Company Announcements

Trading Statement

Source: RNS
RNS Number : 1959N
Pearson PLC
16 January 2019
 
Pearson January Trading Update (Unaudited)

16th January 2019

Pearson, the world's learning company, is today providing an update on full year 2018 trading and giving preliminary guidance for 2019. Full year results will be announced on 22 February 2019.

Highlights

Underlying profit growth driven by continued strategic progress in 2018

 

Expect to deliver adjusted operating profit of £540m-£545m for 2018, in line with guidance of £520m to £560m

·      Strong balance sheet with closing net debt at 31 December 2018 expected to be around £200m (2017: £432m).

Digital transformation progressing to plan

·      Signed a further 192 Inclusive Access institutions in 2018 taking the total to nearly 700.

Continuing strong performance in structural growth opportunities

·      In Professional Certification revenues grew 4%.

Simplification on course to deliver cost savings slightly ahead of expectations

·      US K12 Courseware continues to be held for sale.

2019 outlook2 - further financial and strategic progress

·      This guidance is based on existing portfolio and exchange rates as at 31 December 2018. Expect a net interest charge of c.£30m, a tax rate of 21% and adjusted earnings per share of 56.5p to 62.0p.

 

John Fallon, Chief Executive said:

"We have made good progress in 2018, returning Pearson to underlying profit growth. We are also building a platform to enable Pearson to achieve its full digital potential, empowering more people around the world to learn the knowledge and skills to flourish in the changing world of work. There is much still to do, but we are increasingly confident in Pearson's potential to grow and prosper."

 

Financial impact

We maintain a strong balance sheet with closing net debt at 31 December 2018 expected to be around £200m. This equates to a net debt to EBITDA ratio of c.0.3x and c.1.5x on a simplified credit agency view adjusting for leases and other items.

 

Impact of IFRS 16 - Leases

All 2019 guidance provided in this statement is on a pre-IFRS 16 basis.

 

IFRS 16 is the new lease standard which will replace IAS 17 and is applicable for financial years commencing on or after 1 January 2019, and hence will first apply to the Group for its financial year ending 31 December 2019.

 

The standard will result in the operating lease expense being replaced by finance costs and depreciation which will reflect the corresponding lease liabilities and right of use assets that will now be recognised on the balance sheet. 

 

Full details will be given at our FY18 results on 22 February.

 

Notes

Throughout this announcement: growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude both currency movements, portfolio changes and accounting changes. The latter impact is not material.

 

1 Based on December 2018 exchange rates versus prior guidance at December 2016 exchange rates. The impact of FX rates would be to slightly reduce savings on a like for like basis. A significant part of costs and savings from the restructuring programme are US Dollar denominated and in other non-Sterling currencies and are therefore subject to exchange rate movements over the implementation timeframe.

2 2019 guidance excludes the impact of our adoption of IFRS 16 Leases for the year ended December 2019. Full details of the impact of IFRS 16 will be presented with our preliminary results on 22 February.

 

Analyst and investor conference call details

We will hold a conference call at 08.30am today 16 January to discuss this trading update. A replay will be available soon after on our website www.pearson.com.

 

Contacts

Investor Relations

Jo Russell, Tom Waldron, Anjali Kotak

 +44 (0) 207 010 2310

Media

Tom Steiner

 +44 (0) 207 010 2310

Brunswick

Charles Pretzlik, Nick Cosgrove, Simone Selzer

 +44 (0) 207 404 5959

Webcast details

 

 

 

 

 

 

URL for international dial in numbers

Analyst and investor conference call details:
United Kingdom Toll-Free: 08003589473

United Kingdom Toll: +44 3333000804

PIN: 13546259#

Audience URL: https://event.on24.com/wcc/r/1913033-1/52A244363540280035B71F7EEA20102C?partnerref=rss-events

 

http://events.arkadin.com/ev/docs/NE_W2_TF_Events_International_Access_List.pdf

 

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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