26 July 2013
PEARSON 2013 INTERIM RESULTS (unaudited)
– Sales up 5% at constant exchange rates (2% underlying growth) to £2.8bn.
– Good growth in Education (up 3%) led by North America (up 5%) and developing markets.
– FT Group sales broadly level with resilient content and subscription revenue offset by weak advertising.
– Penguin Random House merger completed on 1 July 2013; strong growth at Penguin (up 14%) in the first half.
– Adjusted operating profit £50m lower at £137m, including £37m of gross restructuring charges and, in addition, investments to support new product launches in the second half.
– Adjusted earnings per share down 4.9p to 9.9p including restructuring charges.
– Interim dividend up 7% to 16p.
Rapid growth in digital and services businesses and developing markets
– Underlying sales growth of 9% in developing markets.
– Education digital platform registrations up 19%; FT digital subscriptions up 14%.
– Headline deferred revenues from continuing operations up 12% to £692m, with a strong performance from subscription-based business models.
Acceleration of global education strategy
– Restructuring to shift education businesses towards fast-growing economies and digital and services businesses on track.
– Reorganisation of Pearson into one globally-connected education company. Pearson will organise around three global lines of business – School, Higher Education and Professional – and three geographic market categories – North America, Growth and Core from 2014.
– Global education strategy designed to produce faster growth, larger addressable market opportunity and greater impact on learning outcomes.
– Process to explore the possible sale of Mergermarket initiated.
Full year outlook reiterated
– Gross restructuring costs of approximately £150m in 2013 (£100m including cost savings achieved during the year).
– Adjusted EPS expected to be broadly level with 2012 adjusted EPS of 82.6p under revised IAS 19, before expensing restructuring costs.
– From 1 July 2013 Penguin Random House will be treated as an associate.
John Fallon, chief executive, said: “In trading terms, 2013 has begun much as we expected. In general, good growth in our digital, services and developing-market businesses continues to offset tough conditions for traditional publishing. Our strategy is to transform Pearson into a single operating company that is sharply focussed on the biggest needs in global education and on measurable learning outcomes. With our restructuring programme on track and the reorganisation of the company under way, we are making significant progress towards that goal.”
* Total business