News Column

Pearson Retains Full-Year Outlook As Loss Widens

July 24, 2014

Hana Stewart-Smith

LONDON (Alliance News) - Pearson PLC said Friday that it has retained its outlook for the full-year as first-half revenues rose marginally and its pretax loss widened in the first-half as the company was hit by increased restructuring charges and adverse currency movements.

In an interim management statement for the first-half The Financial Times owner proposed an increased interim dividend of 17 pence, up 6% on the 16 pence per share paid last year, which the company said reflects its confidence in its prospects.

The company Friday reiterated its expectations for the full-year; at the time of its first quarter results in April Pearson maintained its expectations for adjusted earnings per share of between 62 pence and 67 pence in 2014, taking into account continued cyclical and policy-related pressures in the US and UK, its restructuring plans and product investment.

The company posted a widened pretax loss of GBP36 million, more than doubling the GBP16 million loss recorded in the comparable half last year. Revenue came in 7% lower at GBP2.05 billion from GBP2.19 billion in 2013; the company said it was hit by the costs of merging its Penguin books unit with Random House Inc, as well as the appreciation of sterling. Pearson makes around 60% of its sales in the US.

Pearson said that its 2014 profits reflect changes in its portfolio, citing the Penguin Random House associate accounting, the Mergermarket sale in November and the Grupo Multi acquisition, as well as the significant strength of sterling against its key currencies.

The FTSE 100-listed company said that it still expects approximately GBP50 million net restructuring to continue to reshape its publishing businesses and GBP50 million organic investment in structural growth opportunities in digital, services and emerging markets.

Pearson said that revenues were offset as expected, by the impact of school curriculum change in the US and the UK; and that, this year, seasonal changes in phasing have helped first-half sales in North America and hurt those in Core markets, especially the UK. At constant exchange rates sales were up 2% which Pearson said reflects good growth in its digital, services and emerging markets.

"Overall, we are sustaining a good competitive performance through a period of change and are powering ahead in digital, services and emerging markets which enable us to reiterate our guidance for 2014. It also positions Pearson as a global learning services company, making better learning outcomes more accessible for far more people around the world. This will drive a leaner, more cash generative, faster growing business from 2015," said CEO John Fallon.

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Source: Alliance News

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