Pearson’s half year operating profit is an eye-catching £233m, significantly more than it reported last year. But a big part of that came from gains on asset sales.
After making adjustments, including for restructuring costs and exchange rates, that headline number falls to £107m, which still represents a 46% improvement on the equivalent figure last year.
The shares rose 3% on the news
Pearson has declared an interim dividend of 5.5p, up from 5p last year.
“The scale of the transformation at Pearson is highlighted by the size of the adjustments it’s making to profit numbers. Operating profits are, in reality, less than half of the £233m reported figure, which is massively boosted by asset sales,” analysts said.
”There’s still one or two bits and pieces left to go, but Pearson’s strategic repositioning is now largely complete. What’s left behind is a pure-play on education, historically not a bad place to be. The problem is the sector is in the midst of change. A trend towards online services is at the heart of the disruption.
“To justify the sale of assets like the Financial Times and Economist newspapers, Pearson needs to prove itself capable of thriving in this brave new world of interactive education. These results will give some assurance on that front, but the bumper sales season doesn’t come until later in the year. That makes full year results the more important test.”