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Pearson revival on track as shift to digital pays off

Pearson revival on track as shift to digital pays off
FILE PHOTO: The company logo is displayed outside the Pearson offices in London, Britain August 4, 2017. REUTERS/Neil Hall -
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NEIL HALL(Reuters)
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LONDON (Reuters) – Pearson <PSON.L>, the world’s biggest education company, said on Friday it had traded well in the first half of 2019 and would stick to its revenue guidance, as its strategy to shift away from textbooks towards digital learning begins to pay off.

Pearson posted underlying growth in all divisions, helped by good enrolment growth in its Online Program Management (OPM) business, and reiterated its forecast that sales would stabilise this year before rising in 2020 and beyond. It also nudged up its adjust earnings per share (EPS) guidance.

“We’ve had a good first half, with underlying growth across all divisions, as we start to benefit from accelerating our shift to digital,” Chief Executive John Fallon said.

“We are on track to at least stabilise revenue this year and return the company to top line growth from 2020.”

Pearson has posted more than five years of declines in sales but in February hailed a tipping point for a company that has been hammered by the sudden shift to digital learning.

It has been forced to cut thousands of jobs to shrink its cost base while investing in new digital platforms, but now expects its investments in that new technology to help the group to produce top-line growth.

The British firm upgraded its adjusted EPS guidance to be between 57.5 pence and 63.0 pence, reflecting improvements in the finance charge and taxation at exchange rates at the end of 2018. Previously it had expected adjusted EPS of 55.5p to 61.0p.

Pearson, which has in recent years sold assets including the Financial Times and a 50% stake in the Economist, said a strong performance in key growth areas such as OPM was more than offsetting expected declines in its U.S. higher education courseware and U.S. student assessment units

(Reporting by Alistair Smout, Editing by Paul Sandle and Mark Potter)

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