Shares in Pearson (PSON) were marginally higher in morning trading to 931p as the education publishing group reported 5% growth in group revenue (excluding the OPM business) for the nine months ending 30 October 2023.

Strong performances came from its Pearson Vue and Pearson Test of English businesses, but Virtual Learning and Higher Education revenue was down 20% and 5% respectively.

‘EXPECTED DECLINES’

Sally Johnson, Pearson CFO told journalists that these revenue declines ‘were expected’ due to exiting from its OPM business and the move from its Higher Education business to become ‘more digitally focused.’

Revenues for Pearson’s English Language Learning business was up 34% with volume growth ‘primarily driven by Australia and India’ and is talks with the Canadian government to expand into the Canadian student market.

The firm also upgraded its full year adjusted group operating profit guidance by circa £20 million to a range between £570 million to £575 million. 

A for share buybacks, Pearson had already purchased £115 million of its own shares as of 27 October as part of its previously announced £300 million programme. 

Pearson CEO Andy Bird also took the opportunity to announce the start date of new CEO and executive director Omar Abbosh – 8 January 2024.

Bird announced his retirement from the business on 20 September 2023, he will stay with the company until 31 March 2024 ‘to ensure a smooth transition.’

Abbosh has 30 years of experience in enterprise technology.

GENERATIVE ARTIFICIAL INTELLIGENCE PROGRESS

Bird told journalists that the education publishing group was continuing to make progress in the field of generative AI. ‘We are continuing to work on augmented and virtual reality [and] AI is very much in its early stages with ChatGPT launched only 12 months ago. 

‘We’ve received positive initial feedback from our Generative AI tools and  are evolving our AI capabilities to create further opportunities to maximise the potential of our trusted, proprietary content and data sets.’

Bird add that ‘challenges’ need to be addressed (industry wide) related to plagiarism and governance.

Bird said that Pearson has no plans for a dual listing in the US, ahead of its investor day in New York on 6 November: ‘We do have a lot of interest from our US investor base, but this is something we are not going to be pursuing at present.’

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