Strong demand for English learning keeps Pearson on track

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  • Underlying nine-month sales up 7%
  • English language learning has seen ‘exceptional’ growth
  • Shares up 6%

LONDON, Oct 24 (Reuters) – Pearson Education Group (PSON.L) said an “outstanding” performance in English language learning helped drive underlying sales growth of 7% over the past nine months, ahead of market expectations and staying the course over the whole year.

The UK company reported 28% growth in English lessons, with demand boosted by the reopening of borders after the pandemic.

Underlying sales in assessment and qualifications were up 12%, he said on Monday, while higher education fell 4%, which he said was in line with his expectations.

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Chief executive Andy Bird said the company was “very encouraged” by recent U.S. listings data which showed a decline of 1.1%, which analysts said was about half the rate of the previous year.

He said the data showed more students physically returning to college, while a 12% increase in the number of 16-18 year olds taking college credit was a positive early indicator of future enrollment.

The group’s shares, which are up 41% in the past 12 months against a 4.6% decline in the FTSE 100, traded up 6% at 941 pence on Monday.

Much of education spending is non-discretionary and non-cyclical, Bird said, which is a benefit in deteriorating economic conditions.

“While we are aware of the difficult macroeconomic environment, we are confident that we can navigate these headwinds,” he told reporters.

Analysts at Citi, who have a “buy” rating on the stock, said the company’s organic growth was “significantly ahead of expectations,” especially in English learning, assessment and qualifications, and higher education.

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Reporting by Paul Sandle; edited by James Davey, Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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