's latest
annual report and accounts, which can be found on its website
(www.pearsonplc.com). Any forward-looking statements speak only as
of the date they are made, and Pearson gives no undertaking to
update forward-looking statements to reflect any changes in its
expectations with regard thereto or any changes to events,
conditions or circumstances on which any such statement is based.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
|
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