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
October 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 2021 Nine Month Trading Update (Unaudited)
15th October
2021
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Pearson, the world's leading learning company, is
today providing an update on trading for the nine months ending
September 30th 2021.
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Andy Bird, Chief Executive said:
"We are encouraged with our strategic, financial and operational
progress, despite the continuing effects of COVID-19 in some
markets and its impact on enrolments in the back to school period.
At this important stage of the year, we are on track to meet market
expectations for the full year.
"Pearson+ has made a promising start following its launch in late
July with over 2m registered users and a strong response from
students, faculty and authors. This is a significant step for
Pearson, strengthening our direct-to-consumer offer that will
underpin our drive for sustainable growth over the coming years.
The growing pace and momentum in Pearson reinforces our confidence
going forward."
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Highlights
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Good
strategic progress, full year outlook
unchanged. Strong performance in
Assessment & Qualifications helps offset declining enrolments
in Higher Education
Group underlying revenue up 10% for the nine months
● Virtual
Learning revenue grew 14%
reflecting strong enrolment growth in Virtual Schools in the
2020/21 school year and flat revenue in Online Program Management
with underlying growth offset by discontinued
programs
● Higher
Education revenue was down
7% as growth in international courseware was offset by a decline in
US Higher Education Courseware
● English Language
Learning revenue grew 15%
with strong growth in Pearson Test of English (PTE) and courseware
following test centre and school closures in
2020
● Workforce
Skills revenue grew 5% due
mainly to growth in GED and Talent Lens following COVID-19 impacts
in 2020
● Assessment &
Qualifications revenue
grew 24% with a strong performance across Pearson VUE, School
Assessment and Clinical Assessment
● Revenue in businesses held
under Strategic
Review grew 7% driven by a
COVID-19 recovery in courseware and a phasing benefit in school
purchases in South Africa in Q3 2021
Continued good strategic and operational progress with Pearson+
advancing well
● New organisational structure fully operational;
Pearson reporting against its new divisions
● New US learning app, Pearson+, launched in late
July and is progressing well with over 2m registered users,
and an App store rating of 4.7
● Workforce Skills division strengthened with the
completion of a strategically significant acquisition in Faethm,
the workforce AI and predictive analytics
company
● The disposal of Brazilian K12 Sistemas business
completed on the 1st October
2021
● Moving to the next stage of our strategic review,
we have commenced marketing the majority of Pearson's international
courseware local publishing businesses
2021 outlook reaffirmed
● Pearson remains on track to deliver adjusted
operating profit for FY21 in line with market
expectations*
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Financial summary
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Underlying growth for the nine months ended 30th September
2021
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Sales
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Virtual Learning
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14%
(7%)
15%
5%
24%
7%
10%
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Higher Education
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English Language Learning
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Workforce Skills
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Assessment & Qualifications
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Businesses under strategic review
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Total
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Notes
* On 8 March 2021 Pearson stated that it expected year on year
revenue growth with adjusted operating profit in line with then
prevailing market expectations according to VUMA published
consensus on 3 March 2021 of £377m at USD:GBP
1.36.
Throughout this announcement growth rates are stated on an
underlying basis unless otherwise stated. Underlying growth rates
exclude currency movements and portfolio changes.
Nine-month trading
In Virtual
Learning revenue grew 14%
with strong growth in Virtual Schools reflecting enrolment growth
in the 2020/21 academic year and school district partnerships with
flat revenue in Online Program Management.
In Virtual Schools we have seen slight enrolment growth for the
2021/22 academic year due to the continuing uncertainty around
COVID-19 in the US but we expect revenue to be broadly flat in H2
due to pricing mix. This mix pressure has
been caused by an uneven enrolment
distribution across the states with
a higher rise in typically lower funded states.
In Online Program Management underlying growth was offset by the
impact of discontinued programs in the US and Australia which we
expect to end this year. Underlying course enrolments (excluding
discontinued programs) grew 8%.
Higher Education revenue
was down 7% as growth in international courseware, including Canada
and the UK, was more than offset by a 9% decline in US Higher
Education Courseware. While no market data for
the full back to school period is available as yet, Pearson's
internal analysis indicates a decline in enrolments,
particularly in community colleges, following a surge in COVID-19
infections in the key back to school period, and a strengthening of
the US labour market.
We also saw an impact to our print:digital mix with print and
packages continuing to decline in favour of platform and
etexts, but not as acutely as seen in previous
years.
There has been continued momentum in Inclusive Access with sales to
not-for-profit institutions up 21% on last year.
Pearson's new learning app, Pearson+, launched in late July as part
of our strategy to build strong, long-term relationships with
millions of students. The app provides a better user experience for
students with enhanced functionality and will accelerate our
recapture of the secondary market. We have seen encouraging
progress to date, with over 2m registered users, reflecting a
strong uptake from MyLab and Mastering users and more than 100k
paid subscriptions.
In English Language
Learning (ELL) revenue
grew 15% due mainly to a COVID-19 recovery from 2020. PTE revenue
grew strongly as the majority of test centres reopened but remains
under pressure due to reduced global mobility and border closures
in our key market, Australia. We see strong future growth
opportunities for PTE in the UK-bound market with the winning
of the UK Home Office SELT contract in 2019. English
courseware rebounded strongly driven by international growth in
most markets, although growth in China was negatively impacted in
the third quarter by recent government reforms.
In Workforce
Skills revenue grew 5%
mainly due to growth in GED and Talent Lens which had been impacted
by COVID-19 in 2020. BTEC and apprenticeship revenue was
flat.
Pearson announced the small but strategically significant
acquisition of Faethm, the workforce AI and predictive analytics
company in Q3. Faethm's market-leading data, insights and AI
capabilities provide Pearson with the tools to help businesses
understand the skills they have today and those that they will need
for the future. Pearson intends to combine this with its deep
learning expertise to provide content and experiences that help
companies re-skill, re-train and re-mobilise their
people.
In Assessment and
Qualifications revenue
grew strongly, despite a challenging comparison in the third
quarter, up 24%.
In Pearson VUE, sales grew strongly due to a recovery post
COVID-19, as well as ongoing high growth of Pearson's online
proctoring service, OnVue, where test volumes rose to 2.3m compared
with 1.3m in the same period in 2020. Despite a challenging
comparator, Pearson VUE testing volumes grew 3.5% in the third
quarter, driven by growth in the IT and Regulatory segment along
with continued demand for online proctoring.
In Pearson VUE, following a planned review of its driving theory
test contract, the DVSA has disaggregated the contract into a
number of geographical tenders. While Pearson has been awarded a
five year contract to run one of these contracts, as well as
successfully extending our contract for the delivery platform, this
will have a modest negative impact on 2022 revenue in
VUE.
US Student Assessment revenue grew well following exam
cancellations in 2020 with a phasing benefit in the third quarter
given a shift in some state testing to the Fall.
In US Clinical Assessment revenue rebounded strongly with the
reopening of schools and the delivery of a backlog of education
assessments.
UK School Assessment revenue was slightly down due to a higher
rebate of exam fees to schools vs 2020, partially offset by growth
in courseware.
Strong financial position
Pearson's financial position remains robust, with low net debt and
strong liquidity. At 30th September
net debt stood at £0.7bn compared to £0.9bn in 2020 with
strong operating cashflow offset by dividends.
Contacts
Investor Relations
|
Jo Russell
Anjali Kotak
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+44 (0) 7785 451 266
+44 (0) 7940 490 442
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Media
|
Tom Steiner
Gemma Terry
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+44 (0) 7787 415 891
+44 (0) 7841 363 216
|
Teneo
|
Charles Armitstead
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+44 (0) 7703 330 269
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Video event
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Pearson's nine-month trading update virtual presentation for
investors and analysts from 0830 (BST). Register to receive login
details: https://pearson.connectid.cloud/register/
|
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.pearsonplc.com). 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.
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PEARSON
plc
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Date: 15
October 2021
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By: /s/
NATALIE WHITE
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------------------------------------
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Natalie
White
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Deputy
Company Secretary
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