Numis reiterates 'reduce' rating for Pearson

The company reported a 4% drop in first quarter sales in underlying sales, reflecting expected weakness in assessment revenues in the UK and US which are weighted to the first half. Revenues were down 9% at constant exchange rates and headline sales declined by 6%.

Pearson said it was trading in line with expectations during the period 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 first quarter is the smallest quarter for Pearson and very small in the context of the year,” Numis said.

“We remain comfortable with a Reduce recommendation on Pearson, no change to estimates, we retain a blended multiples based target of 640p.”

Shares fell 1.35% to 803.50p at 0957 BST.