20th Jan 2021 09:01
(Alliance News) - Pearson PLC on Wednesday said it expects profit and sales for 2020 to be in line with expectations, in spite of the Covid-19 pandemic disrupting business through closed schools and cancelled exams.
For the year, the FTSE 100 education publisher's sales declined by 10% year-on-year, with the only positive performance coming from the group's Global Online Learning business.
Based on the average US dollar and pound sterling exchange rate of 1.28, Pearson expects adjusted operating profit to be be between GBP310 million and GBP315 million, a 46% to 47% drop from GBP581 million the year before.
Sales from Pearson's Global Online Learning grew by 18%, as Virtual Schools performed well with 43% enrolment growth in new and existing schools for the 2020/2021 academic year. There was also a rise in sales from the Online Program Management, from undergraduates and international students.
However, Global Assessment sales declined by 14% year-on-year, with weakness in the Pearson VUE business as test centres were closed in the first half of 2020. For the year as a whole, testing volumes were down 22% to 12.9 million. Despite pent up demand in the second half, this was tempered by further lockdown in the fourth quarter and continued social distancing.
In North American Courseware, sales fell by 13% for 2020, with Canada declining significantly due to the closure of schools and bookstores. However, the rise in digital purchases led to a recovery in the fourth quarter of the year.
Finally, International sales declined by 19% year-on-year, due to the halt in Australian immigration and test centre closures, while budget constraints and school closures led to fewer purchases in South Africa and Brazil.
Pearson's net debt stands at around GBP500 million, and the company has immediately available liquidity of GBP1.9 billion through committed facilities and cash balances.
"Despite facing significant uncertainty, our teams have been laser-focused on closing out 2020, enabling us to report sales and profit for 2020 in line with expectations. Uncertainty remains in the near term as a result of the ongoing pandemic, with further lockdowns, exam cancellations and reduced global mobility. However, I am excited about our future given the shift to online learning and the huge opportunity to help more people develop the skills they need," said Chief Executive Andy Bird.
Pearson will publish its annual results on March 5.
Shares in Pearson were up 7.2% at 728.00 pence on Wednesday in London.
By Dayo Laniyan; [email protected]
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