Pearson returns to the black

Academic publisher Pearson returned to profit in 2017 after posting a loss of nearly £2.5bn in 2016, its annual results showed today.

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Held by long term backers Nick Train and Schroders Investment Management, Pearson today announced it generated a pre-tax profit of £451m in 2017 and an adjusted operating profit of £576m, which it said was at the top end of its expectations.

As a result, the FTSE 100 company and former Financial Times owner saw its share price rise nearly 5% this morning and chief executive John Fallon said he expects profits to grow further this year as the company continues to streamline its operation.

“Pearson has made good progress against its strategic priorities in 2017 with further implication of the portfolio, strengthening of the balance sheet and delivering results at the top end of guidance,” said Fallon.

“We are confident we will make further progress against our strategic priorities and grow underlying profit in 2018,” he added.

While revenues were broadly flat, Pearson said its 54.1p adjusted earnings per share (EPS) also came in above guidance of 49p to 52p.

In August, the firm announced a cost savings programme, which it noted is on track to deliver £300m of cost saving by the end of the year. It also announced plans to sell its K12 US School courseware business.

Looking to 2018 it said it expects to report an adjusted operating profit of between £520m and £560m and adjusted EPS of 49p to 53p.

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