Pearson has reported flat revenue in its nine-month trading update but that the company is "on track" to deliver underlying profit growth in 2018. C.e.o. John Fallon said there was "still a lot to do" but the company was "performing well competitively" and making "good progress" in its transition to digital.
Following a "good first half" in which underlying sales grew 2%, Pearson provided its third quarter trading update on Wednesday (17th October). Total revenues are flat year-on-year for the first nine months, it shared, driven by flat revenues in North America, 2% growth in Pearson's Core segment and a 4% decline in Growth revenue, all on an underlying basis. Declines in US Higher Education Courseware (of 3%) were offset in part by digital sales growth and better returns and the rest of the company growing in aggregate, it said.
More broadly Pearson revealed it was picking up pace in its Online Program Management (OPM) business, in which it delivered 13% registration growth, while volume growth in Pearson Test of English Academic (PTE Academic) grew by a third (34%).
Penguin Random House was said to be "performing in line with expectations".
C.f.o. Coram Williams said the company's performance was "very much within the range expected", with Pearson still expecting 2018 adjusted operating profit of between £520m and £560m. He also said that Pearson's cost efficiency programme was "progressing well". Net debt at nine months stands at £620m, significantly down compared to last year (2017: £1,312m), and the company is on track to deliver £300m of savings per year by the end of 2019 onwards.
As a result of one-off tax benefits and a lower finance charge, 2018 adjusted earnings-per-share are expected in the range of 68p to 72p.
The company's US K12 business continues to be held for sale.
Fallon commented: "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. 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."