30th Jul 2021 09:50
(Alliance News) - Education publisher Pearson PLC declared an interim payout on Friday as it reported a sharp drop in profit despite a modest increase in sales.
The FTSE 100-listed company booked just GBP4 million in pretax profit for the six months that ended on June 30, down 88% from GBP35 million a year before.
Sales rose 7.0% to GBP1.60 billion in the first half from GBP1.49 billion, the London-based company said.
Sales gains were offset by higher operating expenses - up 3.3% to GBP744 million from GBP720 million a year prior - and a turn from other net gains of GBP181 million a year prior turned to a GBP6 million loss in the first half of 2021.
Nevertheless, Pearson swung to GBP127 million in adjusted operating profit from a GBP23 million loss a year before.
Shares in Pearson were trading up 2.5% at 865.00 pence each in London on Friday morning.
The company declared an interim dividend of 6.3 pence per share, up 5% from the 6.0p interim dividend paid in 2020.
Chief Executive Andy Bird said the company was on track to meet current market expectations after making "good strategic, operational and financial progress in the first half of 2021 leading to healthy revenue and profit growth in the period".
Previously, the firm said it expects year-on-year revenue growth in 2021, with adjusted operating profit in line with current market expectations.
Virtual Learning revenues are expected to remain flat until 2022, as discontinued programs offset underlying growth, the company said.
Pearson noted that anticipated decline in Higher Education sales has slowed in recent years despite continuing. Higher Education sales fell 8% year-on-year to GBP358 million from GBP391 million, but showed 1% underlying growth.
After a strong performance in the second half of 2020, School Assessment growth is expected to compensate for performance in Professional Certification.
Pearson said its international markets have reopened more slowly than hoped due to new Covid-19 variants. Its English Language Learning area has been impacted by reductions in migration and the Australian lockdown, the publisher said.
Meanwhile, the company's Virtual Learning segment swung to a profit of GBP14 million in the first half from a GBP6 million loss a year prior after seeing a 12% rise in sales to GBP353 million in the first half from GBP314 million a year prior.
"Whilst there's still much to do in the second half, with the key back to school selling season ahead of us and notwithstanding ongoing Covid-related uncertainty in some of our major markets, we are moving with pace and purpose and we remain on track to meet current market expectations," Bird concluded.
By Scarlett Butler; [email protected]
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