24th Apr 2020 08:34
(Alliance News) - Pearson PLC on Friday said its trading in the first quarter was in line with its revised expectations, with revenue falling 5% year-on-year in the period.
Shares in Pearson were down 1.0% at 446.70 pence each in London.
The company blamed Covid-19 pandemic for the decline in revenue, and warned that if social distancing is prolonged significantly, its North American and International Courseware businesses will see a "more pronounced effect" as campuses and schools remain closed for longer.
In the quarter to March-end, Global Assessment revenue declined 3%, International revenue by 10%, and North American Courseware revenue by 10%. The lone bright spot was Global Online Learning, where revenue grew 6%.
London-based Pearson has chosen not to furlough staff and is instead re-deploying staff around the business to support the areas of greatest need and opportunity.
Chief Executive John Fallon and Chief Financial Officer Coram Williams have decided to take a temporary pay cut of 25% and 20%, respectively. Chair Sidney Taurel and non-executive directors are also taking a reduction in fees of 50% and 25%, respectively.
At the end of the quarter, Pearson had "significant" financial headroom, with immediately available liquidity of about GBP800 million. Its recently completed simplification programme has also identified GBP50 million in cost savings to be realised in 2021.
CEO Fallon said: "We are in a strong financial position with a healthy balance sheet, low net debt and good liquidity. When the threat of the pandemic eventually eases, it will be even clearer that the future of learning is increasingly digital. Through the crisis, we are continuing to invest in the platform, products and services that will make the next generation of digital learning a reality."
Pearson had previously proposed a final dividend for 2019 of 13.5p, which shareholders will vote on at Friday's annual general meeting.
By Tapan Panchal; [email protected]
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