Pearson reports 'strong rebound' as it launches student subscription app

Pearson’s underlying revenue increased by 17% in the first half of 2021, reflecting a “strong rebound” from last year, and “encouraging momentum in the underlying business”. The company has also announced a new subscription app for students launching in the US today, called Pearson+.

Sales for the first half to 30th June 2021 were up 7% compared to last year, totalling £1.6bn, up from £1.5bn the year before. It recorded an adjusted operating profit of £127m for the first half, compared to a loss of £23m a year earlier.

C.e.o. Andy Bird, the former chair of Walt Disney International who joined the company in October last year, said the company had made “good strategic, operational and financial progress”.

Global online learning is up 25%, driven by strong growth in virtual schools in the US. Global assessment also grew by 34% with growth across all divisions, following the closure of test centres and schools and exam cancellations in 2020. North American courseware was up 2%, driven by a recovery in Canada, which offset a 2% decline in US higher education courseware.

The company’s statutory operating profit stood at £9m for the first half, compared to £107m last year, with the decrease due to the profit on disposal of Penguin Random House in 2020 and restructuring costs in 2021, partially offset by improved trading and reduced intangible charges.

Bird said: “The results reflect the ongoing benefits of an increased enrolment in online learning, together with a strong rebound this year following the impact of the pandemic on our performance last year. They also reflect encouraging momentum in the underlying business as we start to see the benefits of my revised strategy, introduced in March."

Chief finance officer Sally Johnson said Pearson’s reorganisation is “well progressed” in terms of office space and the move to hybrid working has gone down “really positively”. She also confirmed that while Pearson will follow government requirements in each jurisdiction they have a presence in, “Pearson won’t personally be asking people to be double jabbed” when they return to the office.

The new US college learning app Pearson+ will be “a clear priority” for Pearson. Bird said it provides students “with a very different type of experience from what Pearson has ever offered before” and is an “engaging, flexible and affordable way to access e-books and study tools”. It will cost $9.99 a month for a single e-book or $14.99 month for multi-access use. Students will need to sign on for an initial minimum period of four months.

He said: “Everything you need to learn will be in the app. It provides a learning experience that looks and feels like the rich media experiences students use to consume news, music and movies, with a unique, budget-friendly subscription plan. It shows how we’re moving away from ownership to an access model and to building direct relationships and insights with consumers. Importantly, it will enable us to accelerate the recapture of the higher education sales lost to the second-hand market.”

When questioned, Bird confirmed there are “extensive plans to roll out the model more broadly internationally, including into the United Kingdom”.