Pearson PLC (LON:PSON) has paused is share buyback scheme to better manage cash through the coronavirus pandemic but said it has seen a “significant uplift” in the use of its digital products and online learning services.
Closure of physical sites due to the virus is hitting the business though, with an estimated impact of £25-35mln on operating profit if its VUE testing centres are closed until mid-April.
Waivers of exams by many US states will also see a £15mln hit to the US student assessment business, so far.
The FTSE 100 company said it had seen an uplift in use of its digital learning tools, services and resources available to students, teachers and parents affected by coronavirus-related closures of schools, colleges and universities.
“This will strengthen and deepen these relationships, and should, in time, accelerate the shift to online learning,” Pearson said.
Interest in online learning has been growing “rapidly”, mainly its virtual school offerings, though the company said it "expected" fully online university programmes also to develop.
“We believe that this growing interest should translate into increased billings later in the year and thereafter, although the scale will depend in part on how long the disruption to face to face teaching and learning persists.”
So far the company has spent £167mln of the £350mln buyback this year but said it has roughly £1bn of total liquidity immediately available from cash and a bank facility, while net debt stood at £1.02bn at the end of December.
Shares in the company fell 10% to 451.4p in early trading on Monday, having started the year at 650p.