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Pearson regroups around digital businesses as profits tumble

Published: 07:53 08 Mar 2021 GMT

Pearson PLC -

Pearson PLC’s (LON:PSON) new chief executive Andy Bird has announced more restructuring of the online education specialist with the business to be re-jigged into five divisions.

Going forward, Bird said Pearson will focus on the faster-growing areas of its business: Online and digital learning; English language tuition; workforce skills and accreditation and certification.

Costs of the plan will be £40-70mln in 2021 with an additional one-off charge to profits of £130mln for cutting its corporate office infrastructure with a benefit of £10-20mln expected in later years.

The president of global online learning, Rod Bristow, is leaving, while the head of Virtual Schools Tom ap Simon will head a new Virtual Learning division.

Mike Howells, Chief Strategy Officer, will be interim president of Workforce Skills assisted by Albert Hitchcock, who is stepping down as chief technology officer.

Bird added that in addition to the pending sale of K12 Sistemas in Brazil, it is also reviewing the rest of its international courseware local publishing businesses, including Canada.

Pearson confirmed sales in the year to end-December had fallen by 12% to £3.4bn while underlying profits dropped 46% to £315mln, both of which were in line with a trading update in January.

Global Online Learning saw revenues rise by 19% reflecting strong enrolment growth in Virtual Schools. Global assessment sales dropped by 14% and in the international operations revenues were down by 19%.

The final dividend was maintained at 13.5p, with net debt at the year-end reduced to £413mln following the sale of the Penguin book publishing business.

For 2021, Pearson said it expects “year on year revenue growth, with adjusted operating profit to be in line with current market expectations”.

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