Pearson (PSON)

Sector:

Media

Index:

FTSE 100

1,042.00p
   
  • Change Today:
      7.00p
  • 52 Week High: 1,046.50
  • 52 Week Low: 754.00
  • Currency: UK Pounds
  • Shares Issued: 683.00m
  • Volume: 1,246,901
  • Market Cap: £7,117m
  • RiskGrade: 238

Pearson says profit will fall in 2020

By Sean Farrell

Date: Friday 21 Feb 2020

LONDON (ShareCast) - (Sharecast News) - Pearson said it expected profit to fall in 2020 after the education publisher posted a 6% increase in profit for 2019.
Adjusted operating profit for the year to the end of December rose to £581m from £546m a year earlier as underlying revenue was unchanged at £3.9bn. Unadjusted operating profit halved to £275m from £553m as sales fell 6% to £260m.

Pearson forecast adjusted operating profit between £410m and £490m for 2020 excluding the contribution from its 25% stake in Penguin Random House. It said the sale of the business would have a £65m impact on profit.

The FTSE 100 company's shares fell 3.4% to 564p at 09:30 GMT. The shares have fallen 13% in 2020.

Pearson said 2019 unadjusted operating profit fell because of reduced gains on disposals and higher intangible and restructuring charges. Unadjusted sales dropped because the company disposed of businesses.

Pearson is carrying out a major restructuring programme to cut costs, shift to digital publishing and focus entirely on education. Chief Executive John Fallon announced his retirement in December three months after the company issued a profit warning.

In 2019 underlying sales at the North American division, Pearson's biggest business, fell 3% to £2.5bn as US higher education courseware sales dropped 12%. Sales rose 5% at its core division to £838m and 4% to £497m in growth markets leaving total adjusted sales flat.

The company said it expected US higher education to continue losing sales in 2020 with heavy print declines partly offset by new digital products. Other businesses will have low single-digit sales.

Fallon said: "With 76% of the company already growing strongly, and all parts of Pearson profitable, we are a simpler and more efficient company ... As we benefit from further efficiencies from the investments we have made and deploy our strong balance sheet, Pearson is now well placed, in time, to grow in a profitable and sustainable way."

Fallon has run Pearson for seven years in which he has sold non-core but prestigious assets such as the Financial Times and its Penguin Random House stake. He will leave when his successor has been appointed.

Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Fallon's decision to shift from textbooks to digital products had proved correct as sales of physical books tumbled in the US but that it had lost market share because people were reluctant to pay top prices for ebooks.

There is light at the end of the tunnel though. As North American courseware shrinks, its impact on group numbers will also diminish and the growing digital and assessment services will become the driving force behind performance. The incoming management team will be relieved about that.

"We see Pearson as a textbook example of the risks incumbents face from digital disruption," Hyett said. "There is light at the end of the tunnel though. As North American courseware shrinks, its impact on group numbers will also diminish and the growing digital and assessment services will become the driving force behind performance. The incoming management team will be relieved about that."





Email this article to a friend

or share it with one of these popular networks:


Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Pearson Market Data

Currency UK Pounds
Share Price 1,042.00p
Change Today 7.00p
% Change 0.68 %
52 Week High 1,046.50
52 Week Low 754.00
Volume 1,246,901
Shares Issued 683.00m
Market Cap £7,117m
RiskGrade 238

Pearson Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
91.64% below the market average91.64% below the market average91.64% below the market average91.64% below the market average91.64% below the market average
86.36% below the sector average86.36% below the sector average86.36% below the sector average86.36% below the sector average86.36% below the sector average
Price Trend
84.57% above the market average84.57% above the market average84.57% above the market average84.57% above the market average84.57% above the market average
78.72% above the sector average78.72% above the sector average78.72% above the sector average78.72% above the sector average78.72% above the sector average
Income
60.86% below the market average60.86% below the market average60.86% below the market average60.86% below the market average60.86% below the market average
68.42% below the sector average68.42% below the sector average68.42% below the sector average68.42% below the sector average68.42% below the sector average
Growth
4.82% below the market average4.82% below the market average4.82% below the market average4.82% below the market average4.82% below the market average
9.09% below the sector average9.09% below the sector average9.09% below the sector average9.09% below the sector average9.09% below the sector average

What The Brokers Say

Strong Buy 3
Buy 5
Neutral 4
Sell 0
Strong Sell 1
Total 13
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Pearson Dividends

  Latest Previous
  Final Interim
Ex-Div 21-Mar-24 10-Aug-23
Paid 03-May-24 18-Sep-23
Amount 15.70p 7.00p

Trades for 28-Mar-2024

Time Volume / Share Price
16:35 732,647 @ 1,042.00p
16:35 1,520 @ 1,042.00p
16:35 8,978 @ 1,042.00p
16:35 5,787 @ 1,042.00p
16:35 2,773 @ 1,042.00p

Top of Page