Pearson investors buoyed by progress on turnaround

SHARES in education giant Pearson hit their highest level in 18 months after the publisher’s first-quarter results suggested it was on track with a major turnaround.

Revenues increased by 1pc in the three months to March, while John Fallon, the chief executive, confirmed Pearson was expected to report profit growth this year. The news sent shares up by 7.7pc to 893.6p yesterday.

Mr Fallon is attempting to revive the business by casting off non-core assets and cutting the debt pile following a collapse in sales and a string of profit warnings over the past four years.

In February, Pearson reported that it had returned to profit after booking a £2.5bn loss the year before on the back of a major impairment of its US business. Mr Fallon said the cost-cutting programme announced in August last year would deliver £300m of annual savings by 2020, and would save Pearson £95m by the end of 2018.

Net debt in the first quarter fell to £600m, from £1.1bn this time last year.