Report of Foreign Issuer Pursuant to Rule 13a-16 or 15d-16 (6-k)
20 Januar 2021 - 12:14PM
Edgar (US Regulatory)
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 January 2021
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 January Trading Update (Unaudited)
20 January 2021
|
Pearson,
the world's leading learning company, is today providing an update
on full year 2020 trading. Full year results will be announced on
5th March
2021.
|
Sales and profit in line with
expectations for the full year despite additional impact of
COVID-19 in Q4.
Key highlights for the 12 months:
●
Group sales
declined by 10% and we expect to report adjusted operating
profit in the range of £310m-£315m at an average USD:GBP
exchange rate of 1.28; with portfolio changes, inflation and the
trading impact of COVID-19 partially offset
by
restructuring
savings.
●
The challenging
impact of COVID-19 has been felt most acutely across International
and Global Assessment due to test centre and school closures, exam
cancellations, reduced global mobility and international economic
pressure on spending. It
has accelerated
demand for digital learning and performance in Global Online
Learning has been strong. US Higher Education Courseware has
performed in line with expectations, despite
COVID-19.
●
Global Online
Learning sales grew 18% due to strong enrolments in new and
existing schools in Virtual Schools and good sales growth in Online
Program Management (OPM), with growth in continuing programs
partially offset by discontinued
programs.
●
Global Assessment
sales declined 14%, reflecting the impact of test centre closures
during the lockdowns in H1 in Professional Certification, with pent
up demand in the second half partly moderated by Q4 lockdowns.
Cancellation of Spring
testing impacted US
Student Assessment and school closures impacted US Clinical
Assessment.
●
North American
Courseware declined 13% with US Higher Education Courseware revenue
down 12%, with good growth in digital registrations and eBooks and
a further decline of higher priced package and print sales. At the
end of 2020, over
70% of US Higher
Education Courseware revenue was digital.
●
International
declined 19% due to school and test centre closures and the
continuing impact of COVID-19 on public and private spending on
courseware and assessments.
Cost management
●
Pearson achieved
incremental in year benefits of £60m associated with the
2017-2019 restructuring plan, and we remain on track to create the
further £50m of cost efficiencies for full year
2021.
Strong
balance sheet
●
Pearson retains
significant financial headroom with net debt of c.£0.5bn and
immediately available liquidity of c.£1.9bn through committed
facilities and cash balances.
|
Andy Bird, Chief Executive said:
"I am very proud of the
way that our employees across the world have come together - in an
incredibly challenging year - to support one another, our customers
and the broader communities in which we operate. My priority
remains keeping our employees and customers safe as global
lockdowns and tighter restrictions persist.
"Despite facing
significant uncertainty, our teams have been laser-focused on
closing out 2020, enabling us to report sales and profit for 2020
in line with expectations. Uncertainty
remains in the near term as a result of the ongoing pandemic, with
further lockdowns, exam cancellations and reduced global mobility.
However, I am excited about our future given the shift to online
learning and the huge opportunity to help more people develop the
skills they need.
"At the end of 2020, we
made several key hires to accelerate our digital growth and,
looking ahead, we start the year with momentum, pace and
confidence. Our broader goal is to become a more consumer-focused
company, targeting the incredible opportunity that exists to have a
direct relationship with millions of lifelong learners. We look
forward to sharing more details at our Preliminary Results in
March."
|
Financial summary
Underlying
growth for 2020
|
|
Sales
|
|
Global
Online Learning
|
18%
|
Global
Assessment
|
(14)%
|
North
American Courseware
|
(13)%
|
International
|
(19)%
|
Total
|
(10)%
|
Underlying
growth by quarter 2020
|
Q1
|
Q2
|
Q3
|
Q4
|
Sales
|
|
|
|
|
Global
Online Learning
|
6%
|
3%
|
32%
|
30%
|
Global
Assessment
|
(3)%
|
(45)%
|
(3)%
|
3%
|
North
American Courseware
|
(10)%
|
(18)%
|
(15)%
|
(8)%
|
International
|
(10)%
|
(31)%
|
(26)%
|
0%
|
Total
|
(5)%
|
(28)%
|
(10)%
|
4%
|
Notes
Throughout
this announcement: growth rates are stated on an underlying basis
unless otherwise stated. Underlying growth rates exclude both
currency movements and portfolio changes. Unless otherwise stated,
growth rates relate to the twelve-month period.
|
2020 trading update
In Global
Online Learning, sales grew 18% for the full year. Virtual
Schools performed strongly driven by 43% enrolment growth in new
and existing schools for the 2020/2021 academic year. We opened
three new full-time, state-wide partner schools, and combined with
two contract exits this takes the total partner schools to
43.
In OPM,
we saw good sales growth with a strong performance in undergraduate
and international, partially offset by discontinued programs. We
also saw the benefits of the operational changes made earlier this
year, with increased efficiencies in our student recruitment
process and student acquisition costs. Underlying course enrolments
(excluding discontinued programs) grew 20% and total course
enrolments declined 7%. We are delivering 470 programs across 34
partners globally.
In Global
Assessment, sales declined 14% for the full year. Sales
declined at Pearson VUE reflecting the impact of the test centre
closures in H1, partially offset by growth in IT and online
proctoring. Testing volumes for the full year were down 22% to
12.9m. Pent up demand in H2 was partially moderated by further
lockdowns in Q4 and continued social distancing, leading to
increased costs. Online Proctoring continued to see strong growth
with volumes growing significantly from 0.2m at the end of 2019 to
2.1m at the end of 2020. In School and Clinical Assessment,
performance was in line with expectations with further modest
impact of COVID-19 in H2.
In North
American Courseware, sales declined 13% for the full year.
In US Higher Education Courseware sales declined 12% with total
unit sales increasing slightly and digital registrations including
eBooks growing 9%. In Canada, courseware sales were down
significantly due to school and bookstore closures, with a strong
performance in Q4 as purchases shifted to digital.
Affordability
continues to play a major part in students' decision making
and the unbundling of premium priced print and digital products for
digital only formats continued. This reflects the rapidly changing
market dynamics of the industry with 2.2m textbooks sold into US
Higher Education colleges in 2020, compared with 3.7m in 2019.
Sales of standalone eBook units into colleges grew 33% to 3.7m
units, showing signs of secondary market recapture.
There
has also been continued momentum in Inclusive Access with sales to
not-for-profit institutions up 29% on last year representing 13% of
US Higher Education Courseware revenue.
In International,
sales were down 19% at the full year due to the interruption of
Australian immigration and test centre closures impacting PTE with
volumes down 36% compared to 2019, as well as the impact of
COVID-19 on courseware purchasing.
For
School & HE Courseware, budget constraints and school closures
have led to fewer purchases. South Africa school courseware sales
were down slightly, with purchases pushed later into Q4 compared to
Q3 2019. In the UK, qualifications revenue was impacted, as
expected, by the cancellation of exams in 2020, as well as the end
of the NCT contract. In our franchise business in Brazil and across
courseware, we have seen market contraction as a result of the
pandemic.
|
|
Simplification
On 1
April 2020, Pearson completed the sale of its remaining 25% in
Penguin Random House for £531m to Bertelsmann SE & Co
KGaA.
In relation to the disposal of US K12 Courseware in 2019, Pearson
sold its 20% variable Earn-Out right for $57m during
2020.
On 9
November 2020, Pearson announced the disposal of its interest in
Pearson Institute of Higher Education (PIHE) in South Africa to a
consortium of Stellenbosch Graduate Institute (SGI) and EXEO
Capital, which is expected to close in H1 2021.
|
Contacts
|
|
|
|
Investor Relations
|
Jo
Russell
Anjali
Kotak
Teddy
Symington
|
+44 (0)
7785 451 266
+44 (0)
7802 890 724
+44 (0)
7443 354 088
|
|
Media
|
Tom
Steiner
Gemma
Terry
|
+44 (0)
7787 415 891
+44 (0)
7841 363 216
|
|
Brunswick
|
Charles
Pretzlik, Nick Cosgrove, Simone Selzer
|
+44 (0)
207 404 5959
|
|
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.pearson.com/corporate/investors.html).
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.
|
PEARSON
plc
|
|
|
Date: 20
January 2021
|
|
|
By: /s/
NATALIE WHITE
|
|
|
|
------------------------------------
|
|
Natalie
White
|
|
Deputy
Company Secretary
|
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