Pearson posts better-than-forecast rise in FY earnings

Educational publisher Pearson reported a better-than-expected rise in annual profits driven by revenue growth and cost savings and said it would grow sales by low to mid single digits this year.

The company on Friday reported an 11% rise in adjusted operating profit to £456m, compared with a company compiled consensus forecast of £446m. Pre-tax profit nearly doubled, hitting £323m, up from £177m the year before.

Pearson added that profit on the same basis was on track to meet a current consensus forecast of £585m.

Revenue rose 5% on an underlying basis to £3.8bn driven by increases across most of its divisions with the exception of higher education, which fell 4% due to a decline in enrolments and a loss of adoptions to non-mainstream publishers, including open educational resources, partially offset by improved pricing.

Sophie Lund-Yates, analyst at Hargreaves Lansdown said the return of global movement after the Covid pandemic helped Pearson's English test revenues soar, as well as strong growth in its workforce skills unit.

“Times of economic difficulty are often seen in conjunction with people upskilling, which is a structural opportunity for Pearson.”

Reporting by Frank Prenesti for Sharecast.com