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26th April
2024
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Pearson is on track to achieve 2024 guidance with expected Q1
result and growth momentum for the second half
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Underlying sales growth excluding
OPM1 and
Strategic Review2 of
3%.
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Strong operational progress in all divisions and continued
execution momentum across our 2024 strategic
priorities.
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Continuing to infuse our products with AI and on-track to include
AI features in more than 40 Higher Education titles for the Fall
semester.
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Initial £300m share buyback completed; the previously
announced £200m buyback extension has commenced.
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Omar Abbosh, Pearson's Chief
Executive, said:
"The year has started well. Financial performance was in line with
our expectations, thanks to strong execution across the business,
and we maintain a sharp focus on delivering against the priorities
that I outlined. The year is unfolding as we anticipated, and we
continue to expect an acceleration of growth in the second half,
which will see us achieve our guidance for the full year. We look
forward to providing an update on our strategic progress with our
half year results in July."
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Assessment & Qualifications sales grew 2% after a particularly
strong prior-year performance. VUE, UK & International
Qualifications, and Clinical Assessment all contributed to growth.
US Student Assessment was impacted by reduced scope, and phasing of
some contracts which will normalise in the second half. Pearson VUE
won several new contracts, supporting pipeline growth, including
university entrance tests in the UK and the teacher licence
contract in Georgia. We also renewed two key contracts with the
Project Management Institute and the American Registry of
Radiologic Technologists. Clinical Assessment saw solid trends and
has several product launches planned for the second half. UK &
International Qualifications secured a contract with the UK
Government for England's national curriculum assessment
tests.
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Virtual Schools sales increased 4%, due to the timing of funding
upsides, which is expected to dissipate in Q2. We will be opening
another virtual school in Missouri, in addition to those previously
announced as secured in Pennsylvania and California. We are also
on-track to open 19 additional Career Programmes this year. Virtual
Learning sales decreased 4%. As a reminder, this included the
previously announced OPM ASU contract loss, which benefited sales
through the first half of 2023.
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Higher Education sales were down 4%, in line with our phasing
guidance. Digital registrations increased 3% versus the prior year,
and we are pleased with the engagement we are seeing from both
students and faculty on our AI study tools. We remain on-track to
add this AI feature to more than 40 new titles for the key Fall
sales season, which, along with our partnership with Forage, is
supporting an improvement in our takeaway wins.
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English Language Learning sales increased 22%, with inflationary
pricing in Argentina having a positive impact which will dissipate
through the year as comparative FX rates
normalise3.
Excluding this, sales increased high single digits, in line with
full year expectations. Institutional delivered a very strong
quarter. Pearson Test of English declined slightly due to a strong
comparator, and we expect performance will ramp through the
year.
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Workforce Skills sales grew 9%, in line with our expectations, with
growth of 13% in Workforce Solutions. Vishaal Gupta joined Pearson
on April 15th to lead the division.
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●
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Expect growth momentum in the second half of 2024 with the growth
of Higher Education and normalised comparators for the assessments
businesses.
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●
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In Assessment & Qualifications, we continue to expect low to
mid-single digit sales growth for the year, with sales growth
weighted to H2.
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In Virtual Schools, we continue to expect sales to decline at a
similar rate to 2023, given the previously cited loss of a larger
partner school for the 2024/25 academic year. As a reminder, there
was a weighting of sales to Q1 from Q2 due to the timing of state
funding. We expect to return to growth in 2025.
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●
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In Higher Education, we
remain confident we will return to growth in the second half and
for the full year. We
continue to expect H1 to mirror H2 2023 before the return to
growth.
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●
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In English Language Learning, we continue to expect high single
digit sales growth with growth weighted to the second half given
the outstanding performance in the first half of 2023.
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●
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In Workforce Skills, we continue to expect to achieve high single
digit sales growth.
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Pearson's financial position remains robust, with low leverage and
strong liquidity.
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●
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Moody's improved its outlook for Pearson from Baa3 Stable to Baa3
Positive outlook.
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●
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We completed the £300m share buyback programme that was
initiated last year and have since commenced the previously
announced £200m buyback extension with £88m purchased up
to 24 April 2024.
|
|
Underlying growth
|
Sales
|
|
Assessment & Qualifications
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2%
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Virtual Learning
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(4)%
|
Higher Education
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(4)%
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English Language Learning
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22%
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Workforce Skills
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9%
|
Strategic Review2
|
(100)%
|
Total
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2%
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Total, excluding
OPM1 and
Strategic Review2
|
3%
|
Investor Relations
|
Jo Russell
Gemma Terry
Brennan Matthews
|
+44 (0) 7785 451 266
+44 (0) 7841 363 216
+1 (332) 238-8785
|
|
|
|
Media
Teneo
Pearson
|
Ed Cropley
Laura Ewart
|
+44 (0) 7492 949 346
+44 (0) 7798 846 805
|
Forward looking statements: Except for the historical information contained
herein, the matters discussed in this statement include
forward-looking statements. In particular, all statements that
express forecasts, expectations and projections with respect to
future matters, including trends in results of operations, margins,
growth rates, overall market trends, the impact of interest or
exchange rates, the availability of financing, anticipated cost
savings and synergies and the execution of Pearson's strategy, are
forward-looking statements. By their nature, forward-looking
statements involve risks and uncertainties because they relate to
events and depend on circumstances that will occur in future. They
are based on numerous assumptions regarding Pearson's present and
future business strategies and the environment in which it will
operate in the future. There are a number of factors which could
cause actual results and developments to differ materially from
those expressed or implied by these forward-looking statements,
including a number of factors outside Pearson's control. These
include international, national and local conditions, as well as
competition. They also include other risks detailed from time to
time in Pearson's publicly-filed documents and you are advised to
read, in particular, the risk factors set out in Pearson's latest
annual report and accounts, which can be found on its website
(www.pearsonplc.com). Any forward-looking statements speak only as
of the date they are made, and Pearson gives no undertaking to
update forward-looking statements to reflect any changes in its
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conditions or circumstances on which any such statement is based.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
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PEARSON
plc
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|
Date: 26
April 2024
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By: /s/
NATALIE WHITE
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------------------------------------
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Natalie
White
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Deputy
Company Secretary
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