18th January
2023
|
Continuing strategic and operational momentum throughout 2022,
trading ahead of expectations
|
●
|
Group underlying sales for the full year up 5% and adjusted
operating profit of c.£455m at £:$ 1.24, up c.11% on an
underlying basis compared to 2021, ahead of
expectations.
|
●
|
Strong trading performance reflects good result in English Language
Learning, Virtual Learning, Workforce Skills and Assessment &
Qualifications, offset by an expected, albeit reduced, decline in
Higher Education.
|
●
|
A year of strategic and operational progress; reshaping our
portfolio for growth, adding capabilities and increasing
interconnectivity between divisions to unlock synergies and build
further lifelong learning potential.
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●
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On track to deliver approximately £120m of cost efficiencies
in 2023, weighted to Higher
Education, some £20m of which will be used to offset
inflationary pressures.
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●
|
Assessment & Qualifications sales for the full year were up 8%
with strong performances in US Student Assessment and UK &
International Qualifications as exams resumed, and in Clinical
Assessment due to good government funding and continued focus on
health and wellbeing. VUE test volumes* grew 16% to 19.4m with
particularly strong growth in the IT segment and healthcare. Q4
sales were down 4% with expected declines in US Student Assessment
and UK & International Qualifications due to 2021 phasing,
offset by strong growth in VUE, as the impact of changes to the
DVSA contract unwound, and growth in Clinical
Assessment.
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●
|
Virtual Learning sales for the full year were up 4%. Virtual
schools had a good performance with sales up 4%, driven by firm
retention rates relating to the 2021/22 academic year and
favourable revenue mix partially offset by a small decline in
enrolments for the 2022/23 academic year and lower district
partnership renewals. OPM sales were up by 4% in the full year. Q4
sales were flat with OPM growth offset by a slight decline in
virtual school sales reflecting lower 22/23 school year enrolments
as the Covid-19 cohort fully unwinds.
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●
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Higher Education sales were down 4% for the full year driven by a
decline in enrolments and a loss of adoptions to non-mainstream
publishers including open educational resources partially offset by
improved pricing. As highlighted at the nine-month trading update,
these factors alongside prepaid access card elimination mean that
unit sales have declined more than revenues. There was continued
momentum in Inclusive Access with 9% sales growth to not-for-profit
institutions and the total number of institutions increasing to
1,040. Sales for the division were down 3% in Q4. Pearson+
performed well in the Fall semester with 2.83m registered users and
406k paid subscriptions, representing a threefold increase compared
to prior year Fall semester.
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●
|
English Language Learning sales were up 24% for the full year.
Performance was underpinned by Pearson Test of English (PTE)
volumes, which were up 90%, as global mobility continued to improve
with border re-openings and we saw market share gain in India.
Within Institutional, there was strong growth in Latin America and
the Middle East offset by the ongoing impact of government reforms
in China. Q4 sales were up 14% with continued strong growth in PTE
despite a tougher comparator.
|
●
|
Workforce Skills sales were up 7% for the full year, with growth
driven by BTEC and Apprenticeships, GED and TalentLens. The
Performance business grew by 5%. The enterprise focused
Transformation business, which is the foundation of our integrated
suite of workforce skills solutions, grew by 12%. Pearson has 1,503
enterprise clients in its Workforce Skills portfolio, up 133% on
last year, with the acquisition of Credly underpinning this growth.
Q4 sales were down 2%, reflecting prior year Covid-19 related BTEC
revenue phasing benefits. Our Transformation business continued to
grow strongly.
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●
|
Businesses under strategic review sales declined 16% for the full
year. Following the announcement of the sale of our international
courseware local publishing businesses in Europe, French speaking
Canada, Hong Kong and South Africa, these financials are no longer
included in our underlying performance measures.
|
●
|
Integration of Credly and Faethm progressing well, underpinning our
new enterprise and professional consumer strategy. Acquisition of
Mondly enhances our credentials in the language learning direct to
consumer space, contributes to the transformation of English
Language Learning and increases interconnectivity across the Group.
Subject to closing, the PDRI acquisition will expand Pearson's
services to U.S. federal agencies and grows presence with large
employers. Disposal of our international courseware local
publishing businesses is now complete.
|
●
|
Implemented change in US Higher Education sales leadership,
restructured sales team and developed new go to market approach for
2023. Sales and marketing focus on helping to win and retain more
adoptions. Investment focused on modernising our platform products
to increase stability and deliver upgraded, best-in-class features
that will improve the instructor and student
experience.
|
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|
Pearson+ roll out progressing well with launch of 18 study
channels, widening the total addressable market for the Pearson
lifelong learning ecosystem. Creating increasing interconnectivity
between divisions with successful integration of Mondly on
Pearson+.
|
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|
Further efficiencies announced at Interim results in August,
accelerating our improved margin expectation to 2023 from 2025. On
track to deliver approximately £120m of cost efficiencies in
2023, weighted to Higher Education, some £20m of which will be
used to offset ongoing inflationary pressures. One-time costs to
deliver these savings, which are excluded from adjusted operating
profit to better highlight underlying performance, now expected to
be c.£150m reflecting increased level of savings and movements
in FX. Approximately £85m will be incurred in cash, mostly in
2023, with the remaining £65m relating to write offs of
predominantly property lease assets.
|
|
Q4
|
Full Year
|
||
Sales
|
|
|
||
Assessment
& Qualifications
|
(4)%
|
8%
|
||
Virtual
Learning
|
0%
|
4%
|
||
Higher
Education
|
(3)%
|
(4)%
|
||
English
Language Learning
|
14%
|
24%
|
||
Workforce
Skills
|
(2)%
|
7%
|
||
Sub total
|
(1)%
|
5%
|
||
Strategic
review
|
(35)%
|
(16)%
|
||
Total
|
(1)%
|
5%
|
Investor Relations
|
Jo Russell
James Caddy
|
+44 (0) 7785 451 266
+44 (0) 7825 948 218
|
|
Gemma Terry
|
+44 (0) 7841 363 216
|
Teneo
|
Charles Armitstead
|
+44 (0) 7703 330 269
|
|
PEARSON
plc
|
|
|
Date: 18
January 2023
|
|
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By: /s/
NATALIE WHITE
|
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------------------------------------
|
|
Natalie
White
|
|
Deputy
Company Secretary
|