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Tag: PSON

  • Pearson Plc on track to deliver 2025 guidance

    Pearson Plc on track to deliver 2025 guidance

    Pearson Plc (LON:PSON) has announced its Interim Results for the six months to 30th June 2025 (Unaudited).

    Continued strategic and operational progress against medium term strategy. On track to deliver 2025 guidance with stronger growth expected in H2.  

    Financial Highlights

    £mH12025vs H12024£mH12025H12024
    Business performanceStatutory results
    Sales1,722+2% 1Sales1,7221,754
    Adjusted operating profit242+2% 1Operating profit240219
    Operating cash flow126£(3)mProfit for the period166158
    Free cash flow156+£129mNet cash generated from operations188185
    Adjusted earnings per share24.5p(4)%2Basic earnings per share24.8p23.1p

    Highlights

    · Group sales1 up 2% underlying with each business unit performing broadly in line with our expectations.

    · Adjusted operating profit1 up 2% underlying to £242m.

    · Strong free cash performance up £129m to £156m, including the receipt of £114m State Aid tax recovery.

    · Interim dividend up 5% and £350m share buyback well underway, with ongoing balance sheet strength.

    · On track to deliver 2025 guidance with stronger growth expected in H2.

    · Continued strategic and operational progress, including:

    o Strategic partnerships with Microsoft, AWS, and most recently, Google Cloud, progressing AI transformation agenda

    o Enterprise business building momentum, with new partners such as HCLTech

    o Continuing to develop product suite and apply innovative technologies including new “Go Deeper” feature within our AI-powered study tools and launch of Pearson English Express Test

    o Accelerating access to adjacent markets, with a strategic collaboration with McGraw Hill in formative assessments

    o Completed the acquisition of eDynamic Learning, adding a core pillar to our Early Careers strategy

    Omar Abbosh, Pearson’s Chief Executive, said:

    “We are on track to deliver the three priorities we set out for the year, with performance to date in line with our expectations, and are confident of stronger growth in the second half. We are making rapid progress with bringing AI-powered products to market and are scaling and enhancing our enterprise business with a range of new partnerships and deals. Our sharp focus on rigorous execution and continuous innovation is driving progress against our strategy, improving Pearson’s agility, efficiency and resilience, and positioning us to deliver consistent mid-single digit sales growth over the medium term.”

    Group sales1 up 2% underlying in H1 2025

    ·     Assessment & Qualifications sales were up 2% with strong growth in Clinical Assessments and UK & International Qualifications, partially offset by declines in Pearson VUE and US Student Assessment. Pearson VUE decline was driven by the pause in a contract delivered in 2024 which will recommence in H2 2025, and headwinds in PDRI, which has been impacted by US federal government hiring and spend reductions which we expect to continue in the second half.
    ·     Virtual Learning sales were down 1%, as expected, due to the final portion of the impact of previously announced school losses. 2024/25 academic year enrolments increased 5% in the Spring semester on a same school basis, with favourable retention trends, underpinning our confidence in returning to growth in H2.
    ·     Higher Education sales were up 4%, benefiting from growth in Inclusive Access of 21% and US digital subscriptions of 3%. We continued to see good monetisation of our Study Prep tool, formerly known as Channels, and ongoing engagement with our AI-powered study tools.
    ·     English Language Learning sales were down 3%, in line with expectations, with Institutional impacted by a strong comparator period in H1 2024.  Pearson Test of English (PTE) was flat against the prior period, performing well against a tough market backdrop.
    ·     Enterprise Learning & Skills sales were up 4%, with another solid performance in Vocational Qualifications and Enterprise Solutions building momentum.

    Adjusted operating profit1 up 2% on an underlying basis to £242m

    ·     Underlying performance driven by operating leverage on sales growth partially offset by inflation.
    ·     On a headline basis, profit was down 3% with positive underlying performance more than offset by translation currency headwinds. First half adjusted profit margin was flat against the prior period at 14% (H1 2024: 14%).
    ·     Adjusted net finance costs increased to £24m (H1 2024: £21m). The effective tax rate on adjusted profit before tax increased to 24.5% (H1 2024: 23.6%).
    ·     Adjusted earnings per share declined to 24.5p (H1 2024: 25.6p) with positive underlying trading performance, and a reduction in share count due to the share buyback programmes, more than offset by currency headwinds and increased interest.

    Good cash performance

    ·     Operating cash flow was in line with the prior period at £126m (H1 2024: £129m) with continued good working capital management offsetting currency headwinds.
    ·     Free cash flow was again strong up £129m to £156m (H1 2024: £27m) given the operating cash performance and the receipt of £114m State Aid tax recovery, inclusive of interest, in the period.

    Strong balance sheet supporting continued investment and shareholder returns

    ·     Net debt decreased £0.2bn to £1.0bn at 30th June 2025 (H1 2024: £1.2bn) as free cash flow was partially offset by dividends and the share buyback.
    ·     Proposed interim dividend of 7.8p (H1 2024: 7.4p), represents an increase of 5%.
    ·     Previously announced £350m share buyback programme well underway and is expected to complete in H2. As at 30th June 2025, £169m of shares had been repurchased representing 48% of the total programme.
    ·     Secured new three-year, $800m revolving credit facility, enhancing our liquidity and strategic flexibility.

    Statutory results

    ·     Sales decreased 2% on a headline basis to £1,722m (H1 2024: £1,754m) with currency movements partially offset by positive underlying business performance.
    ·     Statutory operating profit increased 10% on a headline basis to £240m (H1 2024: £219m) driven by operating leverage on sales growth, gains on disposals and the reversal of impairments on property assets, partially offset by inflation and currency headwinds.
    ·     Net cash generated from operations of £188m (H1 2024: £185m).
    ·     Statutory earnings per share of 24.8p (H1 2024: 23.1p).

    Continued operational and strategic progress

    Driving performance in the core business

    ·     In Assessment & Qualifications, Pearson VUE won several new contracts with continued strong customer retention supporting future growth. US Student Assessment also successfully renewed and extended several key contracts in the period. In UK & International Qualifications we continued to scale internationally. In Clinical Assessments we expanded our customer set with our first statewide adoption of our digital offering. The application of AI across our products continued with the launch of an AI-powered GCSE Exam Practice Assistant, as part of our collaboration with AWS.
    ·     In Virtual Learning, we completed the rollout of our new enrolment portal which we expect to support sales growth in the second half of the year. We are also embedding our career academies across the network ahead of fall back to school and are on track to open two new schools in H2 taking our total number of schools up to 42. We also successfully secured all six of our long term school contracts being renewed in H1. We continue to apply innovative technologies through integrating AI into our study tools, driving higher course scores and end-of-semester pass rates.
    ·     In Higher Education, we continued to build upon the successful monetisation of our Study Prep tool which we expanded into international markets in the first half of this year. We continue to rollout our AI-powered study tools across disciplines – including our new “Go Deeper” feature, which further supports students with engagement, new cognitive skills and higher order learning outcomes.
    ·     In English Language Learning, we announced a partnership with BorderPass, expanding our PTE go-to-market reach for international students and skilled migrants in Canada. We are also launching our new Pearson English Express Test which expands our addressable market, responding to demand for a trusted, accessible test for US-bound learners. Within Institutional we continue to expand internationally with customer wins in LATAM. We continue to make progress on the application of innovative technologies with the recent launch of AI-powered Smart Lesson Generator and Digital Language Tutor.
    ·     In Enterprise Learning & Skills, Vocational Qualifications delivered a solid performance in the period with several new contract wins supporting pipeline growth, including apprenticeship courses with the UK Ministry of Defence, T Levels in Health and Science, and International BTEC expansion. Within Enterprise Solutions we announced strategic partnerships with Microsoft, AWS and Google Cloud and are building momentum in our Enterprise approach, with new partners such as HCLTech.  We have made enhancements to our talent assessment platform, TalentLens, through combining capabilities with PDRI’s secure and scalable Palladium offering. We have also enabled third party credential uploads onto the Credly platform, to advance our goal of Credly becoming the most complete source of verified learning and skills data globally.

    Progress in unlocking faster growth adjacent market opportunities

    ·     Higher Education recently completed the acquisition of eDynamic Learning, a leading Career and Technical Education (CTE) curriculum solutions provider for an enterprise value of $225m, enabling us to broaden capabilities and scale our position in the fast-growing Early Careers space.
    ·     We have operationalised our dedicated K-12 sales team within Higher Education, enabling us to expand and strengthen customer relationships with US school administrators as the demand for college and career readiness programmes grows.
    ·     Pearson VUE successfully launched the Pearson Skilling Suite and continues to make progress building out its test prep business.
    ·     Within US Student Assessment we announced an exclusive partnership with McGraw Hill to integrate our leading interim assessment capabilities directly into McGraw Hill’s K-12 curriculum solutions, unlocking go-to-market opportunities in formative assessment.

    Outlook

    Reaffirm 2025 guidance

    ·     We continue to expect sales growth and adjusted operating profit in line with market expectations4 for 2025 with stronger sales growth in H2, in particular in Q4. We outline our 2025 guidance later in this release.
    ·     The acquisition of eDynamic Learning is not expected to have a material impact to 2025 guidance given near term integration costs and the acquisition accounting for deferred revenue.

    Medium term outlook

    ·     Beyond 2025, Pearson is positioned to deliver a mid-single digit underlying sales growth CAGR, sustained margin improvement that will equate to an average increase of 40 basis points per annum and strong free cash conversion5, in the region of 90% to 100%, on average, across the period.
  • Pearson Plc on track with full-year guidance

    Pearson Plc on track with full-year guidance

    Pearson Plc (LON:PSON) has announced its Q1 2025 Trading Update (Unaudited).

    Pearson on track to deliver 2025 guidance1 with expected Q1 result and momentum building for the second half

    Highlights

    ·     Underlying Group sales up 1%, with growth expected to accelerate in the second half of the year
    ·     All business units performing in line with expectations; strong start for Higher Education with underlying sales up 6%
    ·     Good progress against our 2025 strategic priorities, including:
    o Expanding professional learning capabilities with our new Pearson Skilling Suite
     o Continuing to lead on the application of innovative technologies, with the launch of an AI-powered Smart Lesson Generator
     o New contract wins in Enterprise Learning & Skills; including with UK Ministry of Defence
     o Launch of redefined Pearson brand to embrace the future of learning
    ·     £350m share buyback programme launched and progressing; £0.1bn State Aid recovery received in full

    Omar Abbosh, Pearson’s Chief Executive, said:

    “We continue to make good progress against our strategy, supporting our medium term growth outlook. We are confident of delivering on our expectations for the year given our clear path to achieving stronger growth in the second half, whilst we recognise the heightened uncertainties around the global economy.

    Financial and operating performance in our smallest quarter was in line with our plans and we continue to build AI enhanced offerings across the business and make progress on our Enterprise initiatives.”

    Underlying Group sales growth of 1% in Q1 2025

    ·     Assessment & Qualifications sales were up 1%. Pearson VUE declined slightly, with growth expected to be weighted to H2 driven by the timing of new contracts and the test prep business building during the year, supported by the recent launch of the Pearson Skilling Suite programme. Clinical Assessment grew due to the continued traction of our products in the market, with further new product releases planned this year, and digital product growth. US Student Assessment saw a small decline due to changes in programme services and timing of delivery. UK & International Qualifications sales benefitted from International growth.
    ·     Virtual Learning sales decreased 4%, in line with guidance, reflecting the impact of previous partner school losses and timing of funding upsides in the prior period. 2024/25 academic year enrolments increased by 5% in the Spring semester on a same school basis, with positive retention trends.
    ·     Higher Education sales were up 6% benefitting from the continued innovation and roll out of AI study tools for students and educators and the ongoing successful monetisation of the Channels product. In the quarter, there was growth of 22% in Inclusive Access and 4% in US digital subscriptions. In our International business, 25 AI translated titles were made available for Spring semester courses, expanding the reach of Pearson learning experiences faster and more efficiently.
    ·     English Language Learning sales decreased 6%, in line with guidance. Institutional declined due to a strong comparator period in Q1 2024, and we expect performance to improve in Q2 and beyond. Pearson Test of English (PTE) performed well against a tough market backdrop and despite a decline in volumes we grew the business. We continue to lead on the application of innovative technologies with the recent launch of AI-powered Smart Lesson Generator and Digital Language Tutor.
    ·     Enterprise Learning & Skills sales were up 1%. Vocational Qualifications delivered a solid performance with new contract wins supporting pipeline growth, including apprenticeship courses with the UK Ministry of Defence and T Levels in Health and Science. Enterprise Solutions announced strategic partnerships with Microsoft and AWS in the quarter as we build momentum in our Enterprise approach and related sales capability.

    On track to achieve 2025 guidance and medium term outlook unchanged

    ·     We expect sales growth and adjusted operating profit in line with market expectations1 for 2025. We expect low single-digit sales growth in H1 with stronger growth in H2. We outline our previously issued 2025 guidance later in this release.
    ·     Beyond 2025, Pearson is positioned to deliver a mid-single digit underlying sales growth CAGR, sustained margin improvement that will equate to an average increase of 40 basis points per annum and strong free cash conversion2, in the region of 90% to 100%, on average, across the period.

    Strong financial position

    ·     Pearson’s financial position remains strong, with low leverage and strong liquidity.
    ·     The £0.1bn previously paid in relation to State Aid was recovered in full during Q1 2025.
    ·     In March 2025 we commenced our £350m share buyback programme, with £65m purchased up to 30th April 2025.

    Executive Change

    ·     Dave Treat, Pearson’s Chief Technology Officer, has assumed leadership of the company’s digital and technology operation alongside his current architectural and innovation responsibilities, effective 7th April 2025. Dave joined Pearson last July and will play a crucial role in scaling Pearson’s AI offerings, bolstering our innovation pipeline, and driving collaboration across different business units.
    ·     Marykay Wells, who led the Digital and Technology team as Chief Information Officer, decided to leave Pearson, effective 4th April 2025. We want to thank Marykay for her work on our technology foundations and capabilities.

    Financial summary

    SalesQ1 2025 Underlying growth
    Assessment & Qualifications1%
    Virtual Learning(4)%
    Higher Education6%
    English Language Learning(6)%
    Enterprise Learning & Skills1%
    Total1%

    Throughout this announcement growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude currency movements, and portfolio changes.

    2025 guidance summary

    Underlying Sales growthGroupIn line with market expectations1. We expect low single-digit sales growth in H1 with stronger growth in H2.
    Assessment & QualificationsSales to grow low to mid-single digit. Growth will be H2 weighted with new and renewed contracts and the test prep business building during the year.
    Virtual LearningSales to decline in H1 given the final impact of previous school losses and the timing of funding in the previous year. Return to growth in H2 and the full year driven by enrolment increases, partially from new school openings, for the 25/26 academic year.
    Higher EducationSales growth in 2025 will be higher than in 2024 as we build on the successful results of our sales team transformation and product innovations, particularly using AI. Growth will be relatively stable throughout the year.
    English Language LearningSales growth will moderate given the likely impacts of elections on immigration rates in 2025 affecting our PTE business, which is expected to decline in the year. Q1 declined in line with expectations and we expect growth to increase each quarter thereafter. We remain confident in the medium term outlook given demographic projections.
    Enterprise Learning & SkillsSales to grow high single digit with Vocational Qualifications seeing solid growth and the addition of several new contracts for Enterprise Solutions. Growth will increase quarter on quarter.
    Group ProfitAdjusted Operating ProfitIn line with market expectations1. 
    InterestAdjusted net finance costs of c.£65m reflecting the impact of the Education Bond and £350m share buyback programme which commenced in March.
    Tax rateWe expect the effective tax rate on adjusted profit before tax to be between 24% and 25%.
    Cash flowWe expect a free cash flow conversion2 of 90-100% plus the £0.1bn State Aid repayment which was received in full during Q1 2025.
    FXEvery 1c movement in GBP:USD rate equates to approximately £5m adjusted operating profit impact.

    12025 consensus on the Pearson website dated 27th January 2025; underlying sales growth 4.4%, adjusted operating profit of £656m at £:$ 1.23.  The average £:$ rate for Q1 2025 was 1.27, which if held for the full year would imply an updated adjusted operating profit consensus of c.£636m, applying the FX guidance stated above.

    2Free cash flow conversion calculated as free cash flow divided by adjusted earnings.

  • Pearson Plc reports strong balance sheet, supporting shareholder returns

    Pearson Plc reports strong balance sheet, supporting shareholder returns

    Pearson plc (LON:PSON) has announced its 2024 Preliminary Results (unaudited).

    Confident in outlook building on year of good financial and strategic delivery. Further progress on AI and Enterprise priorities with new strategic partnership with AWS. Strong cash generation and financial position support launch of new £350m share buyback.

    Financial Highlights

    £m2024vs 2023£m20242023
    Business performance  Statutory results
    Sales (growth ex. OPM3 and Strategic Review4)3,552+3%1Sales3,5523,674
    Adjusted operating profit600+10%1Operating profit541498
    Operating cash flow662+£75mProfit for the year435380
    Free cash flow490+£103mNet cash generated from operations811682
    Adjusted earnings per share 62.1p+7%2Basic earnings per share64.5p53.1p

    Highlights

    ·     Underlying Group sales growth1 of 3%, excluding OPM3 and the Strategic Review4 businesses.
    ·     Group adjusted operating profit of £600m, up 10% underlying1 with 130bps margin expansion from 15.6% to 16.9%, underpinned by sales growth and cost efficiencies.
    ·     Free cash flow of £490m representing free cash flow conversion of 117%5.
    ·     Full year dividend per share up 6% to 24.0p. Announcing intention to commence a £350m share buyback.
    ·     Positive outlook for 2025 in line with market expectations6. Reiterating medium term guidance for mid-single digit underlying sales growth CAGR and sustained margin improvement that will equate to an average increase of 40 basis points per annum.
    ·     Accelerated roll out of AI across our product offering – remains a key priority in 2025.
    ·     Further Enterprise momentum with new strategic partnership with AWS
    oExtending the commercial relationship between Pearson VUE and AWS;
    oExpansion of AWS Cloud infrastructure and AI capabilities to further enhance and scale our learning products and services; and
    oCollaboration on joint go-to market activities to drive growth across a range of learning experiences.

    Omar Abbosh, Pearson’s Chief Executive, said:

    “2024 was another year of delivery and strategic progress for Pearson. The application of innovative technologies, like AI, in our learning experiences, alongside a sharper focus on how we go to market, is building good momentum across our businesses.   

    “We also continue to focus on expanding our presence in the highly attractive Enterprise skills market at a time where Pearson can play an important role in helping bridge the critical skills gap that impacts the economy, workforce and individuals. Today’s strategic partnership with AWS is another example of how in joining forces with significant industry players we can reach more learners and provide them with the tools they need to succeed.

    “We are pleased to announce our intention to commence a £350m share buyback programme. This initiative underscores our strong cash position and confidence in Pearson’s future.  We are well set up to deliver our financial guidance, allowing for further investment and attractive returns for shareholders.”

    2025 priorities

    ·     Deliver on 2025 market expectations6 for underlying Group sales growth, adjusted operating profit and cash flow;
    ·     Continue to lead on the application of innovative technologies, like GenAI, in our learning and assessment experience platforms; and
    ·     Grow Pearson’s business across the Enterprise customer segment.

    2024 Financial Performance

    Underlying sales growth1 of 3%, excluding OPM3 and Strategic Review4 businesses; 2% in aggregate

    ·     Assessment & Qualifications delivered a solid performance across all sub business units, with sales up 3% for the full year and accelerating in the second half of 2024.
    ·     Virtual Schools sales decreased 1%, due to the previously announced partner school losses, 2024/25 academic year enrolments were up 4% on a same school basis and we also opened 3 new schools. Virtual Learning sales declined 4% attributable to the final portion of the OPM ASU contract in the first half of 2023.
    ·     Higher Education returned to growth with sales increasing 1% driven by continued gains in adoption share, enrolments, and pricing, partially offset by mix impacts.
    ·     English Language Learning delivered a strong performance with sales growth of 8%, driven by Institutional, with Pearson Test of English (PTE) performing well against a tough market backdrop.
    ·     Workforce Skills sales grew 6%, with a solid performance in both Vocational Qualifications and Workforce Solutions.

    Adjusted operating profit1 up 10% on an underlying basis to £600m

    ·     Underlying performance driven by sales growth and cost efficiencies, partially offset by investment and inflation. Adjusted operating profit margin rose to 16.9% (2023: 15.6%).
    ·     Headline adjusted operating profit growth was 5% reflecting business performance partially offset by currency movements and some portfolio changes.
    ·     Adjusted net finance costs increased to £45m (2023: £33m). The effective tax rate on adjusted profit before tax increased to 24.4% (2023: 23.0%).  
    ·     Adjusted earnings per share increased 7% to 62.1p (2023: 58.2p) reflecting adjusted operating profit growth and the reduction in issued shares as a result of share buybacks, partially offset by increased interest and tax.

    Excellent cash performance

    ·     Operating cash1 inflow increased on a headline basis from £587m in 2023 to £662m in 2024, representing excellent cash conversion of 110%. This increase is reflective of the trading performance of the business and favourable working capital movements.
    ·     This operating cash performance and a reduction in below the line reorganisation costs drove an increase in free cash flow from £387m in 2023 to £490m in 2024, a free cash flow conversion of 117%5.

    Strong balance sheet supporting continued investment and shareholder returns

    ·     Year-end net debt of £0.9bn (2023: £0.7bn), with free cash flow more than offset by dividends and share buybacks. Net debt / adjusted EBITDA ratio of 1.1x (2023: 1.0x).
    ·     Proposed final dividend of 16.6p (2023: 15.7p) which equates to a full year dividend of 24.0p (2023: 22.7p) an increase of 6% compared to 2023.
    ·     In 2024 we completed a £500m share buyback which commenced in September 2023, reducing our share count by 7%. Consistent with our capital allocation framework and strong free cash flow we are announcing our intention to commence a £350m share buyback.
    ·     Issued a £350m Education Bond providing long term financing for the business.
    ·     Both Moody’s and Fitch upgraded Pearson’s long-term issuer ratings, moving the outlook to stable.
    ·     Return on capital was 10.4% (2023: 10.3%) with earnings increase counterbalanced by FX changes.

    Statutory results

    ·     Sales decreased 3% on a headline basis to £3,552m (2023: £3,674m) with currency movements and portfolio changes offsetting underlying business performance.
    ·     Statutory operating profit increased 9% to £541m (2023: £498m) driven by increased trading profits, a reduction in property and intangible amortisation charges, a lower year on year net loss from acquisitions and disposals, partially offset by one off UK discretionary pension charges.
    ·     Net cash generated from operations of £811m (2023: £682m).
    ·     Statutory earnings per share of 64.5p (2023: 53.1p).

    Driving performance in the core business, infusing AI into our products and services and sharpening focus on the Enterprise market

    ·     In Assessment & Qualifications we continued to demonstrate good financial performance and strong customer renewals. Pearson VUE is making progress in expanding its test prep offering through building out the Pearson Skilling Suite and expanding its go to market capabilities in this area. We also secured several meaningful new enterprise customer contracts and renewals relevant to the Pearson VUE business including ServiceNow, Microsoft and AWS. US Student Assessment performed well, securing key customer renewals and expanding formative testing in Arizona and North Dakota. In UK & International Qualifications we developed new AI features within our Exam Practice Assistant to support GCSE students preparing for their exams. In Clinical Assessment we successfully launched the 5th edition of Wechsler Adult Intelligence Scale and expanded our Digital Assessment Library for Schools (DALS) platform subscription model.
    ·     In Virtual Schools we opened 3 new schools and scaled our career and college readiness programmes to 24 schools in 2024. We also piloted a new enrolment portal, doubling the speed for enrolment, helping to drive underlying enrolment growth on a same school basis. We have also embedded AI study tools into our content to provide high school students with step-by-step assistance – leveraging technology piloted in Higher Education. For teachers, we’ve launched AI-generated custom assessments, halving the time it takes teachers to create an assessment.
    ·     In Higher Education we were pleased to return to growth, and grew adoption share in US Higher Education, aided by AI study tools for students and AI MyLab and Mastering instruction tools for educators. A recent survey in the US found that Higher Education students using Pearson AI study tools are 4x more likely to engage in active and efficient studying, while educators see new opportunities to enhance instruction. We have also rolled out our AI study tools into global editions of leading higher education titles to enable access for our International students. We have been successful in scaling and monetising our Channels product. In October 2024, we began to directly sell our K-12 proprietary Advanced Placement (AP®), Dual Enrolment and Career and Technical Education (CTE) materials. Investing in a dedicated in-house sales team will enable us to expand and strengthen customer relationships with US school administrators going forward as the demand for college and career readiness programmes grows.
    ·     In English Language Learning, we launched PTE Core, our newest test designed to meet Canada’s specific migration needs, expanded our Wizard business in Brazil driven by its online business and new government partnerships, and developed two new AI products. Smart Lesson Generator, formerly named Teaching Pal, leverages Pearson’s trusted IP with generative AI to simplify educators’ work and save them time by creating customised lesson content and activities. Our AI powered Digital Language Tutor is specifically designed to help businesses improve English proficiency at scale and unlock employee potential. The AI tutor offers highly realistic, personalised training, underpinned by trusted learning science, and builds on a successful pilot programme conducted with corporate clients.
    ·     Our Workforce Skills business delivered a solid performance and we continued to acquire new customers and expand existing relationships, landing major collaborations and partnerships. We announced a multi-year deal with ServiceNow to supercharge workforce development and employee experiences in the age of AI.  We also expanded our partnership with Degreed which will integrate Faethm data sets into Degreed’s platform, offering real-time insights into the most relevant skills across industries, allowing companies to benchmark skills, identify gaps, and prioritise key areas for upskilling. This year we have announced further strategic partnerships with Microsoft and AWS including joint go-to-market initiatives including AI upskilling. Credly crossed the 100 million unique badge milestone, with credentials representing the acquisition of skills that are critical for the future workforce, especially as AI reshapes job roles and industry standards. We launched GED & Me, the GED Testing Service Mobile App, which achieved circa 100,000 downloads in its first 6 months, with users completing the GED programme at a 10% higher rate compared to those not on the app.

    Outlook

    Evolution of Workforce Skills

    ·     From January this year, Workforce Skills became Enterprise Learning and Skills, bringing together Pearson’s enterprise sales capabilities globally (excluding those of Pearson VUE). In addition, sub-unit Workforce Solutions became Enterprise Solutions. Vishaal Gupta will continue to lead this part of the business.
    ·     The enterprise focused business within Higher Education (IT Pro) has been transferred into Enterprise Learning and Skills from January this year. This business generated £45m of revenue and £19m of adjusted operating profit in 2024.

    2025 guidance

    SalesGroupIn line with current market expectations6.  
    Assessment & QualificationsSales to grow low to mid-single digit. Growth will be H2 weighted with new and renewed contracts and the test prep business building during the year.
    Virtual LearningTo return to growth in H2 and the full year driven by enrolment increases, partially from new school openings, for the 25/26 academic year. Sales to decline in H1 given the final impact of previous school losses and the timing of funding in the previous year.
    Higher EducationSales growth in 2025 will be higher than in 2024 as we build on the successful results of our sales team transformation and product innovations, particularly using AI. Growth will be relatively stable throughout the year.
    English Language LearningSales growth will moderate given the likely impacts of elections on immigration rates in 2025 affecting our PTE business. Given the growth profile of English Language Learning in 2024 we expect Q1 2025 to decline, with growth increasing in each quarter thereafter. We remain confident in the medium term outlook given demographic projections.
    Enterprise Learning and SkillsSales to grow high single digit with Vocational Qualifications seeing solid growth and the addition of several new contracts for Enterprise Solutions. Growth will increase quarter on quarter.
    Group ProfitAdjusted Operating ProfitIn line with current market expectations6. 
    InterestAdjusted net finance costs of c.£65m reflecting the impact of the Education Bond and our intention to commence a £350m share buyback.
    Tax rateWe expect the effective tax rate on adjusted profit before tax to be between 24% and 25%.
    Cash flowWe expect a free cash flow conversion5 of 90-100% plus the anticipated £0.1bn State Aid repayment in 2025.
    FXEvery 1c movement in GBP:USD rate equates to approximately £5m adjusted operating profit impact.

    Medium term outlook unchanged

    ·     Beyond 2025, Pearson is positioned to deliver a mid-single digit underlying sales growth CAGR, sustained margin improvement that will equate to an average increase of 40 basis points per annum and strong free cash conversion5, in the region of 90% to 100%, on average, across the period.

    Financial Calendar

    ·     2025 Q1 Trading Update will be announced on 2 May 2025.

    Executive change 

    Pearson announces the appointment of Sharon Hague, currently Managing Director of our US Student Assessment and UK & International Qualifications businesses, as the new President of English Language Learning, effective March 2025. Sharon will become a member of the Pearson Executive Leadership team, reporting to CEO Omar Abbosh.  
     
    Gio Giovannelli, current President of English Language Learning, has decided to leave Pearson following a thorough transition. Gio has been instrumental in driving strong financial and operational performance, including accelerated revenue growth in our English Language Learning business unit. We thank him for his contribution. 

  • Pearson plc 10.5% potential upside indicated by JP Morgan Cazenove

    Pearson plc with ticker (LON:PSON) now has a potential upside of 10.5% according to JP Morgan Cazenove.

    PSON.L

    JP Morgan Cazenove set a target price of 1,450 GBX for the company, which when compared to the Pearson plc share price of 1,313 GBX at opening today (10/02/2025) indicates a potential upside of 10.5%. Trading has ranged between 924 (52 week low) and 1,363 (52 week high) with an average of 1,412,778 shares exchanging hands daily. The market capitalisation at the time of writing is £8,801,358,008.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson plc 11.3% potential upside indicated by JP Morgan Cazenove

    Pearson plc with ticker (LON:PSON) now has a potential upside of 11.3% according to JP Morgan Cazenove.

    PSON.L

    JP Morgan Cazenove set a target price of 1,450 GBX for the company, which when compared to the Pearson plc share price of 1,303 GBX at opening today (29/01/2025) indicates a potential upside of 11.3%. Trading has ranged between 924 (52 week low) and 1,316 (52 week high) with an average of 1,389,646 shares exchanging hands daily. The market capitalisation at the time of writing is £8,721,404,923.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson Plc reports 2024 financial growth and strategic partnership with Microsoft

    Pearson Plc reports 2024 financial growth and strategic partnership with Microsoft

    Pearson Plc (LON:PSON) has announced its latest trading update.

    Delivered on financial1 and strategic priorities for 2024. Entering 2025 with continued confidence. New strategic partnership with Microsoft progressing our Enterprise focus and technology transformation.

    Highlights

    ·   Underlying Group sales growth2 of 3% for the full year, excluding OPM3 and the Strategic Review4 businesses.
    ·   Group adjusted operating profit of £595-600m at £:$ of 1.28 for the full year, up c.10% on an underlying basis compared to 2023, resulting in a margin of c.16.8% (2023: 15.6%).
    ·   Free cash flow conversion in excess of 100%5, ahead of guidance.
    ·   Successfully delivered our 2024 strategic priorities with progress in Enterprise and scaling AI across our products and services including the recent launch of an AI powered Digital Language Tutor
    ·   New multi-year strategic Enterprise AI partnership with Microsoft:
    oExtending our commercial relationship with Pearson VUE;
    oFuture collaboration on innovation and joint go-to-market activities, including in AI upskilling; and
    oOpportunity to enhance our AI and technology capabilities across the business.

    Omar Abbosh, Pearson’s Chief Executive, said:

    “I am pleased with the progress Pearson has made in 2024, successfully executing against our financial and strategic priorities. I’m particularly encouraged to see the growing commercial momentum of our AI enhanced offerings and the strategic Enterprise partnerships that we have established, such as the latest with Microsoft. These reflect the strength of our proposition and the opportunities that lie ahead.

    The Group is well positioned, with continued confidence, as we look to build on our strategic and operational progress and deliver long-term future value for our shareholders.”

    Underlying sales growth2 of 3% for 2024, excluding OPM3 and Strategic Review4 businesses; 2% in aggregate

    ·     Assessment & Qualifications sales were up 3% for the full year and 4% in Q4. Pearson VUE performance was driven by favourable mix, with PDRI seeing good growth. In Clinical Assessment, sales grew due to pricing, digital product growth and successful new product launches. UK & International Qualifications benefited from volume, pricing, and International growth. US Student Assessment performance was supported by several key contract renewals.
    ·     Virtual Schools sales decreased 1% for the full year, due to the previously announced partner school losses, the impact of which will normalise in H1 2025. 2024/25 academic year enrolments were up 4% on a same school basis and we opened 3 new schools in 2024 taking our total number of schools to 40. Virtual Learning sales declined 4% for the full year attributable to the final portion of the OPM ASU contract in the first half of 2023. Virtual Learning sales declined 5% in Q4 as expected, driven by a tough comparator which saw funding improvements in Virtual Schools in 2023.
    ·     Higher Education sales grew 1% for the full year and 2% in Q4, in line with expectations. In US Higher Education full year sales growth was driven by continued gains in adoption share, enrolments, and pricing, partially offset by mix impacts. In the year, there was growth of 3% in US digital subscriptions and 24% in Inclusive Access. We accelerated the rollout of AI within our products in the fourth quarter. Pearson+ registered users increased 1% compared to the prior Fall semester, with paid subscriptions flat over the same period and in addition we have been successful in monetising our Channels product.
    ·     English Language Learning sales increased 8% for the full year with all three business sub-units contributing to growth. Institutional continues to deliver strong performance especially in the Middle East and LatAm. Pearson Test of English (PTE) performed well against a tough market backdrop of tightening migration policies. We continue to incorporate AI within our English Language business unit, launching our first AI powered Digital Language Tutor in the fourth quarter. In Q4 sales grew 11%, an improvement on Q3 due to phasing of revenue in Institutional as expected.
    ·     Workforce Skills sales grew 6% for the full year, with a solid performance in both Vocational Qualifications and Workforce Solutions. Q4 sales increased by 4% driven by a strong performance in Workforce Solutions partially offset by Vocational Qualifications, as the business had a tough comparator with strong double digit growth in the prior year. 

    Evolution of Workforce Skills

    ·     Pearson has a significant opportunity to help enterprises drive productivity and growth by transforming how they evaluate, assess, and reskill their workforce, as well as delivering world-class vocational training and qualifications. To sharpen our focus on the enterprise customer segment, we have formed a global enterprise sales team to enable us to better meet the needs of these customers with a full suite of Pearson solutions. From January this year, Workforce Skills will evolve to become Enterprise Learning and Skills, bringing together Pearson’s enterprise sales capabilities globally (excluding those of Pearson VUE). The Enterprise Learning and Skills business unit will be led by Vishaal Gupta.
    ·     This simplification of the business unit structure will result in modest revenues and costs being transitioned into the Enterprise Learning and Skills business unit from Higher Education. More detail on the financial impact of this change will be outlined at the full year results. We also note that the sub-unit Workforce Solutions becomes Enterprise Solutions.

    Strong financial position

    ·     Pearson’s financial position remains robust, with a strong balance sheet, net debt of less than £0.9bn and 2024 free cash flow conversion in excess of 100%5.

    Executive Changes

    ·     We announce the appointment of Naseem Tuffaha as Chief Business Officer. Naseem has a successful track record of high growth and operational excellence at Microsoft, and more recently The Trade Desk.

    Financial calendar

    ·     Full year results will be announced on 28 February 2025. We will hold an in-person presentation and Q&A session, during which we will outline the 2025 outlook.

    Financial summary

    Underlying growth for the fourth quarter and financial year ended 31st December 2024 compared to the equivalent period in 2023.

    SalesQ4Full Year
    Assessment & Qualifications4%3%
    Virtual Learning(5)%(4)%
    Higher Education2%1%
    English Language Learning11%8%
    Workforce Skills4%6%
    Strategic Review4(100)%(100)%
    Total3%2%
    Total, excluding OPM3 and Strategic Review43%3%

    For an accompanying data sheet providing 2024 metrics relating to sales across select key businesses as well as a breakdown of US Higher Education Courseware college units and Pearson+ metrics, please follow this link.

    12024 consensus on the Pearson website dated 30th August 2024; adjusted operating profit of £598m at £:$ 1.27. As a reminder, every 1c movement in £:$ rate will equate to approximately £5m adjusted operating profit impact.

    2Throughout this announcement growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude currency movements, and portfolio changes.

    3 We completed the sale of the Pearson Online Learning Services (POLS) business in June 2023 and as such have removed it from underlying measures throughout. Within this specific measure we exclude our entire OPM business (POLS and ASU) to aid comparison to guidance.

    4 Strategic Review is sales in international courseware local publishing businesses which have been wound down. As expected, there are no sales in these businesses in 2024.

    5 Free cash flow conversion calculated as free cash flow divided by adjusted earnings.

  • Pearson plc 7.6% potential upside indicated by JP Morgan Cazenove

    Pearson plc with ticker (LON:PSON) now has a potential upside of 7.6% according to JP Morgan Cazenove.

    PSON.L

    JP Morgan Cazenove set a target price of 1,400 GBX for the company, which when compared to the Pearson plc share price of 1,302 GBX at opening today (10/01/2025) indicates a potential upside of 7.6%. Trading has ranged between 924 (52 week low) and 1,316 (52 week high) with an average of 1,254,092 shares exchanging hands daily. The market capitalisation at the time of writing is £8,664,773,724.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson plc 10.6% potential upside indicated by JP Morgan Cazenove

    Pearson plc with ticker (LON:PSON) now has a potential upside of 10.6% according to JP Morgan Cazenove.

    PSON.L

    JP Morgan Cazenove set a target price of 1,400 GBX for the company, which when compared to the Pearson plc share price of 1,266 GBX at opening today (20/12/2024) indicates a potential upside of 10.6%. Trading has ranged between 924 (52 week low) and 1,286 (52 week high) with an average of 1,418,790 shares exchanging hands daily. The market capitalisation at the time of writing is £10,620,822,145.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson plc 12.8% potential upside indicated by JP Morgan

    Pearson plc with ticker (LON:PSON) now has a potential upside of 12.8% according to JP Morgan.

    PSON.L

    JP Morgan set a target price of 1,400 GBX for the company, which when compared to the Pearson plc share price of 1,241 GBX at opening today (11/12/2024) indicates a potential upside of 12.8%. Trading has ranged between 924 (52 week low) and 1,266 (52 week high) with an average of 1,515,658 shares exchanging hands daily. The market capitalisation at the time of writing is £8,431,387,422.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson Plc reports strong H1 2024 results with steady growth and positive outlook

    Pearson Plc reports strong H1 2024 results with steady growth and positive outlook

    Pearson plc (LON:PSON) has announced its interim results for the six months to 30th June 2024 (Unaudited).

    Solid H1 financial performance; No change to 2024 and 2025 guidance; Beyond 2025, expect to grow at mid-single digits with expanding adjusted operating margins

    Financial Highlights

    £mH1 2024H1 2023 £mH1 2024H1 2023
    Business performance Statutory results
    Sales1,7541,879Sales1,7541,879
    Adjusted operating profit250250Operating profit219219
    Operating cash flow12979Profit for the period158187
    Free cash flow27 (50)Net cash generated from operations185106
    Adjusted earnings per share 25.6p25.6pBasic earnings per share23.1p26.1p

    Highlights

    ·     Underlying Group sales growth1 of 2%, excluding OPM2 and the Strategic Review3 businesses with each segment performing broadly in line with our expectations.
    ·     Underlying adjusted operating profit growth1 of 4% to £250m.
    ·     Strong free cash flow performance up £77m to £27m.
    ·     £500m share buyback substantially complete and raised interim dividend by 6%, while balance sheet remains robust.
    ·     Remain on track to deliver on FY24 expectations and reiterate guidance out to 2025.
    ·     Beyond 2025, Pearson is positioned to deliver mid-single digit underlying sales CAGR and sustained margin improvement that will equate to an average increase of 40 basis points per annum by continuing to drive performance in the core business, executing synergies and expanding into adjacent markets.

    Omar Abbosh, Pearson’s Chief Executive, said:

    “Since joining Pearson at the start of the year, I have led a comprehensive review of our business and the markets in which we operate. This process has only reinforced my conviction in the potential of Pearson and the vital role we play in helping people realise the life they imagine through learning. Significant demographic shifts and rapid advances in AI will be important drivers of growth in education and work over the coming years, and this plays to Pearson’s strengths as a trusted provider of learning and assessment services.

    We are implementing plans across all of our businesses that will see us deliver better products & services with greater efficiency. We’re also focusing on opportunities to progressively build our presence in materially larger and higher growth markets in which we are well positioned to succeed, with a particular focus on early careers and enterprise skilling.

    “Our good strategic and financial performance in the first half of the year sets us up to achieve our guidance for the current year and for 2025, and we expect thereafter to continue to deliver attractive growth with progressive improvements in our margins alongside consistently strong cash generation.”

    Underlying sales growth1 of 2%, excluding OPM2 and Strategic Review3 businesses; 1% in aggregate

    ·     Assessment & Qualifications sales grew 2%, with growth across Pearson VUE, Clinical, and UK & International Qualifications partially offset by an expected, small decline in US Student Assessments.
    ·     Virtual Schools sales declined 1%, reflecting the previously announced contract losses for the current academic year. Virtual Learning sales declined 8% mostly attributable to the final portion of the OPM ASU contract in the first half of 2023.
    ·     Higher Education sales were down 2%, in line with our phasing guidance. We are seeing encouraging signs of progress in the business with Spring adoption data indicating small market share gains.
    ·     English Language Learning sales increased 11% due to strong growth in Institutional as well as growth in Mondly, partially offset by a sales decline in PTE given market dynamics. The Argentina FX impact discussed at Q1 has reduced as expected, and will be immaterial in a full year context.
    ·     Workforce Skills sales grew 6%, with strong performances in Vocational Qualifications, GED and Credly.

    Adjusted operating profit1 up 4% on an underlying basis to £250m

    ·     Performance driven by trading alongside net cost phasing and savings, partially offset by inflation and restructuring charges in Higher Education, which were weighted to the first half. First half adjusted profit margin grew to 14% (H1 2023: 13%).
    ·     Headline growth was flat reflecting underlying performance, portfolio changes and currency movements.
    ·     Adjusted earnings per share was flat at 25.6p (H1 2023: 25.6p) with higher net interest costs offset by the reduction in issued shares, both due to the share buyback. 

    Strong free cash flow with robust balance sheet enabling continued investment and driving increased shareholder returns

    ·     Operating cash flow was again strong, up £50m to £129m (H1 2023: £79m) with good underlying fundamentals, as well as some phasing and FX benefits.
    ·     Free cash flow was also strong, up £77m to £27m (H1 2023: (£50)m) given the operating cash performance and no reorganisation costs this year.
    ·     Our balance sheet remains robust with net debt of £1.2bn (H1 2023: £0.9bn), the year on year increase being due to the £500m share buyback and dividends, partially offset by free cash flow. 
    ·     Proposed interim dividend of 7.4p (H1 2023: 7.0p) represents an increase of 6%. 
    ·     The previously announced buyback extension to repurchase £200m of shares continued. As at 30th June 2024 £163m of shares had been repurchased at an average price of 994p per share, representing 81% of the total programme. 

    Continued operational progress

    Operational progress continued across each of our businesses

    ·     In Assessment & Qualifications, Pearson VUE renewed and won a number of key contracts, which will support future growth. Pearson VUE wins included university entrance tests in the UK and the teacher licence contract in Georgia, and it renewed key contracts with the National Council of State Boards of Nursing, the Project Management Institute, and the American Registry of Radiologic Technologists. PDRI also saw good growth, with strong volumes across both the TSA and United States Airforce contracts.
    ·     In Virtual Schools, we have already announced the opening of 3 new schools this year and a further 19 career programmes. This brings our total number of schools to 40, with 24 career programmes, across 30 states for the 2024/25 academic year.
    ·     In Higher Education, recent Spring semester market data indicates a small gain in adoption share, while we also saw 3% growth in core text units, 2% growth in US digital subscriptions and Inclusive Access growth of 25%. Pearson+ continued to perform well with 5.0m cumulative registered users and paid subscriptions for the full academic year increasing 18% to 1.1m. We are seeing good engagement with our AI study tools, and are on track to extend to a further c.80 titles for Fall back to school. Pearson will also be launching AI tools for instructors for the Fall 2024 semester in 25 of our best-selling titles across business, math, science, and nursing in the US.
    ·     In English Language Learning, PTE continued to gain market share, despite a market which has declined given tightening of policies around international study and migration across Australia, Canada and the UK. Given these market dynamics, we expect PTE sales to be flat to down for the year. Our market share gains in PTE, and the ramp up for Canada, mean we are well placed for English high stakes testing market growth, which we expect in the medium term given demographic projections.
    ·     In Workforce Skills, Vishaal Gupta joined Pearson on April 15th to lead the division, and play a critical role in executing our enterprise skills strategy.
    ·     Dave Treat joined Pearson as Chief Technology Officer on 2nd July 2024. Dave will report to CEO, Omar Abbosh, and work in close partnership with Pearson’s Chief Product and Chief Information Officers. He will lead technology innovation and architecture across the company.
    ·     Ginny Cartwright Ziegler joined Pearson, today, 29 July 2024 as Chief Marketing Officer. Ginny will report to CEO Omar Abbosh and will lead the next generation of our work in marketing, brand and communications. Ginny is succeeding Lynne Frank, who has stepped down from her dual role as Chief Marketing Officer and Co-President, Direct to Consumer.

    Positioning Pearson for sustained growth with continued higher margins

    Through an extensive examination of the business and the markets in which we operate, we have identified a targeted market expansion opportunity for Pearson and have updated our strategy to drive higher performance in the core business and unlock new synergies

    ·     Pearson is in a strong position today. We are the world’s lifelong learning company, where we are trusted to help individuals realise the life they imagine through learning. Our five businesses have clear lines of accountability and improving financial performance, with particular strength in assessments and verification.
    ·     We are leaders today in a c.$15bn subsegment of the U.S. learning market, and are well positioned to play in a larger, and faster growing c.$80bn addressable market. 
    ·     The opportunity for Pearson will be supported by two key secular trends foreseen over the coming years: shifts in demographic trends and the rapid growth in the power of AI. The demographic shift will see the baby boomer generation leave the workforce, resulting in heightened pressure on talent sourcing, and the rapid development of increasingly powerful AI models will significantly change the world of work and skills requirements. Employers will need to find new pools of talent and continuously develop and verify the skills of their workforces to keep pace with and benefit from technology and AI advancements.
    ·     To realise the growth opportunity for Pearson we will:
    ·     Drive further performance from our existing five core businesses to deliver an improved customer proposition, growth and efficiencies. We have identified a number of technology enabled initiatives, which we expect to unlock tens of millions of savings over the medium term. Initially these savings will be offset by restructuring costs, but as these pay back they will enable us to further invest in growth opportunities.
    ·     Unlock execution-based synergies across the business units from product & service bundling, a modern approach to software and product development, and a focus on strategic partnerships.
    ·     We will allocate our investment where we see the best opportunities for growth and returns: firstly assessments and verifications; then enterprise skills and early careers.
    ·     We will maintain net debt to EBITDA of around 2x, on average over time, though in the short term we intend to remain below this level to maintain some investment optionality. Our dividend policy is progressive and sustainable. At present, we do not plan to extend our share buyback programme, but are committed to regularly reviewing this.

    Outlook

    2024 Outlook reaffirmed4

    Group underlying sales growth, adjusted operating profit and tax outlook for 2024 remain in line with market expectations. As guided, interest will be c.£45m and free cash flow conversion 95-100%.

    In terms of divisional guidance and phasing:

    ·     Expect improved 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. We expect Virtual Schools to return to growth in 2025 and beyond.
    ·     In Higher Education, we remain confident we will return to growth in the second half and for the full year. Growth in digital sales will continue to shift revenue recognition from Q3 to Q4.
    ·     In English Language Learning, we continue to expect high single digit sales growth and growth weighted to the second half given the outstanding performance in the first half of 2023. The growth will be driven mainly by Institutional, with PTE being flat to down.
    ·     In Workforce Skills, we expect to achieve high single digit sales growth.
    ·     Every 1c movement in £:$ rate equates to approximately £5m adjusted operating profit impact.

    2025 Outlook

    We continue to expect the Group to achieve mid-single digit underlying sales 3-year CAGR from 2022 to 2025, excluding OPM and Strategic Review businesses, and remain on track to achieve our 16-17% adjusted operating profit margin guidance.

    Medium Term Outlook

    Our future growth and investment focus will lead to mid-single digit underlying sales CAGR. Through continued operational improvements, we also expect to deliver sustained margin improvement that will equate to an average increase of 40 basis points per annum beyond 2025. We will maintain free cash flow conversion in the region of 90-100% on average across the period.

  • Pearson plc 4.5% potential upside indicated by Deutsche

    Pearson plc with ticker (LON:PSON) now has a potential upside of 4.5% according to Deutsche.

    PSON.L

    Deutsche set a target price of 1,052 GBX for the company, which when compared to the Pearson plc share price of 1,007 GBX at opening today (16/07/2024) indicates a potential upside of 4.5%. Trading has ranged between 810 (52 week low) and 1,047 (52 week high) with an average of 1,831,341 shares exchanging hands daily. The market capitalisation at the time of writing is £6,736,798,783.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.



  • Pearson plc 2024 Q1 Trading Update with Strong Operational Progress and Growth Momentum

    Pearson plc 2024 Q1 Trading Update with Strong Operational Progress and Growth Momentum

    Pearson plc (LON:PSON) has announced its 2024 Q1 Trading Update (Unaudited).

    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.
    ·   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 & Qualifications2%
    Virtual Learning (4)%
    Higher Education (4)%
    English Language Learning22%
    Workforce Skills9%
    Strategic Review2 (100)%
    Total2%
    Total, excluding OPM1 and Strategic Review23%

    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.

  • Pearson plc 21.1% potential upside indicated by JP Morgan Cazenove

    Pearson plc with ticker (LON:PSON) now has a potential upside of 21.1% according to JP Morgan Cazenove.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    JP Morgan Cazenove set a target price of 1,220 GBX for the company, which when compared to the Pearson plc share price of 1,008 GBX at opening today (05/04/2024) indicates a potential upside of 21.1%. Trading has ranged between 749 (52 week low) and 1,037 (52 week high) with an average of 1,489,672 shares exchanging hands daily. The market capitalisation at the time of writing is £6,891,488,162.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson plc 17.6% potential upside indicated by JP Morgan

    Pearson plc with ticker (LON:PSON) now has a potential upside of 17.6% according to JP Morgan.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    JP Morgan set a target price of 1,220 GBX for the company, which when compared to the Pearson plc share price of 1,038 GBX at opening today (22/03/2024) indicates a potential upside of 17.6%. Trading has ranged between 749 (52 week low) and 1,045 (52 week high) with an average of 1,908,053 shares exchanging hands daily. The market capitalisation at the time of writing is £7,152,232,068.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson plc 17.0% potential upside indicated by JP Morgan

    Pearson plc with ticker (LON:PSON) now has a potential upside of 17.0% according to JP Morgan.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    JP Morgan set a target price of 1,200 GBX for the company, which when compared to the Pearson plc share price of 1,026 GBX at opening today (14/03/2024) indicates a potential upside of 17.0%. Trading has ranged between 749 (52 week low) and 1,037 (52 week high) with an average of 1,771,252 shares exchanging hands daily. The market capitalisation at the time of writing is £7,041,659,992.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson plc 19.8% potential upside indicated by JP Morgan

    Pearson plc with ticker (LON:PSON) now has a potential upside of 19.8% according to JP Morgan.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    JP Morgan set a target price of 1,200 GBX for the company, which when compared to the Pearson plc share price of 1,002 GBX at opening today (07/03/2024) indicates a potential upside of 19.8%. Trading has ranged between 749 (52 week low) and 1,037 (52 week high) with an average of 1,604,929 shares exchanging hands daily. The market capitalisation at the time of writing is £6,896,684,168.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson reports another year of financial outperformance

    Pearson reports another year of financial outperformance

    Pearson PLC (LON:PSON) has announced its 2023 Preliminary Results (Unaudited).

    Financial Highlights

    £m20232022£m20232022
    Business performance Statutory results
    Sales3,6743,841Sales3,6743,841
    Adjusted operating profit573456Operating profit498271
    Operating cash flow587401Profit for the year380244
    Free cash flow387222Net cash generated from operations682527
    Adjusted earnings per share 58.2p51.8pBasic earnings per share53.1p32.8p

    Highlights

    ·     Underlying Group sales growth1 of 5%, excluding OPM2 and the Strategic Review3 businesses.
    ·     Group adjusted operating profit of £573m, up 31% on an underlying basis compared to 2022 with significant expansion in adjusted operating profit margin from 11.9% to 15.6%, underpinned by sales growth and execution of £120m cost efficiency programme.
    ·     Operating cash conversion of 102% driving 74% headline increase in free cash flow.
    ·     Proposed final dividend of 15.7p, resulting in full year dividend up 6% to 22.7p.
    ·     Clear capital allocation priorities underpinning £300m share buyback launched last September and today announcing intention to extend share buyback programme by £200m.
    ·     Positive outlook for 2024 and 2025 in line with expectations and Group guidance unchanged. Free cash flow expected to further improve next year due to lower restructuring cash costs.

    Omar Abbosh, Pearson’s Chief Executive, said:

    “2023 was another year of strong operational and financial performance, with results surpassing initial expectations once again, driven by our Assessment & Qualifications and English Language Learning businesses. Our consistently strong cash generation has sustained investment to support our future growth and deliver ongoing value for shareholders.

    “Pearson is a strong company with excellent market potential, people committed to our mission, and a purpose that genuinely helps communities. My conversations with our customers, our people and our investors have confirmed that and more. Pearson is well positioned today, providing a stable platform for continued growth that can benefit from the inflection point we see with the development of AI. I am optimistic about the opportunities this advancement in technology brings, underpinned by our trusted brand, large high quality data sets and strong capabilities in assessment, content and services. We have an exciting future ahead of us.”

    2024 priorities

    ·     We will deliver on current 2024 market expectations4 for Group underlying sales growth and adjusted operating profit given the strength of our core businesses, alongside a disciplined focus on organic growth, customer expectations and execution.
    ·     The range and quality of products across our business supplying the vast Enterprise market presents a large and still forming opportunity, which we plan to maximise.
    ·     We will continue to infuse our products and services with a wide range of AI solutions and capabilities to ensure we lead on innovation for our end consumers.
    ·     We will provide a business and strategic update at our interim results in July.

    Underlying sales growth1 of 5%, excluding OPM2 and Strategic Review3 businesses; 1% in aggregate

    ·     Assessment & Qualifications sales were up 7% largely driven by a strong performance in Pearson VUE with good progress in IT and healthcare alongside the commencement of new contracts. There was also good growth across US Student Assessments, Clinical and UK & International Qualifications, due to new contract wins, good government funding and price increases.
    ·     Virtual Learning sales decreased 20%, primarily due to an expected 87% decrease in the Online Program Management (OPM) business resulting from the previously announced ASU contract loss. Virtual Schools sales declined 2%, with enrolments for the 2023/24 academic year lower due to the previously announced loss of a larger partner school.
    ·     Higher Education sales were down 3%, 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. Pearson+ continued to perform well, passing the milestone of 1 million cumulative paid subscriptions for the calendar year.
    ·     English Language Learning sales increased 30% 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.
    ·     Workforce Skills sales grew 11% for the full year, with a solid performance in both Vocational Qualifications and Workforce Solutions.

    Adjusted operating profit1 up 31% on an underlying basis to £573m

    ·     Performance driven by sales growth and execution of the £120m cost efficiency programme, partially offset by investment and inflation. Adjusted operating profit margin rose to 15.6% (2022: 11.9%).
    ·     Headline growth was 26% reflecting business performance along with portfolio changes and currency movements.
    ·     Adjusted earnings per share grew to 58.2p (2022: 51.8p) reflecting adjusted operating profit growth, normalisation of tax and interest charges and the reduction in issued shares as a result of share buybacks.

    Cash performance

    ·     Operating cash1 inflow increased on a headline basis from £401m in 2022 to £587m in 2023, representing excellent cash conversion of 102%. This increase is reflective of the trading performance of the business, good cash collections and reduced product development in Higher Education connected to the cost efficiency programme.
    ·     Our excellent cash conversion drove an increase in free cash flow from £222m in 2022 to £387m in 2023, a free cash flow conversion of 93%5. 2023 included £63m of cash restructuring costs in relation to the cost efficiency programme.

    Strong balance sheet supports continued organic and inorganic investment alongside increased shareholder returns

    ·     We completed the acquisition of PDRI, significantly expanding Pearson’s services to the US federal government as well as growing our presence with large employers.
    ·     Year-end net debt of £0.7bn (2022: £0.6bn) with net debt / adjusted EBITDA ratio at 1.0x (2022: 0.8x).
    ·     Return on capital was 10.3% (2022: 8.7%).
    ·     Proposed final dividend of 15.7p (2022: 14.9p) which equates to a full year dividend of 22.7p (2022: 21.5p).
    ·     The previously announced buyback to repurchase £300m of shares continued. As at 28th February 2024 £288m of shares had been repurchased at an average price of 928p per share, representing 96% of the total programme.
    ·     Given the strength of our free cash flow in 2023 we intend to extend our share buyback programme by £200m.

    Statutory results

    ·     Sales decreased 4% to £3,674m (2022: £3,841m) reflecting business performance, portfolio changes and currency movements.
    ·     Statutory operating profit was £498m (2022: £271m). The increase in 2023 was driven by increased trading profits and a reduction in the costs of major restructuring, partially offset by a net loss related to acquisitions and disposals compared to a net gain in 2022.
    ·     Net cash generated from operations of £682m (2022: £527m).
    ·     Statutory earnings per share of 53.1p (2022: 32.8p).

    Continued strategic and operational progress across the business

    Advancing future growth drivers and building strong digital offerings

    ·     In Assessment & Qualifications we won a number of VUE contracts that commenced in 2023 and maintained our high customer renewal rates. Within our UK & International Qualifications business we leveraged our technology capabilities to extend our onscreen exams offering with the roll out of GCSE Computer Science and International GCSEs in English Language and Literature. Within Clinical Assessment our high quality, trusted portfolio of intellectual property continued to be a source of competitive advantage, helping to drive growth in our Digital Assessment Library for Schools (DALS) product. We won subscription contracts with Chicago Public Schools and Miami Dade County School District.
    ·     In Virtual Schools we launched a new Connections Academy Career Pathways programme in five schools for middle and high school students, where we are offering a tri-credit approach to career-readiness courses in partnership with Coursera and Acadeum, amongst others. We saw encouraging enrolment trends in these schools and are planning to roll the initiative out to an additional 15 schools in 2024 to drive future growth. We are pleased to have secured two new schools in the States impacting the 2023/24 and 2024/25 academic years.
    ·     In Higher Education we made significant strides in converging our platforms to enhance stability and deliver upgraded, best-in-class features to improve our customer experience. Stability was much improved in the Fall semester with up time improving to 99.8% for our platform products. We also improved our technology support, leading to improved NPS scores amongst faculty during the peak Fall season. Within our product suite we introduced 6 new iLabs to take our total to 21. Generative AI study tools designed to help students better learn and understand challenging subjects were launched in beta within select titles for Pearson+ and Mastering for Fall back-to-school. We’re encouraged by how students are engaging with these tools, with over 60,000 AI conversations taking place in Pearson’s Tro Chemistry Mastering eText alone and 75% of users saying the tools were ‘helpful’ or ‘very helpful’. We have already expanded the beta to 12 additional MyLab and Mastering titles with at least 40 math, science, business and nursing titles to follow by Fall semester 2024. We delivered 2% growth in platform units in 2023. Pearson+ continued to grow, passing the milestone of 1 million cumulative paid subscriptions to reach 1,048k for the calendar year and we continued to build out our supplementary learning Channels offering, with 19 study channels now live. The changes we have made to our sales team and go to market strategy are delivering early signs of success including a number of takeaway adoptions in the Fall back to school selling period. We believe these changes set us up well for continued progress in 2024.
    ·     In English Language Learning, we have seen a strong increase in the number of users on our digital platforms. Coupled with investment in new digital content, including video and audio, and the strength of the Global Scale of English, we are confident that we are delivering engaging learning experiences while enabling teachers to better understand and meet the needs of their learners. In our Mondly enterprise focused business, we are launching Mondly by Pearson Workplace English, which benefits from workplace-specific content, leveraging our institutional courseware portfolio, and enhanced features. Coupled with investment in our Versant suite of tests, this strengthens our offering in the Corporate language learning space.
    ·     Within our Workforce Solutions business we evolved our offering from a unified product approach, building a powerful technology stack that has enabled us to break down core Faethm capabilities into modular application programming interfaces. We are seeing contract wins across digital credentialing and strategic workforce planning solutions with the likes of Cleveland Clinic and ServiceNow.

    Expanding our reach in new and adjacent markets

    ·     In Assessment & Qualifications we acquired PDRI, a trusted provider of workforce assessment services. PDRI launched a full suite of hiring assessment programmes for the Transportation Security Administration and also won multi-year contracts with a number of other US federal agencies, including the US Air Force, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, and Department of Homeland Security. Within VUE we expect to derive future growth from moving further up the technology certification value chain and we saw encouraging signs in this market in 2023. Within Clinical Assessment we made further progress in pursuing our strategy to partner with clinical pharmaceutical companies, winning a contract to deliver assessments to aid determining the effectiveness of a drug used in the treatment of Alzheimer’s disease. Our UK & International Qualifications business delivered good international growth in 2023. We see further opportunity for growth internationally across our Assessment & Qualifications businesses into 2024 and beyond.
    ·     In English Language Learning we won recognition for the Pearson Test of English for Canadian Student Direct Stream and economic immigration visa applications. This grants access to the full potential of the Canadian market, which is the largest of the three key markets which Pearson now has recognition to operate in. We launched PTE for Canadian Student Direct Stream visa applications in the second half of 2023 and opened bookings for PTE for Canadian economic immigration visa applications in February 2024. We continue to invest in building our brand awareness and testing capacity in the PTE market. We opened one of our largest company-owned Pearson VUE testing centres in Chandigarh, India. With the ability to deliver more than 14,000 tests per month, including PTE, this marks another step forward in the important Indian market, where based on the estimated market size we have seen market share gains throughout 2023.
    ·     In our Vocational Qualifications business we signed a contract with the Jordanian Ministry of Education to partner on the reform of Jordan’s technical and vocational education and training provision in schools with over 50,000 learners expected to take these courses over the next three years. International expansion will be an important growth driver for our Vocational Qualifications business going forwards.

    Delivering efficiencies and reshaping the portfolio

    ·     We delivered £120m of cost efficiencies in 2023 across product and content support costs, technology and corporate property.
    ·     Cost efficiencies supported adjusted operating profit margin improvement from 11.9% in 2022 to 15.6% in 2023.
    ·     We disposed of our Pearson Online Learning Services (POLS) business, further focusing Pearson’s portfolio towards future growth opportunities.

    Outlook

    2024 outlook

    ·     We expect Group underlying sales growth, adjusted operating profit and tax will be in line with current market expectations4. Our interest charge will be c.£45m given our ongoing £300m share buyback and intended extension by a further £200m.
    ·     Every 1c movement in £:$ rate will equate to approximately £5m adjusted operating profit impact.
    ·     In Assessment & Qualifications we expect sales growth of low to mid-single digit.
    ·     In Virtual Schools we 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. We are pleased to have secured two new schools in the States impacting the 2023/24 and 2024/25 academic years and therefore expect the division to return to growth beyond 2024.
    ·     In Higher Education we expect to return to sales growth.
    ·     In English Language Learning we continue to expect high single digit sales growth.
    ·     In Workforce Skills we expect to achieve high single digit sales growth.
    ·     We expect a free cash flow conversion of 95-100%.

    2025 ambition

    ·     We continue to expect the Group to achieve mid-single digit underlying sales 3-year CAGR from 2022 to 2025, excluding OPM and Strategic Review businesses, and remain on track to achieve our 16-17% adjusted operating profit margin guidance.

    Executive changes

    We are excited about the growth opportunity across the enterprise learning market and working with organisations to address the challenges of building an adaptable workforce that is augmented by AI. Reflecting on our partnerships and capabilities, we are confident we can build on our existing products and services in the enterprise market to drive higher growth longer term.

    Pearson announces the appointment of Vishaal Gupta as the new President of Workforce Skills.

    Vishaal currently serves as a Senior Managing Director with Accenture. Vishaal is an enterprise sales leader who leads a team that originates and closes large and complex deals, particularly in the areas of Technology Transformation and Strategic Managed Services. Vishaal has over 29 years’ experience working in technology driven companies.

    Mike Howells, President of Workforce Skills, will be leaving Pearson in March. Mike has led the evolution of our Workforce Skills division for the last three years, overseeing the development of our enterprise solutions business and further extending the international presence of our Vocational Qualifications business. We thank him for his contribution.

  • Pearson plc 2.2% potential upside indicated by Barclays

    Pearson plc with ticker (LON:PSON) now has a potential upside of 2.2% according to Barclays.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    Barclays set a target price of 965 GBX for the company, which when compared to the Pearson plc share price of 944 GBX at opening today (22/02/2024) indicates a potential upside of 2.2%. Trading has ranged between 749 (52 week low) and 994 (52 week high) with an average of 1,487,733 shares exchanging hands daily. The market capitalisation at the time of writing is £6,553,712,187.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson plc -.8% potential downside indicated by Barclays

    Pearson plc with ticker (LON:PSON) now has a potential downside of -.8% according to Barclays.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    Barclays set a target price of 965 GBX for the company, which when compared to the Pearson plc share price of 973 GBX at opening today (16/02/2024) indicates a potential downside of -.8%. Trading has ranged between 749 (52 week low) and 994 (52 week high) with an average of 1,368,985 shares exchanging hands daily. The market capitalisation at the time of writing is £6,661,964,877.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]

  • Pearson plc 3.3% potential upside indicated by Barclays

    Pearson plc with ticker (LON:PSON) now has a potential upside of 3.3% according to Barclays.

    [stock_market_widget type=”chart” template=”basic” color=”green” assets=”PSON.L” range=”6mo” interval=”1d” axes=”true” cursor=”true” api=”yf”]

    Barclays set a target price of 965 GBX for the company, which when compared to the Pearson plc share price of 934 GBX at opening today (07/02/2024) indicates a potential upside of 3.3%. Trading has ranged between 749 (52 week low) and 994 (52 week high) with an average of 1,240,515 shares exchanging hands daily. The market capitalisation at the time of writing is £6,472,224,459.

    Pearson plc is a learning company with its principal operations in the education, assessment and certifications markets. The Company provides digital content, learning experiences, assessments, qualifications and data in the learning market. The Company’s divisions include Assessment & Qualifications, Virtual Learning, English Language Learning, Workforce Skills and Higher Education. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK GCSE and A Levels and International academic qualifications and associated courseware including the English-speaking Canadian and Australian K-12 businesses. The Virtual Learning division includes virtual schools and online program management. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Workforce Skills division includes BTEC, GED, TalentLens, Faethm, Credly, Pearson College and Apprenticeships.

    [stock_market_widget type=”inline” template=”generic” color=”default” assets=”PSON.L” markup=”The share price for {name} ({symbol}) is currently trading at {currency_symbol}{price} ({change_pct})” api=”yf”]