Pearson PLC Trading Statement (1687X)
April 26 2019 - 2:01AM
UK Regulatory
TIDMPSON
RNS Number : 1687X
Pearson PLC
26 April 2019
Pearson 2019 Q1 Trading Update (Unaudited)
26(th) April 2019 Pearson, the world's learning company, is today
providing an update on Q1 trading.
===================== ===================================================================
Highlights Underlying revenue up 2%, operating performance
on track
* Revenue grew 2% in North America, 4% in Core and was
flat in Growth.
* We remain on track to deliver annualised cost savings
in excess of GBP330m(1) exiting 2019.
* We completed the sale of our US K12 Courseware
business at the end of the quarter.
* Our guidance for 2019, after adjusting for IFRS 16
and the disposal of US K12 Courseware, remains
unchanged. We expect to deliver adjusted operating
profit of between GBP590m to GBP640m.
* This guidance includes a post-IFRS 16 net interest
charge of GBP60m, a tax rate of 21% to give an
adjusted earnings per share range of 53.5p to 59.0p.
This is based on the exchange rates at 31 December
2018.
* Q1 net debt was down year-on-year at GBP0.5bn (2018:
GBP0.6bn) on a pre-IFRS 16 basis. On a post-IFRS 16
basis, Q1 net debt was c.GBP1.2bn.
* We continue to accelerate our digital transformation
with momentum in key structural growth opportunities
and the launch of a suite of digital products and
capabilities for the back to school period this year,
including:
o The commercial launch of Revel, our fully integrated
digital courseware product, on our new global
learning platform
o The introduction of our first AI powered math
tutor as a mobile app marketed to calculus students,
and
o Ongoing development of our first AI powered
essay marker, which will adapt to the professor's
personal style.
===================== ===================================================================
John Fallon, Chief Executive said:
"We are off to a strong start to the year, having laid good foundations
in 2018. We continue to make progress against our strategic priorities,
and we are bringing exciting new products and capabilities to market
in 2019 which will continue to accelerate our move to digital. We
expect our sales to stabilise this year and to increase our underlying
profit further."
==========================================================================================
Financial summary
===================== ===================================================================
Underlying growth
Sales
North America 2%
Core 4%
Growth 0%
Total 2%
Notes
Throughout this announcement: growth rates are stated on an
underlying basis unless otherwise stated. Underlying growth rates
exclude both currency movements and portfolio changes.
(1) Based on December 2018 exchange rates, a significant part of
costs and savings from the restructuring programme are US Dollar
denominated and in other non-Sterling currencies and are therefore
subject to exchange rate movements over the implementation
timeframe.
Q1 Trading
In North America, revenue grew 2% in underlying terms with good
growth in Online Program Management (OPM) and Virtual Schools which
benefited from new partnerships and strong enrolment growth as well
as Professional Certification which saw good volume growth in key
segments including IT, Healthcare and Teacher Certification. This
was partially offset by a slight decline in revenue from US Higher
Education Courseware.
Our guidance for US Higher Education Courseware in 2019 remains
unchanged: we expect net sales to be flat to down 5% for the full
year. Q1 revenue was in line with expectations, declining slightly
against a strong comparative in Q1 2018, which was helped by the
absence of the additional returns provision we took in Q1 2017.
In our Core segment (which includes the UK, Australia and
Italy), revenue grew 4% in underlying terms, helped by good growth
in Pearson Test of English Academic and OPM as well as phasing in
Courseware in the UK and Europe.
In our Growth segment (which includes China, Brazil, South
Africa and India) revenue was flat in Q1 2019, with growth offset
by timing of orders in China and Brazil. We continue to expect
growth in this segment in 2019 weighted towards the second half of
the year.
At Penguin Random House, trading is in line with our
expectations.
We will hold a conference call for analysts at 8.30am today
Friday, 26(th) April to discuss our first quarter results. A replay
will be available soon after on our website www.pearson.com. Our
AGM will begin today at 12 noon at IET London, 2 Savoy Place,
London WC2R 0BL.
Contacts
Jo Russell, Tom Waldron, Anjali
Investor Relations Kotak +44 (0) 207 010 2310
======================= ================================================== ===============================
Media Tom Steiner +44 (0) 207 010 2310
======================= ================================================== ===============================
Charles Pretzlik, Nick Cosgrove,
Brunswick Simone Selzer +44 (0) 207 404 5959
======================= ================================================== ===============================
Webcast details Analyst and investor conference call details:
United Kingdom Toll-Free: 08003589473
United Kingdom Toll: +443333000804
PIN: 86680070#
URL for international http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf
dial in numbers
Forward looking statements: Except for the historical
information contained herein, the matters discussed in this
statement include forward-looking statements. In particular, all
statements that express forecasts, expectations and projections
with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the
impact of interest or exchange rates, the availability of
financing, anticipated cost savings and synergies and the execution
of Pearson's strategy, are forward-looking statements. By their
nature, forward-looking statements involve risks and uncertainties
because they relate to events and depend on circumstances that will
occur in future. They are based on numerous assumptions regarding
Pearson's present and future business strategies and the
environment in which it will operate in the future. There are a
number of factors which could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements, including a number of factors outside
Pearson's control. These include international, national and local
conditions, as well as competition. They also include other risks
detailed from time to time in Pearson's publicly-filed documents
and you are advised to read, in particular, the risk factors set
out in Pearson's latest annual report and accounts, which can be
found on its website (www.pearson.com/corporate/investors.html).
Any forward-looking statements speak only as of the date they are
made, and Pearson gives no undertaking to update forward-looking
statements to reflect any changes in its expectations with regard
thereto or any changes to events, conditions or circumstances on
which any such statement is based. Readers are cautioned not to
place undue reliance on such forward-looking statements.
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END
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