Pearson shares climb as publisher pushes ahead with turnaround
The company has been selling assets and finding cost savings.
Investors are rewarding Pearson for its turnaround efforts, boosting its shares as the company announced a rise in profit.
The publisher’s revenues for the six months ended June 30 came in at £1.87 billion, down from £2.04 billion year on year.
But Pearson made a statutory operating profit of £233 million, up from £16 million during the same period last year, boosted by the sale of a teaching unit, Wall Street English.
The company also delivered cost savings of £40 million in the first half, part of plans to deliver £300 million of annualised savings by the end of 2019.
Shares rose 3.7% to 958.4p on Friday morning, making the company one of the top risers on the FTSE 100.
John Fallon, chief executive of Pearson, said: “Although there is still much to do, we have had a good first half and continued to make progress against our strategic priorities.
“We are driving ahead in digital learning, helping more people develop the skills they need to prosper in a fast-changing world.”
Pearson needs to prove itself capable of thriving in this brave new world of interactive education George Salmon, Hargreaves Lansdown
Pearson, which has been selling assets such as the Financial Times and Economist, has been moving towards a focus on the education sector.
However, George Salmon, equity analyst at Hargreaves Lansdown, said the education industry was changing rapidly, with a move towards online services.
“To justify the sale of assets like the Financial Times and Economist newspapers, Pearson needs to prove itself capable of thriving in this brave new world of interactive education,” he said.
“These results will give some assurance on that front, but the bumper sales season doesn’t come until later in the year. That makes full-year results the more important test.”