25th Feb 2022 14:43
(Alliance News) - Shares in Pearson rallied on Friday after the education materials publisher launched a share buyback programme, as it said 2021 brought a strong financial performance.
The stock was up 11% at 668.60 pence in London.
Pearson posted pretax profit of GBP157 million, down from GBP354 million in 2020, on total sales that rose marginally to GBP3.43 billion from GBP3.40 billion.
Operating profit was GBP183 million in 2021, down sharply from GBP411 million in 2020. Pearson said the decrease in 2021 was mainly due to the gain on sale of its remaining interest in Penguin Random House recognised in 2020 and restructuring costs in 2021.
However, adjusted operating profit for 2021 rose 23% to GBP385 million, up 33% at constant exchange rates. This was in line with raised guidance given by the firm in January.
Looking ahead, the company said it is confident of further revenue growth, with adjusted operating profit, interest and tax expected to be in line with current market expectations for 2022.
"Pearson is a digital first business, with consumer grade products, and the momentum across the company underpins our confidence for further growth in 2022 and beyond," said Chief Executive Andy Bird.
Pearson declared a total dividend of 20.5 pence, up 5.1% from 19.5p in 2020. In addition, the publisher said it intends to start a share buyback of GBP350 million in 2022.
On the results, UBS commented: "Shares have been weak into results, and there are two clear positives: (1) No downgrade to consensus 2022E EBIT; (2) The GBP350m buyback. Only negative we see is comment that margins will not improve near term."
By Lucy Heming; [email protected]
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