A day after it sold the FT to Japanese rival Nikkei for £884m, publishing giant Pearson has posted a loss of £115m in the six months to the end of June.
Pearson, which after yesterday's sell-off of its flagship newspaper title will focus largely on educational publishing, said losses before tax hit £115m in its first half, up from £36m during the same period in 2014.
The group blamed a £70m balance sheet writedown related to the disposal of PowerSchool, which it sold earlier this month – although it reckons it will eventually record a net gain of $50m (£32.3m).
Meanwhile, sales rose five per cent to £2.16bn, while adjusted earnings per share dipped one per cent to 4.4p.
Still, investors clearly approved of yesterday's deal: shares were up 2.7 per cent in early trading, at 1,265p.
Why it matters
Pearson is the talk of the City after it sold off the FT – although it retained its 50 per cent stake in The Economist through the FT Group.
That it managed to net £884m for the paper – which contributes annual sales of £334m and makes profits of £4.2m – is pretty impressive. As rumours swirled earlier this week, one analyst said he'd eat his hat if Pearson managed to achieve the £1bn price tag mooted by many. But all millinery will stay in tact…
Yesterday the company said that while it had been a proud proprietor of the FT for nearly 60 years, it had "reached an inflection point in media, driven by the explosive growth of mobile and social".
But having ditched the pink paper, it still faces those challenges in the businesses it's left with, predominantly educational publishers. As Liberum analysts put it this morning, "a sale leaves us unmoved about its far more important and deeply challenged education business".
What Pearson said
John Fallon, the company's chief executive, said:
Overall, we're competing well, enabling us to reaffirm our full year guidance and increase the interim dividend. The new education products and services we're developing which will enable far more people of all ages to discover the joy of learning and progress in their careers. We believe the returns on the significant investments we are making to achieve this goal will be substantial for students, society and our shareholders.
Yesterday's sale of the FT might be encouraging – but the company has further challenges ahead.