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
2025
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 2024 Trading Update (Unaudited)
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16th January
2025
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Delivered on financial1 and
strategic priorities for 2024. Entering 2025 with continued
confidence. New strategic partnership with Microsoft progressing
our Enterprise focus and technology
transformation.
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Highlights
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Underlying Group sales growth2 of
3% for the full year, excluding OPM3 and
the Strategic Review4 businesses.
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Group adjusted operating profit of £595-600m at £:$ of
1.28 for the full year, up c.10% on an underlying basis compared to
2023, resulting in a margin of c.16.8% (2023: 15.6%).
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Free cash flow conversion in excess of
100%5,
ahead of guidance.
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Successfully delivered our 2024 strategic priorities with progress
in Enterprise and scaling AI across our products and services
including the recent launch of an AI powered Digital Language Tutor
(link
here).
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New multi-year strategic Enterprise AI
partnership with Microsoft (link
here):
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o
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Extending our commercial relationship with
Pearson VUE;
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o
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Future collaboration on innovation and joint go-to-market
activities, including in AI upskilling; and
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Opportunity to enhance our AI and technology capabilities across
the business.
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Omar Abbosh, Pearson's Chief
Executive, said:
"I am pleased with the progress Pearson has made in 2024,
successfully executing against our financial and strategic
priorities. I'm particularly encouraged to see the growing
commercial momentum of our AI enhanced offerings and the strategic
Enterprise partnerships that we have established, such as the
latest with Microsoft. These reflect the strength of our
proposition and the opportunities that lie ahead.
The Group is well positioned, with continued confidence, as we look
to build on our strategic and operational progress and deliver
long-term future value for our shareholders."
Underlying sales growth2 of
3% for 2024, excluding OPM3 and
Strategic Review4 businesses;
2% in aggregate
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Assessment & Qualifications sales were up 3% for the full year
and 4% in Q4. Pearson VUE performance was driven by favourable mix,
with PDRI seeing good growth. In Clinical Assessment, sales grew
due to pricing, digital product growth and successful new product
launches. UK & International Qualifications benefited from
volume, pricing, and International growth. US Student Assessment
performance was supported by several key contract
renewals.
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Virtual Schools sales decreased 1% for the full year, due to the
previously announced partner school losses, the impact of which
will normalise in H1 2025. 2024/25 academic year enrolments were up
4% on a same school basis and we opened 3 new schools in 2024
taking our total number of schools to 40. Virtual Learning sales
declined 4% for the full year attributable to the final portion of
the OPM ASU contract in the first half of 2023. Virtual Learning
sales declined 5% in Q4 as expected, driven by a tough comparator
which saw funding improvements in Virtual Schools in
2023.
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Higher Education sales grew 1% for the full year and 2% in Q4, in
line with expectations. In US Higher Education full year sales
growth was driven by continued gains in adoption share, enrolments,
and pricing, partially offset by mix impacts. In the year, there
was growth of 3% in US digital subscriptions and 24% in Inclusive Access. We accelerated the rollout of AI
within our products in the fourth quarter. Pearson+ registered
users increased 1% compared to the prior Fall semester, with paid
subscriptions flat over the same period and in addition we have
been successful in monetising our Channels
product.
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English Language Learning sales increased 8% for the full year with
all three business sub-units contributing to growth. Institutional
continues to deliver strong performance especially in the Middle
East and LatAm. Pearson Test of English (PTE) performed well
against a tough market backdrop of tightening migration policies.
We continue to incorporate AI within our English Language business
unit, launching our first AI powered Digital Language Tutor in the
fourth quarter. In Q4 sales grew 11%, an improvement on Q3 due to
phasing of revenue in Institutional as expected.
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Workforce Skills sales grew 6% for the full year, with a solid
performance in both Vocational Qualifications and Workforce
Solutions. Q4 sales increased by 4% driven by a strong performance
in Workforce Solutions partially offset by Vocational
Qualifications, as the business had a tough comparator with strong
double digit growth in the prior year.
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Evolution of Workforce Skills
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Pearson has a significant opportunity to help enterprises drive
productivity and growth by transforming how they evaluate, assess,
and reskill their workforce, as well as delivering world-class
vocational training and qualifications. To sharpen our focus on the
enterprise customer segment, we have formed a global enterprise
sales team to enable us to better meet the needs of these customers
with a full suite of Pearson solutions. From January this year,
Workforce Skills will evolve to become Enterprise Learning and
Skills, bringing together Pearson's enterprise sales capabilities
globally (excluding those of Pearson VUE). The Enterprise Learning
and Skills business unit will be led by Vishaal Gupta.
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This simplification of the business unit structure will result in
modest revenues and costs being transitioned into the Enterprise
Learning and Skills business unit from Higher Education. More
detail on the financial impact of this change will be outlined at
the full year results. We also note that the sub-unit Workforce
Solutions becomes Enterprise Solutions.
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Strong financial position
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Pearson's financial position remains robust, with a strong balance
sheet, net debt of less than £0.9bn and 2024 free cash flow
conversion in excess of 100%5.
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Executive Changes
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We announce the appointment of Naseem Tuffaha as Chief Business
Officer. Naseem has a successful track record of high growth and
operational excellence at Microsoft, and more recently The Trade
Desk.
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Financial calendar
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Full year results will be announced on 28 February 2025. We will
hold an in-person presentation and Q&A session, during which we
will outline the 2025 outlook.
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Financial
summary
Underlying growth for the fourth
quarter and financial year ended 31st December
2024 compared to the equivalent period in 2023.
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Sales
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Q4
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Full Year
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Assessment
& Qualifications
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4%
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3%
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Virtual
Learning
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(5)%
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(4)%
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Higher
Education
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2%
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1%
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English
Language Learning
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11%
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8%
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Workforce
Skills
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4%
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6%
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Strategic
Review4
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(100)%
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(100)%
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Total
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3%
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2%
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Total, excluding OPM3 and
Strategic Review4
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3%
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3%
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For an accompanying data sheet providing 2024 metrics relating to
sales across select key businesses as well as a breakdown of US
Higher Education Courseware college units and Pearson+ metrics,
please follow this
link
12024 consensus on the Pearson
website dated 30th August 2024; adjusted operating profit of
£598m at £:$ 1.27. As a reminder, every 1c movement in
£:$ rate will equate to approximately £5m adjusted
operating profit impact.
2Throughout this announcement
growth rates are stated on an underlying basis unless otherwise
stated. Underlying growth rates exclude currency movements, and
portfolio changes.
3 We completed the sale of
the Pearson Online Learning Services (POLS) business in June 2023
and as such have removed it from underlying measures throughout.
Within this specific measure we exclude our entire OPM business
(POLS and ASU) to aid comparison to guidance.
4 Strategic Review is
sales in international courseware local publishing businesses which
have been wound down. As expected, there are no sales in these
businesses in 2024.
5 Free cash flow
conversion calculated as free cash flow divided by adjusted
earnings.
Contacts
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Investor Relations
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Alex Shore
Gemma Terry
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+44 (0) 7720 947 853
+44 (0) 7841 363 216
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Steph Crinnegan
Brennan Matthews
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+44 (0) 7780 555 351
+1 (332) 238-8785
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Media
Teneo
Pearson
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Ed Cropley
Laura Ewart
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+44 (0) 7492 949 346
+44 (0) 7798 846 805
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About
Pearson
At
Pearson, our purpose is simple: to help people realise the life
they imagine through learning. We believe that every learning
opportunity is a chance for a personal breakthrough. That's why our
Pearson employees are committed to creating vibrant and enriching
learning experiences designed for real-life impact. We are the
world's lifelong learning company, serving customers with digital
content, assessments, qualifications, and data. For us, learning
isn't just what we do. It's who we are. Visit us at
pearsonplc.com.
Notes
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.pearsonplc.com). 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.
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: 16
January 2025
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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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