16th Jan 2025 09:40
(Alliance News) - Pearson PLC on Thursday said it was encouraged by the "growing commercial momentum" around its artificial intelligence offerings, as the firm grew adjusted operating profit last year.
Pearson is a London-based publisher of digital and virtual learning materials for both higher education institutions and professionals.
The FTSE 100-listed firm reported underlying sales growth of 2% in 2024, led by an 8% increase in its English Language Learning division, which saw all three business sub-units contributing to growth, and with Pearson noting the launch of its first AI powered digital language tutor in the fourth quarter of the year.
Close behind was its Workforce Skills segment, which achieved sales growth of 6%, owed to good performances in both Vocational Qualifications and Workforce Solutions.
Assessment & Qualifications saw sales pick up by 3% in 2024, driven by a mix of pricing, contract renewals as well as product launches and growth.
Higher Education sales achieved a modest uplift at 1%, with Pearson accelerating the rollout of AI within its relevant products throughout the fourth quarter. Growth for the year was rooted in gains made in adoption share, enrolments and pricing, said Pearson.
Pearson said group adjusted operating profit for 2024 was in the range of GBP595 million to GBP600 million at constant currency. This compares with market expectations of GBP598 million and 2023's figure of GBP573 million.
Pearson added that its free cash flow conversion for 2024 in excess of 100%. This is ahead of the guidance provided in October of between 95% and 100%.
Thursday's trading update follows Wednesday's announcement that Pearson has entered into a multi-year partnership with Microsoft Corp to transform the future of learning and work with AI
Pearson shares were down 2.4% at 1,263.50 pence on Thursday, having edged up 0.4% on Wednesday. However, the stock is up 29% over the past 12 months.
Chief Executive Omar Abbosh said: "I'm particularly encouraged to see the growing commercial momentum of our AI enhanced offerings and the strategic enterprise partnerships that we have established, such as the latest with Microsoft. These reflect the strength of our proposition and the opportunities that lie ahead.
"The group is well positioned, with continued confidence, as we look to build on our strategic and operational progress and deliver long-term future value for our shareholders."
Pearson will announced its 2024 results on February 28.
By Christopher Ward, Alliance News reporter
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