Search Share Prices
Pearson FY adjusted profits at top end of expectations
Educational publisher Pearson said full year adjusted operating profit fell 9% to £576m - at the top end of its upwardly-revised October 2017 guidance range - and announced that it was putting its US K12 business up for sale.
Total underlying revenues declined 2% due to a decline of 4% in North America partly offset by stabilisation in the core and growth division.
The final dividend was cut to 12p a share from 34p, making a total of 17p a share.
Pearson has faced difficulties in its US operations for some time as students started to make the switch to renting textbooks instead of buying them and online learning became more prevalent. The company said it was in talks to offload the troublesome unit.
Statutory operating profit for the year was £451m against a loss of £2.5bn a year earlier.
The company said it expected 2018 adjusted operating profit of £520m - £560m and adjusted earnings per share of 49p to 53p.
The base for 2018 adjusted operating profit guidance is 2017 adjusted operating profit of £510m, being £576m less the full year impacts of disposals made in 2017 (£44m) and less favourable exchange rates at 31 December 2017 (£22m).
"We expect ongoing headwinds in our US higher education courseware to be offset by improving conditions in our other businesses," Pearson said.
"We are making faster progress than expected in some areas and this is reflected in the phasing of costs and benefits."
"Restructuring costs in 2017 were around £80m, slightly higher than our guided £70m and we now expect restructuring costs of £90m in 2018 and £130m in 2019 with further incremental savings, building on the £15m delivered in 2017, of £80m in 2018, £105m in 2019 and £100m impacting 2020.