Pearson PLC 6-K, filed Oct 24, 2022
Pearson PLC (PSO)
6-K
2022-10-24
For: 2022-10-24
View Original
Added on
April 08, 2026
About this 6-K
Pearson PLC filed this 6-K on October 24, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of October
2022
PEARSON plc
(Exact
name of registrant as specified in its charter)
N/A
(Translation
of registrant's name into English)
80 Strand
London, England WC2R 0RL
44-20-7010-2000
(Address
of principal executive office)
Indicate
by check mark whether the Registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F
X
Form 40-F
Indicate
by check mark whether the Registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934
Yes
No X
Pearson 2022 Nine Month Trading Update
(Unaudited)
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24 October 2022
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Strong nine month results with continued operational and
strategic momentum
- Group on track for full year expectations
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Highlights
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Group underlying sales up 7%. Full year sales and adjusted
operating profit expectations reaffirmed.
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Strong trading performance with an outstanding result in English
Language Learning and a good performance in Virtual Learning,
Workforce Skills and Assessment & Qualifications, offset by an
expected decline in Higher Education.
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Delivering strategic progress; reshaping our portfolio and
increasing interconnectivity between divisions to unlock synergies
and lifelong learning potential.
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On track to deliver at least £100m of efficiencies in 2023
which will accelerate improved margin expectations from 2025 to
2023.
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Andy Bird, Pearson's Chief
Executive, said:
"This has been
another good quarter for Pearson and I am pleased with the
continuing momentum the business is demonstrating through our sharp
focus on delivery. We are executing well on our plan for
accelerated margin improvement.
"We believe Pearson is well positioned for the future, and we are
confident of being able to navigate the challenging macroeconomic
environment. We are making strong progress in creating a digital
learning ecosystem which can serve many more people across their
lifetime of learning. This will lead to better outcomes for our
learners and also deliver value for our shareholders and wider
stakeholders."
Underlying sales growth of 7%
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Assessment
& Qualifications sales grew 12% with good performances in
Clinical Assessment due to a continued focus on health and
wellness, as well as US Student Assessment and UK &
International Qualifications, as exam timetables continue to
normalise after COVID-19 disruption.
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Virtual
Learning sales increased 5% underpinned by a good performance in
Virtual Schools. Online Program Management (OPM) grew 3% with
slower enrolment growth than anticipated when we entered the year.
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Higher
Education sales were down 4% with US Higher Education Courseware
sales declining 4%, consistent with our expectations. Pearson+ is
performing well with robust growth versus prior year Fall semester.
17 study channels are live and engagement to date has been
encouraging.
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English
Language Learning sales increased 28%, with strong growth in
Pearson Test of English volumes as global mobility continues to
improve with border re-openings. English Courseware delivered sales
growth across most international markets offset by the ongoing
impact of the reforms in China.
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Workforce
Skills sales grew 9%. Sales in our Performance business, which
includes BTEC and Apprenticeships, grew well. Sales in our
Transformation business, which includes Credly and Faethm, as well
as GED and TalentLens, grew strongly.
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Strategic review sales grew 20% due to the phasing of orders within
our South African business. Following the completion of the
disposals of our international
courseware local publishing businesses in Europe, French-speaking
Canada and Hong Kong these businesses are no longer included
in our underlying sales measure.
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Share buyback
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£350m
share buyback continuing, with over £240m of shares
repurchased as of 30th September
2022.
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2022 outlook reaffirmed*
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Pearson
remains on track to deliver group sales and adjusted operating
profit consensus expectations for FY22.
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Financial summary
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Underlying
growth for the third quarter and nine months ended 30th September
compared to the equivalent period in 2021.
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Sales
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Q3
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Nine months
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Assessment
& Qualifications
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7%
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12%
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Virtual
Learning
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9%
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5%
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Higher
Education
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(4)%
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(4)%
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English
Language Learning
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36%
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28%
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Workforce
Skills
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20%
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9%
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Sub-total
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7%
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7%
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Strategic
review
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20%
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Total
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7%
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Throughout this announcement growth rates are stated on an
underlying basis unless otherwise stated. Underlying growth rates
exclude currency movements and portfolio changes.
*2022 consensus on the Pearson website as at full year 2021; median
adjusted operating profit of £416m at £:$ 1.37. For
reference, each 5c move in USD FX rate equates to approximately
£15m of adjusted operating profit. The disposal of our
strategic review businesses impacts adjusted operating profit by
c.£15m in 2022.
Assessment & Qualifications
Assessment & Qualifications sales
increased 12%.
In Professional Certification (VUE) sales were down 3%
predominantly due to the DVSA contract change.
Clinical Assessment performed well with sales up 9% due
to an ongoing focus on mental health and wellbeing combined with
government funding driving demand for core products and digital
solutions.
US Student Assessment sales grew 32% due to the full resumption of
exams across US states.
In UK & International Qualifications, sales grew 35% due to the
return of exams following COVID-19 disruption.
We expect Assessment & Qualifications to deliver good revenue
growth this year but there will be a tougher comparison in Q4 given
the phasing in 2021 due to COVID-19. We
expect VUE to return to growth in Q4 as the impact of the DVSA
contract loss unwinds.
Virtual Learning
In Virtual Learning, sales
increased 5%.
In Virtual Schools, sales increased by 6% reflecting firm retention
rates relating to the 2021/22 academic year and favourable revenue
mix partially offset by a small decline in enrolments for the
2022/23 academic year, as
the COVID-19 cohort fully unwinds, along
with lower district partnership renewals.
In Online Program Management, sales increased by 3% with growth in
the UK and Australia partially offset by declines in North America
due to lower enrolments. We will update in due course on the
ongoing strategic review of our OPM business.
Higher Education
Higher Education sales were down 4% with US Higher Education
Courseware sales declining 4%, consistent with our expectations.
Early market data for the back to school period shows enrolments to
be down in line with our assumption at the beginning of the year.
We also believe there may have been a loss of market monetisation
due to an increase in non-consumption. As previously highlighted,
growth in Pearson+ subscriptions means that there has also been a
shift in revenue recognition from Q3 to Q4. These impacts have been
partially offset by improved pricing.
Pearson+ is performing very well with robust growth versus prior
year Fall semester. 17 study channels are live and engagement to
date has been encouraging.
English Language Learning
In English Language Learning, sales increased 28% with continued
strong growth in Pearson Test of English volumes for tests taken in
India and Australia, and for tests taken by UK bound people as
global mobility continues to improve with border re-openings, as
well as a limited-time extension of post-study visa applications in
Australia. We also gained market share in India. We expect to have
a strong year overall, although there will be a tougher comparison
in Q4 as borders started to reopen at the end of last year and the
impact of the post-study visa extension in Australia
reduces.
English Courseware revenue was up 4% driven by international growth
across all regions offset by the ongoing impact of the government
reforms in China.
Mondly performance was encouraging, benefitting from access to the
high growth direct to consumer language learning
market. It is
on track with our expectations, contributing to the transformation
of English Language Learning, as well as increasing
interconnectivity across the Group with its recent integration on
Pearson+.
Workforce Skills
Workforce Skills sales grew 9%. Sales
in our Performance business, which includes BTEC and
Apprenticeships, grew well. Sales
in our Transformation business, which includes Credly and Faethm,
as well as GED and TalentLens, grew strongly. Our
Transformation business is the foundation of our new enterprise and
professional consumer strategy on which we are building our
integrated suite of workforce skills solutions for
enterprises.
Strategic Review
Sales in our international courseware local publishing businesses
under strategic review grew 20%. We have now concluded the sales of
our international courseware local publishing businesses in Europe,
French-speaking Canada and Hong Kong. This means these
businesses, which were showing a decline at the half year, are no
longer included in underlying sales growth. The completion of the
sale of our South Africa business is expected in Q4.
The impact
of these disposals on our adjusted operating profit will be
c.£15m in 2022 and just under £25m for 2023. Operating
cashflow for these businesses is weighted to Q4 and the timing of
completions will impact operating cash conversion in 2022. The
retained English-speaking Canadian and Australian K12 Courseware
businesses are now shown within Assessment &
Qualifications.
Strong financial position
Pearson's financial position remains robust, with low net debt and
strong liquidity.
Contacts
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Investor Relations
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Jo
Russell
James
Caddy
Gemma
Terry
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+44
(0) 7785 451 266
+44
(0) 7825 948 218
+44
(0) 7841 363 216
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Teneo
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Charles
Armitstead
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+44
(0) 7703 330 269
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Virtual event
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Pearson's 2022 nine month trading update online presentation taking
place today at 0830 (BST). Register to receive log in
details: https://pearson.connectid.cloud/register
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Notes
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
expectations with regard thereto or any changes to events,
conditions or circumstances on which any such statement is based.
Readers are cautioned not to place undue reliance on such
forward-looking statements.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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PEARSON
plc
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Date: 24
October 2022
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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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