LONDON--Pearson PLC (PSON.LN) said on Monday it will cut jobs as
part of a new restructuring plan, as the U.K.-based publisher
sharpens its focus on digital education and high-growth markets in
a bid to restore growth.
Chief Executive John Fallon, who took the reins from Marjorie
Scardino last month, said the 150 million pounds ($227.1 million)
restructuring plan will affect the company's educational publishing
operations around the world.
He declined to quantify the job losses, but said they too will
be made globally. Pearson had more than 48,000 full-time members of
staff at the end of 2012, up from 33,000 in 2008.
The world's largest publisher of educational materials aims to
save about GBP100 million a year from 2014 and reinvest it in its
digital, services and emerging-markets operations. It also plans
further restructures, including at Penguin Random House, which was
created in a merger with a unit of Bertelsmann SE last year.
The news came as Pearson, which also publishes U.K. newspaper
the Financial Times, posted a steep fall in net profit for 2012 to
GBP326 million, from GBP957 million a year earlier, hit by costs
related to the recent closure of an apprenticeship business it
bought for GBP99 million in 2010.
In 2012, the company booked GBP113 million in closure costs
related to the apprenticeship business, Pearson in Practice. Its
2012 result was also hurt by the loss of earnings following the
sale of its 50% stake in stock and bond index company FTSE
International Ltd. The 2011 figure was inflated by a GBP412 million
profit on the sale of the stake in FTSE International.
The company said it expects tough trading conditions and
structural change within the industry to continue.
Pearson is keen to take advantage of an increasing shift among
students and teachers toward online learning. In 2012, for the
first time in Pearson's history, its digital and services
businesses contributed to 50% of Pearson's sales.
But concerns have arisen about Pearson's growth prospects,
particularly in North America, its largest business area, where
schools and universities are facing budget cuts. Its North America
business posted a 3% rise in 2012 adjusted operating profit,
compared with 11% growth at its international education operations,
where sales are underpinned by rising enrollment numbers in
emerging markets. The adjusted operating figure excludes currency
movements and product changes.
Excluding restructuring costs, Pearson expects 2013 operating
profit and adjusted earnings per share to be flat compared with
2012.
Mr. Fallon also on Monday ruled out the sale of the Financial
Times, whose fit with the company has come under question.
"I've said that the FT is a valued and valuable part of
Pearson," Mr. Fallon told reporters on a conference call. "I have
said the business is not for sale, nor have we initiated,
conducted, encouraged in any shape or form any sort of process
whatsoever. Nor have I had any conversations with anybody about the
sale of the FT."
Annual sales from continuing operations rose 5.0% from a year
earlier to GBP5.06 billion, Pearson said.
The company declared a final dividend of 30 pence a share, up 7%
from 42 pence in 2011 and taking the total for the year to 45
pence.
Write to Lilly Vitorovich at lilly.vitorovich@dowjones.com
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