Pearson trades to expectations in first quarter

Education publisher Pearson was trading in line with expectations in the first quarter, it reported on Friday, with adjusted operating profit and adjusted earnings per share before the costs of restructuring still expected to be £580-£620m and 50p-55p respectively.

The FTSE 100 firm’s sales, which are usually significantly weighted towards the second half of the year, were down 4% in underlying terms in the first three months of 2016. Revenues declined 9% at constant exchange rates, which the board said reflected underlying revenue declines and a change in the revenue model at Connections Education.

Headline sales decreased 6%, with the benefit of the US dollar’s strength against sterling partially offset by the weakness of key emerging market currencies.

Pearson said it made good progress in delivering the simplification and change programmes announced on 21 January, with almost half of the targeted reduction in headcount of 4,000 full-time employees now notified of exit. The remaining reduction will be weighted towards the second half of the year.

The company still expected to incur restructuring costs of £320m in 2016, and to generate annualised savings of around £350m, with £250m of those savings in 2016 and a further £100m in 2017.

“Pearson has had a solid start to the year, in line with our expectations,” said chief executive John Fallon.

“We are making good progress on our simplification plan and in our work to have a bigger impact on student learning, which will in turn support our future growth.”