Pearson (PSON) had already revealed that its “cost efficiency programme” ran ahead of schedule in 2018, but further annualised savings of at least £330m are now anticipated by the end of 2019, with one-off restructuring costs expected to rise in kind to around £330m.
Revenues fell by 1 per cent on an underlying basis, due to declines of 5 per cent in US Higher Education Courseware (US HECW) and US K12 courseware, although the latter has been sold to Nexus Capital Management for a headline consideration of $250m (£192m).
Statutory operating profits rose more than a fifth to £553m – although this was due largely to proceeds from disposals. Adjusted operating profits climbed 8 per cent on an underlying basis to £546m and management is guiding towards £590-640m for 2019 – though this estimate does not reflect new accounting rules pertaining to leases. Pearson’s UK pension plan has also purchased a further insurance buy-in policy with Legal & General (LGEN) amounting to around £0.5bn, with around half the plan’s liabilities now insured.
According to Bloomberg consensus estimates, analysts expect adjusted EPS of 58.1p for 2019 (from 70p in 2018).
PEARSON (PSON) | ||||
ORD PRICE: | 888p | MARKET VALUE: | £ 6.94bn | |
TOUCH: | 888-889p | 12-MONTH HIGH: | 1,030p | LOW: 687p |
DIVIDEND YIELD: | 2.1% | PE RATIO: | 12 | |
NET ASSET VALUE: | 578p* | NET DEBT: | 3.2% |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
2014 | 4.54 | 0.26 | 24.7 | 51.0 |
2015 | 4.47 | -0.43 | -43.3 | 52.0 |
2016 | 4.55 | -2.56 | -287 | 52.0 |
2017 | 4.51 | 0.42 | 49.9 | 17.0 |
2018 | 4.13 | 0.50 | 75.6 | 18.5 |
% change | -9 | +18 | +52 | +9 |
Ex-div: | 04 Apr | |||
Payment: | 10 May | |||
*Includes intangible assets of £3bn or 385p a share |