Education publisher Pearson swung to a first-half loss as the coronavirus pandemic closed schools and test centres, but said it is on track to recover in the second half of the year.
Pearson, which has withdrawn guidance for the year, said underlying sales had fallen 17 per cent in the first half of the year but there had been some recovery since June.
Group sales dropped 17 per cent which Pearson said “largely reflects test centre and school closures in Global Assessment and International”.
Global Assessment dropped 27 per cent due to the impact of the closures of test centres. This slump in revenue was partially offset by a five per cent growth in global online learning sales as schools pivoted to virtual learning.
Adjusted operating profit declined £167m to a loss of £23m to the six months to 30 June 2020. It said there was a profit impact of around £140m from coronavirus trading pressures after cost mitigations.
The education publisher has maintained its 6p interim dividend.
While difficult to predict the ultimate impact of the pandemic on Pearson’s full-year performance, the group said: “We are on track to deliver adjusted operating profit broadly consistent with market expectations.”
Why it’s interesting
The pandemic has undoubtedly hit Pearson but it may well accelerate the shift to digital, as it boasts of strong enrolments in new and existing schools in Virtual Schools.
Pearson said there has been a surge in applications, up 61 per cent in the first half compared to 2019 “as many explore full time digital learning for the first time”.
The publisher added it would invest in the “digitisation” of recruitment and enrolment processes for its university partners.
What Pearson said
Chief executive John Fallon said: “Covid-19 has had a major impact on trading, but we are encouraged by the improving trends and pick up in sales in June. Uncertainty remains, but the purpose, grit, speed and ingenuity shown by Pearson colleagues is helping educators and learners around the world to adapt to the pandemic and will ensure that the company itself emerges stronger from it.”
“The long-term shift to online learning is accelerating. The lead indicators of digital take up of our products are encouraging, and signals that our focus on experience, outcomes and affordability will prove a winning combination.”