Education publisher Pearson today issued a profit warning for 2020 and paused a £350m share buyback as a result of the coronavirus pandemic.
The firm, already suffering from a difficult transition from print to digital, warned it expects a “negative impact” on 2020 profit from closing its testing centres. The postponement of US state exam assessments will also hurt its bottom line, the company warned.
“We are also pausing our share buyback until further notice, as a precautionary move,” Pearson announced.
Outgoing chief executive John Fallon insisted Pearson is “well-placed” to take advantage of the growing popularity of online learning as it shifts from print to digital.
It is distributing digital learning tools to students, teachers and parents around the world hit by a wave of school closures to combat the spread of coronavirus.
However, its US textbook business sank 12 per cent last year, a slide that a four per cent rise elsewhere failed to offset.
And Pearson has already warned of lower 2020 profit, saying operating profit could land between £410m and £490m, excluding the 25 per cent stake in Penguin Random House that it has sold.
It also warned of a low single digit pace of growth outside its struggling US textbook arm.
The UK has cancelled GCSEs and A-Levels this summer as UK coronavirus infections continue to climb. Pearson said it would work with the exam boards to support teachers with “high quality resources” so students could continue learning.
It has also made its full ebook library available for free for the rest of the term and offered free subscriptions to secondary schools for GCSE, A-Level and BTEC qualifications.
“This urgent learning need is leading to increased usage of digital learning materials and online teacher training, with demand continuing to grow,” Pearson added.
“Hundreds of millions of students around the world are facing the most significant disruption to education in modern history,” Fallon said.
“It’s more important than ever that learning continues, even if it can’t happen in person. Learners, teachers and families are at the heart of everything Pearson does. If we band together, we can all do our part to keep learning going and ease the burden of this unprecedented time.”