Pearson flags 5pc sales growth in 2023

Education publisher Pearson reported a robust set of financial and strategic advancements in a full-year trading update on Wednesday, with 2023 underlying group sales growth coming in at 5%, excluding the impact of OPM and strategic review businesses.

The FTSE 100 company said group adjusted operating profit reached £570m to £575m, making for an increase of over 30% on an underlying basis compared to 2022, resulting in a margin of about 15.5%.

It put the results down to the assessment and qualifications, and English language learning segments.

Pearson said its assessment and qualifications segment saw a 7% increase in sales for the year, driven by strong performance in Pearson VUE, new contract wins, government funding, and price increases.

It said Pearson VUE test volumes grew 6% to 20.7 million, although virtual learning experienced a 20% decrease in sales due to the anticipated 87% decrease in the OPM business following the ASU contract loss.

Higher education sales were down 3% for the year, attributed to adoptions to non-mainstream publishers and pricing mix issues in the first half.

Nonetheless, inclusive access sales to not-for-profit institutions grew by an impressive 22%.

English language learning proved to be a significant success story for Pearson in 2023, with sales increasing 30% for the year.

Pearson Test of English (PTE) played a vital role in this growth, registering a volume increase of 49%, thanks to favourable migration policies in Australia and market share gains in India.

Workforce skills sales also saw strong growth, with an 11% increase for the full year, fuelled by solid performances in vocational qualifications and workforce solutions.

Pearson said its share buyback programme continued, with £188m worth of shares repurchased as of 31 December, and as of 15 January, £206m repurchased, representing 69% of the total programme.

The company said its financial position remained robust with a strong balance sheet, net debt of less than £0.8bn, and a solid cash performance in 2023.

“I am excited to be leading this high quality, purpose-driven company and I would like to thank Andy for the strong progress made under his leadership,” said chief executive officer Omar Abbosh.

“Pearson saw strong strategic and operational progress in 2023 leading to financial performance ahead of our initial expectations.

“The group is well positioned to seize growth opportunities and deliver long-term future value for all of our stakeholders - I look forward to leading the next phase in Pearson's ongoing evolution.”

Pearson said it would release its full-year results for 2023 on 1 March, and provide a business and strategic update at its interim results in July.

At 0840 GMT, shares in Pearson were down 1.73% at 963.2p.

Reporting by Josh White for Sharecast.com.