Pearson PLC (LSE:PSON) raised its sales and profit forecast for 2021 following a “strong” financial performance.
Full-year adjusted operating profit is now expected to come in around £385mln, a rise of 33% on the previous year and above the market consensus of £376mln, while sales are forecast to grow by 8%, the group said in a trading update.
"We made great progress in Q4 and are delivering a strong full year performance, with sales growth and profit exceeding our original guidance,” said chief executive Andy Bird.
Sales in Assessment & Qualifications, Pearson’s largest business, were up 18% last year, driven by the strength of Professional Certification (VUE), Clinical Assessment and US Student Assessment, following a recovery from COVID-19. But sales growth slowed to 2% in the fourth quarter, as growth in US Student Assessment was partially offset by expected declines in VUE.
In Virtual Learning, sales grew by 11% after strong enrolment growth boosted Virtual Schools sales. But in the final quarter, modest enrolment growth led to a 4% decline in Virtual Schools sales.
Higher Education sales were down 5% for the full year, with growth in Canadian and UK Courseware more than offset by a 6% decline in US Higher Education Courseware. The decline in sales slowed to 2% in the last three months of the year after lower international sales were partially offset by growth in the US.
Sales in Workforce Skills increased by 6% in 2021, while English Language Learning sales rose by 17% due to a COVID-19 recovery in both International courseware and Pearson Test of English (PTE).
In the fourth quarter, English Language Learning sales growth picked up even further, rising 21%, after as pandemic restrictions in Australia and India were lifted.
During the year, Pearson launched a direct-to-consumer strategy led by new digital learning service, Pearson+, which the company said continues to make good progress with 2.75 million registered users.
“Led by a strong management team, we are repositioning the business, driving digital innovation and an increased focus on the consumer through the launch of Pearson+. We are well placed to build on this momentum in the year ahead and look to the future with confidence," Bird said.
The group said it has a strong balance sheet, net debt of less than £400mln and a strong cash performance.
In a separate statement, Pearson announced the appointment of experienced business leader Esther Lee as an independent non-executive director.
Shares rose 6.36% to 672.60p in midmorning trade.