Pearson positive about profit growth despite sales in SA pulling it down
The British education firm is rebuilding as a digital learning company after major pressures in its US higher education division
London — British education company Pearson said it was on track to return to profit growth in 2018, despite pressures in its US higher education textbook business wiping out earlier sales gains.
Pearson, rebuilding as a digital learning company after major pressures in its US higher education division, said underlying revenue came in flat for the nine months, compared with a 2% rise in the first half of the year.
Its “growth” unit was held back by weak sales in SA.
Pearson's South African educational arm has been a wholly owned subsidiary since August 2013 when it bought the 15% still owned by Caxton for R703.3m. Caxton owned half Pearson's South African text book publisher, Longman, until 2009.
The reiteration of the profit outlook may provide some reassurance, however, as the group earns about 80% of its income in the second half, making this a key period for the company.
The British group also said it expected a one-off tax benefit and resulting lower finance charges to boost 2018 adjusted earnings per share into the range of 68 UK pence to 72p, compared with a previous forecast of up to 53p.
Pearson said it still expects to deliver 2018 adjusted operating profit in the range of £520m to £560m. It says this represents growth when stripping out the impact of disposals.
"We are on track to return to underlying profit growth and, with a strong balance sheet, are set up well for the future," CEO John Fallon said.