Publishing group Pearson was among the companies leading a fall in the FTSE 100 this morning, after it issued a trading statement.
While the firm said its profits would reach the top end of guidance at as much as £606m, it revealed it was still grappling with the US textbook sector.
Sales in the unit dropped three per cent in the nine months to the end of 2017. This contributed to a four per cent decline in North American and the overall two per cent drop in underlying revenues.
The group only expects the US higher education market to get tougher, due to “lower college enrolments, increased use of Open Educational Resources and attrition from growth in the secondary market driven by print rental”.
Shares fell almost six per cent in early trading.
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But there was good news as well, with progress in the group’s digital business. By lowering the prices of e-book rentals, Pearson increased revenue in this sector by 22 per cent.
It also said there had been “success” in a pilot scheme to rent physical books and would add 90 more titles to the range.
Meanwhile the company has been slimming down its holdings by selling off Global Education, Wall Street English and its stake in Penguin Random House. The stake in Mexican university partnership Utel will also be sold in the first half of 2018.
Pearson’s chief executive, John Fallon said: “We made good progress in 2017 on the simplification of our portfolio, the strengthening of our balance sheet and delivered results at the top end of guidance.
“Our restructuring programme is on track and our 2017 performance has set us up well to make further progress against our strategic priorities and grow profit in 2018.”
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