Are Pearson’s (PSON) fortunes improving? Chief executive John Fallon certainly seems to think so, having increased his ‘worst case scenario’ adjusted operating profit expectations from £546m to £576m. Mr Fallon pointed to an acceleration in the cost-saving programme and better-than-expected trading at the troubled US higher education business as the reason for the renewed optimism. Relieved, the market sent the shares up 7 per cent by way of response.
But it’s not all good news. Revenues continue to wane in the US, down 4 per cent on an underlying basis, and Mr Fallon has warned that the challenges in the market will “persist in the medium term”. Meanwhile, even the top end of adjusted operating profit expectations – £606m – is still 5 per cent lower than last year.
