Educational publisher Pearson suffers £300m caning amid virus disruption

Pearson suffered a sales slump as the schools and test centres that buy its titles were forced to shut during the pandemic, writes Michael O’dwyer.

Revenues at the educational publisher fell to less than £1.5bn in the first half of the year – more than £300m lower than the same period last year.

The FTSE 100 company reported a pre-tax profit of £35m, better than the first half of last year but well behind the £232m profit reported for 2019.

The company maintained its 6p a share interim dividend despite the slide and said its balance sheet was strong with £1.6bn of available liquidity. John Fallon, Pearson’s chief executive, said: “Covid-19 has had a major impact on trading, but we are encouraged by the improving trends and pick-up in sales in June.” The company said its search for a replacement for Mr Fallon was “well advanced”. Chairman Sidney Taurel said the board had spoken to “a wide range of highly qualified candidates”.

Mr Fallon, who has led Pearson since 2013, announced in December that he would step down this year.

Pearson has struggled in recent years and issued a string of profit warnings. It has sold off Penguin Random House, the Financial Times and a stake in The Economist.

Activist investor Cevian has increased its stake, strengthening its potential claim to a seat on the board as it campaigns for a shake-up.

Online sales rose by 5pc, but Pearson’s testing and international businesses suffered a drop of about a quarter as exams were cancelled and test centres shut.