Pearson PLC (LSE:PSON) reported slower sales for the final quarter of 2022 but profits were well ahead of market forecasts.
Shares in the online education specialist were little moved on Wednesday morning, having been the second-best performer on the FTSE 100 last year with gains well over 50%.
Underlying sales growth of 5% was reported in a year-end statement, down from 7% in its nine-month update, with sales at Assessments & Qualifications, Higher Education and Workforce Skills all down in the fourth quarter.
Adjusted operating profit is expected to be roughly £455mln, up 11% on an underlying basis compared to forecasts that had been for around £416mln back in October.
Chief executive Andy Bird said the year was better than original expectations as it demonstrated “focused execution and the ongoing momentum in the business as we continue to implement our new strategy that underpins our future growth”.
The group was “on track” to deliver approximately £120m of cost cuts in 2023, of which around £20mln will be used to offset inflationary pressures.
Bird said the group “is well positioned to make further progress reflecting the structural growth in our markets, the continued need for upskilling and reskilling, and the strength of our offering”.
Analyst Roddy Davidson at Shore Capital said although the update was "not exclusively positive" – reflecting the breadth of the portfolio of activities and distinct dynamics of the underlying markets – he was pleased by the "headline performance, financial strength and operational and strategic progress achieved over the last year".
"More broadly, we also like the group’s growing exposure to and substantial investment in digital products, and its status as a beneficiary of a positive long-term outlook for global learning spend."
At the segmental level, he noted Assessment & Qualifications sales ended on a down note due to phasing but were up 8% for the year with progress across virtually all areas, while Higher Education saw a 4% full-year decline, reflecting lower enrolment partly offset by improved pricing.
Shares were up 0.5% to 925.6p after around an hour's trading.