- Shares up 17% over the past year
- 5% rise in third quarter underlying group sales
- £500 million share buyback completed
Shares in Pearson (PSON) were up more than 3% to £11.13 as the education media group said it was on track to meet full year expectations in a third-quarter trading update.
Underlying group sales growth, adjusted operating profit, interest and tax outlook for 2024 remain in line with guidance. Free cash flow conversion is expected to be 95-100%.
The company reported a 5% rise in underlying group sales growth in the third quarter.
Assessment & Qualifications sales were up 3%, Virtual Learning sales were up 4% for the third quarter due to growth in Virtual Schools, with 2024/5 enrolments up 4% on a same school basis.
However, Virtual Learning sales fell 4% for the nine-month period due to Pearson’s OPM (online programme management) contract with ASU (Arizona State University) ending in June 2023.
ARTIFICIAL INTELLIGENCE PROGRESS
The education media group also said it had made progress with ‘scaling AI’ across its products and services.
It reported ‘double-digit year-on-year billings growth in Higher Education products with AI study tools,’ and revealed it is developing an English Language Learning tool, Teaching Pal, to create customised lesson content and activities for students and teachers.
GROWING MARKETS
Roddy Davidson analyst at Shore Capital described Pearson’s third quarter trading update as encouraging.
Davidson highlighted market opportunities (previously identified by Pearson) of around $15 billion in the US and of around $80 billion in core and adjacent markets, with these markets growing around 2% and 5% respectively.
‘It is also encouraging to see signs that the group’s growth strategy is gaining traction. By way of a reminder, the latter is focused on driving the performance of core businesses, unlocking synergies, expanding into adjacent markets, and capitalising on its leading position, structural growth trends, and opportunities created by AI in the context of a very large addressable global learning market,’ said Davidson.
