Pearson forecasts lower 2020 profits

Pearson has has said it expects profit to fall in 2020, in its full year results.

The educational publisher issued a 2020 profit warning last month.

Adjusted operating profit for the year to the end of December rose to £581m from £546m a year earlier, while underlying revenue was flat year on year. Underlying revenue in North America declined 3%, although 'Core' was up 5% and 'Growth' was up 4%. On a statutory basis, operating profit halved, down from £553m in 2018 to £275m in 2019, and sales decreased by 6% to £3.9bn.

Pearson said it expected to deliver 2020 adjusted operating profit of between £410m to £490m, after excluding the contribution from its 25% stake in Penguin Random House, the sale of which to Bertelsmann was announced in December at the same time as c.e.o. John Fallon's retirement. It said to expect US Higher Education Courseware trends to continue, with "heavy declines in print partially offset by modest growth in digital".

Fallon, the company's outgoing chief executive, however said the company was "now well placed, in time, to grow in a profitable and sustainable way".

"With 76% of the company already growing strongly, and all parts of Pearson profitable, we are a simpler and more efficient company, completely focused on empowering people to progress through a lifetime of learning," he said. "The future of learning will be increasingly digital and we have built, by revenue, by far the world's leading digital learning company. We've also built the platform by which we can lead the next generation of digital learning, with an exciting pipeline of new products and services all built around the things that learners care most about - experience, outcomes and affordability. As we benefit from further efficiencies from the investments we have made and deploy our strong balance sheet, Pearson is now well placed, in time, to grow in a profitable and sustainable way."