Pearson PLC on Monday saw its shares slip, after posting a decline in both profit and revenue, but it remained optimistic of future success, believing it will benefit from ‘rapid advances in AI’.
Pearson is a London-based provider of digital and virtual learning materials for both higher education institutions and professionals.
For the six months to June 30, the firm reported pretax profit of £212 million, down 10% from £236 million a year prior. Sales also faltered, declining 6.9% to £1.75 billion from £1.88 billion.
Adjusted operating profit was flat at £250 million, while underlying sales growth was 2%.
According to Pearson, Virtual Schools unit sales declined 1%, reflecting the previously announced contract losses for the current academic year. Meanwhile, Higher Education sales were down 2%, in line with phasing guidance.
The firm nevertheless remained optimistic, noting ‘encouraging signs of progress’ in the business, with Spring adoption data indicating small market share gains.
Costs of goods sold came to £875 million, easing from £960 million the year before, while operating costs fell to £654 million from £688 million.
Pearson raised its interim dividend by 5.7% to 7.4 pence from 7.0p.
For the whole of 2024, it expects underlying sales growth and adjusted operating profit in line with market expectations.
‘We are implementing plans across all of our businesses that will see us deliver better products & services with greater efficiency. We’re also focusing on opportunities to progressively build our presence in materially larger and higher growth markets in which we are well positioned to succeed, with a particular focus on early careers and enterprise skilling,’ said Chief Executive Omar Abbosh, who took on the post in January.
‘Since joining Pearson at the start of the year, I have led a comprehensive review of our business and the markets in which we operate. This process has only reinforced my conviction in the potential of Pearson and the vital role we play in helping people realise the life they imagine through learning. Significant demographic shifts and rapid advances in AI will be important drivers of growth in education and work over the coming years, and this plays to Pearson’s strengths as a trusted provider of learning and assessment services.’
The firm said it would be launching AI tools for instructors for the fall 2024 semester in 25 of its best-selling titles across business, maths, science, and nursing in the US.
Shares in Pearson were trading 3.5% lower at 1,014.00 pence each in London on Monday morning, one of the worst FTSE 100 performers.
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