UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934
For the month of
January 2022
PEARSON plc
(Exact
name of registrant as specified in its charter)
N/A
(Translation
of registrant's name into English)
80 Strand
London, England WC2R 0RL
44-20-7010-2000
(Address
of principal executive office)
Indicate
by check mark whether the Registrant files or will file annual
reports
under
cover of Form 20-F or Form 40-F:
Form
20-F
X
Form 40-F
Indicate
by check mark whether the Registrant by furnishing the
information
contained
in this Form is also thereby furnishing the information to
the
Commission
pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934
Yes
No X
Pearson
January Trading Update (Unaudited)
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19 January 2022
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Strong financial performance in 2021, full year guidance
raised
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Andy Bird, Chief Executive said:
“We
made great progress in Q4 and are delivering a strong full year
performance, with sales growth and profit exceeding our original
guidance. Led by a strong management team, we are repositioning the
business, driving digital innovation and an increased focus on the
consumer through the launch of Pearson+. We are well placed to
build on this momentum in the year ahead and look to the future
with confidence.”
Full year Group sales up 8% and adjusted operating profit expected
of c.£385m up c.33% compared to last year and ahead of
expectations*, at an average USD:GBP exchange rate of
1.38.
● Strong
performance in Assessment & Qualifications
- Sales in Assessment
& Qualifications, our largest business, were up 18% driven by
the strength of Professional Certification (VUE), Clinical
Assessment and US Student Assessment, following a recovery from
COVID-19.
- VUE test volumes
grew 30% to 16.8m due to this recovery, new client launches and
growth in existing programs. Volumes in OnVUE**, Pearson’s
online proctoring service, grew 46% reflecting continuing demand
for remote testing.
- In Q4, sales were
up 2% as growth in US Student Assessment was partially offset by
expected declines in VUE, due to strong comparators from a COVID-19
catch up in Q4 2020.
● Further
momentum in Virtual Learning
- Sales in Virtual
Learning grew 11% for the full year with sales growth of 17% in
Virtual Schools due to strong enrolment growth in the prior
academic year (2020-21). Online Program Management (OPM) grew with
good underlying enrolment growth of 7%.
- Maryville
University extended its OPM partnership for online degrees in the
high-demand field of Nursing to 2033 and Northeastern
University added new online master's degree and certificate
programs in Nursing and Healthcare. Virtual Schools announced its
first Connections Academy in the state of Virginia, which begins
enrolment in 2022.
- Q4 sales in Virtual
Schools, which relate to the current academic year (2021-22) were
down 4% reflecting modest enrolment growth offset by pricing mix.
OPM sales grew 8% in the quarter with the impact of discontinued
programs in OPM having now come to an end.
● Stronger
end to the year in Higher Education
- Sales in Higher
Education were down 5% for the full year. Growth in Canadian and UK
Courseware was more than offset by a 6% decline in US Higher
Education Courseware.
- Continued momentum
in Inclusive Access where sales to not-for-profit institutions grew
18% representing 16% of total US Higher Education Courseware
revenue versus 13% last year.
- In Q4, lower
international sales were partially offset by growth in the US,
meaning H2 sales (which are representative of the current academic
year) for US Higher Education Courseware decreased 9%. This
performance in H2 was driven by a 6% decline in
enrolments and courses per enrolment combined, as well as
price pressure due to the mix shift from print and bundles
to etext and platform, and lower monetisation.
● Positive
performance in Workforce Skills
- Sales in Workforce
Skills grew 6% with strong growth in GED and TalentLens as well as
growth in BTEC and Apprenticeships.
- In Q4, revenue grew
13% due to a phasing benefit in BTECs.
● Good
progress in English Language Learning
- Sales in English
Language Learning grew 17% for the full year due to a COVID-19
recovery in both International courseware and Pearson Test of
English (PTE) where volumes grew 25% compared to 2020.
- Q4 sales grew 21%
driven by a strong performance in PTE as local restrictions in
Australia and India were lifted. English courseware also rebounded
strongly with growth across most international markets including a
strong recovery in Latin America.
● Sales
in businesses under strategic
review were up 1% for the full year.
● Strategic
progress – 2021 highlights
- Launched direct to
consumer strategy led by new digital learning service, Pearson+,
which continues to make good progress with 2.75m registered users,
reflecting a strong uptake from MyLab and Mastering users, 133k
paid subscriptions, and an app store rating of 4.7.
- Pearson’s
flagship Higher Education product, Revel, completed the move to
incorporate the Pearson Learning Platform’s capabilities,
providing enhanced features, and a new visual design for
mobile.
- Acquired Faethm,
the workforce AI and predictive analytics company, enhancing
Pearson’s Workforce Skills capabilities.
- The disposal of
Pearson’s Brazilian K12 Sistemas business completed on 1st
October 2021. Marketing is progressing well in businesses under
strategic review.
● Board
appointments
- Appointed Omid
Kordestani as Non-Executive Chair Designate and Tim Score as Deputy
Chair Designate, providing exceptional leadership with highly
relevant skills to drive Pearson’s digital, consumer
strategy.
- Pearson has today
also announced the appointment of experienced business leader
Esther Lee as Independent Non-Executive Director. Esther brings
significant experience to the Board through her prior executive
leadership roles developing customer strategies to drive digital
transformation and growth. She has served in a variety of senior
roles at global brands including MetLife Inc., AT&T, Euro RSCG
Worldwide, and The Coca-Cola Company. Esther is a Board member at
The Clorox Company (NYSE: CLX.) She will join the Board on 1st
February 2022.
● Strong
cashflow
- Strong balance
sheet, net debt of less than £400m and a strong cash
performance.
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Financial summary
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Underlying sales growth for 2021
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Q4
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Full Year
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Sales
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Assessment
& Qualifications
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2%
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18%
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Virtual
Learning
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0%
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11%
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Higher
Education
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(2%)
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(5%)
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Workforce
Skills
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13%
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6%
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English
Language Learning
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21%
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17%
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Sub total
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2%
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8%
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Strategic
review
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(18%)
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1%
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Total
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1%
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8%
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For an
accompanying data table providing 2021 metrics relating to revenue
across select key businesses, please follow this link.
Full
year results will be announced on 25th February 2022 when
we will provide a strategic update and 2022 guidance.
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Notes
Throughout
this announcement: growth rates are stated on an underlying basis
unless otherwise stated. Underlying growth rates exclude both
currency movements and portfolio changes. Unless otherwise stated,
growth rates relate to the twelve-month period.
*
Consensus adjusted operating profit as at 12th November 2021 was
£375m at average USD:GBP of 1.38.
**
OnVUE test volumes include GED test but revenues for GED are
reflected in the Workforce Skills division under Pearson’s
new divisional structure.
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Contacts
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Investor Relations
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Jo
Russell
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+44 (0)
7785 451 266
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Media
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Tom
Steiner
Gemma
Terry
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+44 (0)
7787 415 891
+44 (0)
7841 363 216
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Teneo
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Charlie
Armitstead
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+44 (0)
7703 330 269
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Forward looking statements: Except for the historical information contained
herein, the matters discussed in this statement include
forward-looking statements. In particular, all statements that
express forecasts, expectations and projections with respect to
future matters, including trends in results of operations, margins,
growth rates, overall market trends, the impact of interest or
exchange rates, the availability of financing, anticipated cost
savings and synergies and the execution of Pearson’s
strategy, are forward-looking statements. By their nature,
forward-looking statements involve risks and uncertainties because
they relate to events and depend on circumstances that will occur
in future. They are based on numerous assumptions regarding
Pearson’s present and future business strategies and the
environment in which it will operate in the future. There are a
number of factors which could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements, including a number of factors outside
Pearson’s control. These include international, national and
local conditions, as well as competition. They also include other
risks detailed from time to time in Pearson’s publicly-filed
documents and you are advised to read, in particular, the risk
factors set out in Pearson’s latest annual report and
accounts, which can be found on its website (www.pearson.com/corporate/investors.html).
Any forward-looking statements speak only as of the date they are
made, and Pearson gives no undertaking to update forward-looking
statements to reflect any changes in its expectations with regard
thereto or any changes to events, conditions or circumstances on
which any such statement is based. Readers are cautioned not to
place undue reliance on such forward-looking
statements.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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PEARSON
plc
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Date: 19
January 2022
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By: /s/
NATALIE WHITE
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------------------------------------
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Natalie
White
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Deputy
Company Secretary
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