- Shares up 6% over past year
- Underlying sales rise 5% to £3.7 billion
- Free cash flow of £387 million
Shares in Pearson (PSON) improved 4% to 998.2p after the education media group reported a positive set of results for the year to December 2023.
The FTSE 100 company reported a rise in adjusted operating profit from £456 million to £573 million.
EPS (earnings per share) rose 12.4% to 58.2p and Pearson treated shareholders to a 6% hike in the full year dividend to 22.7p.
Pearson also announced it will be extending its £300 million share buyback programme by £200 million.
In terms of the divisional performance, revenues for Assessment & Qualifications were up 7% – with a robust performance from Pearson Vue.
However, the company suffered a 20% year-on-year fall in revenues for Virtual Learning due to a contract loss.
INAUGURAL SET OF RESULTS
These were Pearson’s first set of results under new CEO Omar Abbosh, who took over from Andy Bird on 8 January 2024 and previously worked for Microsoft (MSFT:NASDAQ).
Given his technology background, it came as no surprise to investors that Abbosh highlighted the importance of artificial intelligence (AI) for Pearson.
He said the company can benefit from ‘the inflection point we see with the development of AI. I am optimistic about the opportunities this advancement in technology brings.’
Pearson shares on a roll after profit guidance upgrade and hiring a new CEO
AI OPPORTUNITIES
Earlier in the week, the education media group announced plans to further expand its beta AI study tools into additional Pearson+ eTextbooks.
Pearson’s chief product officer, Tony Prentice said: ‘Generative AI tools are an increasingly popular feature for thousands of students in both Pearson+ eTextbooks and in Pearson’s MyLab and Mastering homework platforms.
‘Now, even more students will benefit, with at least 40 maths, science, business, and nursing titles available for back to school in both products.’
ROBUST PERFORMANCE
Shore Capital analyst Roddy Davidson said: ‘We are pleased to note the robust performance, momentum, and positive nature of accompanying outlook comments highlighted above – and retain our view that Pearson is well placed to benefit from a positive outlook for global learning spend across a variety of sectors and to enhance its offering via the next stage of its digital journey.’
