Pearson reports strong first half of 2024 following 'extensive examination' of business

Pearson has reported a stable financial performance for the first half of 2024, with sales dipping very slightly to £1.75bn (2023: £1.8bn) and underlying adjusted operating profit up 4% to £250m. The company’s new chief executive Omar Abbosh has also led an "extensive examination" of the business and stressed how AI would be "an important driver of growth". 

The profit rise of 4% was "driven by trading alongside net cost phasing and savings, partially offset by inflation and restructuring charges in Higher Education, which were weighted to the first half," the report reads. The flat headline growth—£1.75bn compared to £1.8bn—reflected "underlying performance, portfolio changes and currency movements."   

Operating cash flow rose significantly to £129m compared to £79m last year, continuing a strong trajectory in this area (it was only £9m at the same half-year mark in 2022).   

The report, for the trading period up until 30th June 2023, emphasised how a recent review had shaped strategy: "Through an extensive examination of the business and the markets in which we operate, we have identified a targeted market expansion opportunity for Pearson and have updated our strategy to drive higher performance in the core business and unlock new synergies."

Abbosh discussed this further. "Since joining Pearson at the start of the year, I have led a comprehensive review of our business and the markets in which we operate," he said in the report. "This process has only reinforced my conviction in the potential of Pearson and the vital role we play in helping people realise the life they imagine through learning.  

"Significant demographic shifts and rapid advances in AI will be important drivers of growth in education and work over the coming years, and this plays to Pearson’s strengths as a trusted provider of learning and assessment services."

The report also revealed strong engagement with its AI study tools and plans to launch AI tools for instructors this autumn in 25 of its bestselling titles across business, math, science and nursing in the US.

Abbosh added: "We are implementing plans across all of our businesses that will see us deliver better products and services with greater efficiency. We’re also focusing on opportunities to progressively build our presence in materially larger and higher growth markets in which we are well positioned to succeed, with a particular focus on early careers and enterprise skilling.  

"Our good strategic and financial performance in the first half of the year sets us up to achieve our guidance for the current year and for 2025, and we expect thereafter to continue to deliver attractive growth with progressive improvements in our margins alongside consistently strong cash generation."

There has been an influx of new starters at the company. In Workforce Skills, Vishaal Gupta joined Pearson in April to lead the division and Dave Treat joined Pearson as chief technology officer earlier this month. He will report to Abbosh and work closely with with Pearson’s chief product and chief information officers, leading technology innovation and architecture across the company.  

Ginny Cartwright Ziegler joined Pearson on Monday (29th July) as chief marketing officer, succeeding Lynne Frank, who has stepped down from her dual role as chief marketing officer and co-president for direct to consumer.  

Last year’s half-year results were "the highest we’ve seen for at least the last 10 years", the outgoing c.e.o. Andy Bird said ahead of his retirement in January. In its full-year results reported in March, the company reported a 31% increase in adjusted operating profit to £573m.