Pearson revenues edge up 1% in Q1, reaffirms guidance

Education publisher Pearson said on Friday that total underlying revenues edged up 1% in the first quarter and that it was on track to deliver its expectations for the year.

Growth in North America and the core business was partially offset by a drop in Pearson’s growth segment due to the phasing of sales in its South African school courseware business.

In North America, revenues were up 3% in underlying terms during the quarter, with slight growth in US higher education courseware, due to lower returns from the channel, and good growth in Online Program Management (OPM), student assessment, Professional Certification and Connections Virtual Schools. This was partially offset by expected declines in Learning Studio, a learning management system that is being retired.

In the company’s core segment, which includes the UK, Australia and Italy, underlying revenues were 6% higher, partly helped by phasing, but with good growth in Pearson Test of English and in OPM.

Meanwhile, the growth segment, which includes Brazil, China, India and South Africa, saw revenues drop 12% as good growth in China and the company’s Wizard English language schools in Brazil were offset by a decline in South Africa school courseware, as the previous quarter benefited from an unusually large order.

At Penguin Random House, trading was in line with the group’s expectations.

Pearson maintained its guidance for 2018 operating profit of between £520m and £560m, adjusted earnings per share of 49p to 53p and cash conversion in excess of 90%. The group also said it is on track to deliver £300m of annualised cost savings by 2020, with cumulative savings of £95m by the end of this year.

Chief executive John Fallon said: "We have made a good start to 2018, performing in line with our expectations. We continue to make good progress against our strategic priorities including our digital transformation and we expect to grow underlying profit in 2018."