Bucking the trend set by recent trading statements and results announcements, the educational publisher Pearson plc (LON:PSON) is actually nudging up profit guidance.
It said while the structural problems in US higher education were likely to “persist” in the medium-term, there had been some temporary respite.
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This and the benefits from the company’s cost-savings programme mean operating profits are now expected to be £576-£606mln, up from £546-£606mln.
Pearson added that a “favourable outcome” to historic claims meant its effective tax rate would be 16% compared with the forecast 21%.
Digital transformation going to plan
The company’s digital transformation is going to plan, and there are plans to return around £300mln of surplus cash in the form of a share buyback.
But chief executive John Fallon isn’t getting carried away by the apparent sprouting of the green shoots of recovery.
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"We expect tough market conditions in our biggest business to continue over the next couple of years,” he told investors.
“We're focused on being the long term winner in digital learning and creating sustainable value for our shareholders."
The trading statement revealed finance costs will be around £4mln higher than budgeted at £78mln, while net debt will be marginally lower at just over £1.3bn.