Pearson CFO to step down as company reiterates guidance

Publishing and education group Pearson has revealed that its chief financial officer (CFO) is to step down after 10 years of service, as the Financial Times owner reiterated its profit guidance for the full year.

Robin Freestone, who joined as deputy CFO in 2004 before becoming head CFO in 2006, is to leave the firm before the end of 2015 "to explore a range of other interests", Pearson said.

The board is said to have started searching for a successor and will look at both internal and external candidates. Freestone said he would stay on until his replacement is found.

"Following a decade of rapid evolution and change, Pearson is well positioned to succeed in 2015 and beyond," he said.

"I feel that eight years as CFO is long enough for anyone to play this type of role."

In a separate third-quarter trading update, the company said it was "performing well competitively" as it maintained its target for adjusted earnings per share (EPS) of 62p-67p for 2014, down from 70.1p in 2013.

Sales over the first nine months of the year have risen by 1% at constant exchange rates (CER) over last year, but are flat in undelrying terms as 2% growth in North America was offset by weakness elsewhere.

With 60% of Pearson's sales coming from the US, the company has been hit by the recent strength of the pound against the dollar. It explained that a five-cent move in the GBP/USD exchange rate for the full year has an impact of around 1.2p on adjusted EPS.

"We are reiterating our guidance for this year and, overall, we are performing well competitively through a period of change and in difficult markets," said chief executive John Fallon.

"We still expect those markets to start to stabilise next year and then return to growth in future years," he said.

Commenting on this morning’s figures analysts at Westhouse Securities write: “As detailed in our recent initiation note we regard PSON as a quality company […] That said, we remain cautious on the short-term challenges facing the company, disruption in several of its key markets and on the execution risk entailed in its deep rooted transition into a digital learning company.”

They have trimmed their target price from 1001p to 995p and retained their ‘sell’ recommendation.