17th Oct 2018 08:20
LONDON (Alliance News) - Pearson PLC said Wednesday it is on track to meet its 2018 expectations after nine months of trading.
Shares in Pearson were up 5.6% at 864.40 pence each, the best performer in the FTSE 100 in morning trading in London.
The education publisher said total revenues were flat year-on-year to the nine months ended September.
Pearson said revenue at US Higher Education Courseware division is down, but this was offset by the rest of the company growing in aggregate.
The division suffered delivery delays in the third quarter, "moderately impacting" revenue, due to the implementation of new enterprise software systems. Pearson expects the timing effect to "largely" reverse in the fourth quarter.
The company's Online Program Management division saw "good" revenue growth in the first nine months of the year, with global course registrations up 13%.
This drove a 2% rise in revenue in Pearson's Core segment. The "strong" growth seen in its Pearson Test of English Academic, rising 25%, also aided the segment's growth.
"We are on track to return to underlying profit growth and, with a strong balance sheet, are set up well for the future. We are picking up the pace in our growth opportunities, performing well competitively and making good progress in our digital transformation," said John Fallon, chief executive.
"There's a lot still to do, but we are increasingly excited about the opportunity to help learners acquire the knowledge and skills to succeed in a fast changing world."
Pearson's adjusted operating profit guidance for the full year remains unchanged at between GBP520 million to GBP560 million.
For 2017, Pearson recorded adjusted operating profit of GBP576 million.
As a result of one-off tax benefits, and the resulting lower finance charge, the company expects its adjusted earnings per share for 2018 to be between 68.0p to 72.0p.
Pearson said it had expected its adjusted effective tax rate to be 20% but now has revised this to a credit of 5% to 7%. This resulted in lowered finance costs of GBP30 million, previously expected to be GBP45 million.
Provision releases following the expiry of relevant statutes of limitation, resulting in the reassessment of historical tax positions, and US tax reform led to the change in tax guidance.
For 2017, the company's adjusted earnings per share were 54.1p.
Pearson expects its net debt to be in line with 2017. At the end of September, Pearson's net debt was GBP620 million but for the full year in 2017 net debt was GBP400 million.
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