Pearson 2022 Preliminary Results (Unaudited).
Andy Bird, Pearson's Chief Executive, said:
"These results are testament to the strong momentum that we've been building operationally and strategically over the past 24 months. For a second consecutive year, our financial performance was ahead of expectations, and we saw progress in our strategic initiatives, which are taking Pearson on a new, exciting journey.
Our portfolio continues to strengthen, with our new Workforce Skills talent investment platform created to leverage the structural growth in our markets and increased need for upskilling and reskilling. This will be a key growth driver for Pearson over the coming years. Our confidence for the future is underpinned by ongoing innovation, alongside our increasing divisional interconnectivity. This is combined with accelerating demand for our digital solutions, a growing consumer-focused proposition and our ability to serve more people across their lifelong learning journeys."
Underlying sales growth1 of 5%
Assessment & Qualifications up 8% driven by strong performances in US Student Assessment and UK & International Qualifications as exams resumed, and in Clinical Assessment due to good government funding and continued focus on health and wellbeing. Pearson VUE saw particularly strong growth in the IT and healthcare segments.
Virtual Learning up 4% driven by firm retention rates in Virtual Schools in the prior academic year (2021/22) and favourable revenue mix. OPM sales were up 4%.
Higher Education down 4% driven by a decline in enrolments and a loss of adoptions to non-mainstream publishers, including open educational resources, partially offset by improved pricing. Pearson+ increased paid subscriptions to 406k in the Fall semester (Fall 2021:133k).
English Language Learning up 24% due to increased Pearson Test of English (PTE) volumes, which were up 90%, as global mobility continued to improve with border re-openings and market share gains in India.
Workforce Skills up 7% with growth driven by BTEC and Apprenticeships, GED and TalentLens.
Businesses under strategic review down 16%.
Adjusted operating profit1 up 11% on an underlying basis to £456m
Driven by operating leverage on revenue growth and property cost savings, partially offset by inflation. We continued to invest in growth, including in our new Workforce Skills talent investment platform, supported by the reallocation of costs from other areas of the business.
Headline growth was 18% reflecting underlying performance, portfolio changes and currency movements.
Interest and tax charges were lower than normal in 2022, due to the release of tax provisions. This, along with the significant increase in adjusted operating profit and the reduction in issued shares given the share buyback, has driven a 48% increase in adjusted earnings per share of 51.8p (2021: 34.9p). The effective tax rate was 16% (2021: 20%) and the net interest charge was £1m (2021: £57m).
Cash performance
·Operating cash1 inflow increased on a headline basis from £388m in 2021 to £401m in 2022, representing strong cash conversion of 88% despite the impact of the timing of the disposal of our international courseware local publishing businesses.
Strong balance sheet supports continued investment and increased shareholder returns
Acquisitions of Mondly, Credly and PDRI (subject to close) to support growth strategy across the Pearson ecosystem.
Year-end net debt of £0.6bn (2021: £0.4bn) with leverage at 0.8x (2021: 0.6x).
Proposed final dividend of 14.9p (2021: 14.2p) which equates to a full year dividend of 21.5p (2021:20.5p).
Completed the £350m share buyback with a total of 42.3m shares repurchased in 2022.
And later;
The directors are proposing a final dividend of 14.9p per equity share, payable on 5 May 2023 to shareholders on the register at the close of business on 24 March 2023. This final dividend, which will absorb an estimated £107m of shareholders' funds, has not been included as a liability as at 31 December 2022.
https://www.investegate.co.uk/pearson-p ... 00057455R/Ian.