Pearson Plc (LON:PSON), the world’s learning company, is today providing an update on Q1 trading.
Underlying revenue up 2%, operating performance on track
· Revenue grew 2% in North America, 4% in Core and was flat in Growth.
· We remain on track to deliver annualised cost savings in excess of £330m1 exiting 2019.
· We completed the sale of our US K12 Courseware business at the end of the quarter.
· Our guidance for 2019, after adjusting for IFRS 16 and the disposal of US K12 Courseware, remains unchanged. We expect to deliver adjusted operating profit of between £590m to £640m.
· This guidance includes a post-IFRS 16 net interest charge of £60m, a tax rate of 21% to give an adjusted earnings per share range of 53.5p to 59.0p. This is based on the exchange rates at 31 December 2018.
· Q1 net debt was down year-on-year at £0.5bn (2018: £0.6bn) on a pre-IFRS 16 basis. On a post-IFRS 16 basis, Q1 net debt was c.£1.2bn.
· We continue to accelerate our digital transformation with momentum in key structural growth opportunities and the launch of a suite of digital products and capabilities for the back to school period this year, including:
o The commercial launch of Revel, our fully integrated digital courseware product, on our new global learning platform
o The introduction of our first AI powered math tutor as a mobile app marketed to calculus students, and
o Ongoing development of our first AI powered essay marker, which will adapt to the professor’s personal style.
John Fallon, Pearson Chief Executive said:
“We are off to a strong start to the year, having laid good foundations in 2018. We continue to make progress against our strategic priorities, and we are bringing exciting new products and capabilities to market in 2019 which will continue to accelerate our move to digital. We expect our sales to stabilise this year and to increase our underlying profit further.”