Pearson PLC

Latest Results (07.08.2024):

Revenue Performance

Pearson PLC reported sales of £1,754 million for the first half of 2024, compared to £1,879 million in the same period of 2023. This represents a slight decline in revenue, but the company noted underlying Group sales growth of 2%, excluding OPM and Strategic Review businesses. Each segment performed broadly in line with expectations.

Operating Profit

The adjusted operating profit for Pearson PLC remained steady at £250 million for H1 2024, the same as H1 2023. The underlying adjusted operating profit growth was 4%, driven by trading performance, net cost phasing, and savings, partially offset by inflation and restructuring charges in Higher Education.

Cash Flow and Dividends

Pearson PLC saw a significant improvement in free cash flow, which increased by £77 million to £27 million in H1 2024, compared to a negative free cash flow of £50 million in H1 2023. The company also proposed an interim dividend of 7.4p, up 6% from 7.0p in the previous year, reflecting strong cash performance and a robust balance sheet.

Share Buyback

The £500 million share buyback program announced by Pearson PLC is substantially complete, with £163 million of shares repurchased by 30th June 2024. This buyback has contributed to a reduction in the number of issued shares, which helped offset higher net interest costs, keeping adjusted earnings per share flat at 25.6p.

Future Outlook

Pearson PLC reiterated its guidance for 2024 and 2025, expecting to deliver mid-single-digit underlying sales CAGR and sustained margin improvement beyond 2025. The company aims to achieve an average increase of 40 basis points per annum by driving performance in its core business, executing synergies, and expanding into adjacent markets.