Postautor: slayer74 » 01 sie 2022 23:32
Investing.com -- London-listed shares in Pearson PLC (LON:PSON) jumped in early European trading on Monday, after the British education products group backed its full-year profit guidance and said its planned digital transformation is making progress.
The company, which is aiming to refocus the business on bringing educational offerings direct to consumers, said its annual revenue and adjusted operating profit estimates are unchanged.
Pearson added that its margin expectation for 2023-2025 has improved, thanks in part to £100M in cost reductions as it revamps the business.
"[T]he more integrated platform we are building across the company is creating efficiencies, underpinning our new guidance for accelerated margin improvement," Pearson said.
Meanwhile, the firm posted a 22% rise in first-half adjusted operating profit to £160M on sales growth of 6% to nearly £1.79B.
Boosting the results was a normalization of exam timetables following COVID disruptions, as well as stronger performance at its health-centered clinical assessment division. These trends helped offset price inflation, portfolio investments, and the phasing-out of costs from last year.
The earnings come after Pearson rebuffed several takeover attempts from buyout group Apollo, saying the offers "significantly undervalued the company and its future prospects."
In March, Pearson said it remained "confident" that its digital strategy will lead to sustainable long-term returns for its shareholders.
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LONDON (Reuters) -Pearson expects its margins to hit a mid-teen target earlier than expected after the education group's new integrated structure helped it to cut costs, grow the top line and keep it on track for the full year.
Emerging from years of turbulence sparked by the U.S. education market moving online, Pearson under new boss Andy Bird is starting to see the fruits of a strategy to sell directly to consumers as they move through school, college and work.
It said on Monday that it was enjoying strong demand for professional certifications in the tech and clinical industries, while its English Language Learning and Virtual Learning courses were seeing strong retention rates.
"We're seeing clear operational and financial benefits from being a more integrated, holistic company. And that's reflected in our performance," Chief Executive Bird said of half-year underlying sales up 6% and adjusted operating profit up 22%.
In March, the company rejected three takeover offers from U.S. group Apollo, with the third valuing each share at 870 pence. Its shares rose 7% on Monday, to 811 pence per share, giving it a market value of 6 billion pounds ($7.32 billion).
Pearson said its new structure of five divisions, underpinned by a direct to consumer team, had helped to identify 100 million pounds of costs that could be cut by next year, bringing a mid-teen margin target forward to 2023, from 2025.
Its first-half growth was driven by its Assessment & Qualifications business, with underlying sales growth up 16%, and English Language Learning up 22%. Its Higher Education unit, long the source of profit warnings, fell by 4%, as expected.
A weak update from U.S. group Coursera last week had prompted some analyst concerns about the strength of student enrolments. Pearson said however that any increased pressure on enrolments would be offset by growth elsewhere.
Analysts at Citi said the update would result in an around 20% upgrade for 2023 earnings. "We see Pearson's 1H results derisking both short- and medium-term forecasts," it said.
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