Pearson announces £300m share buyback due to rising demand for the education group’s English language courses
- Sales of the group’s English language courses skyrocketed by 66%
- Pearson shares were among the top ten risers on the FTSE 100 on Friday morning
Pearson has announced a £300 million share buyback program which puts the group on track to meet annual performance guidelines after a strong start to the year.
The education publisher said it plans to begin the buyback program in the second half of 2023 as it revealed that trading so far this year had beat expectations.
Sales of the group’s English language courses skyrocketed by 66 percent, largely due to the relaxation of travel restrictions allowing more people to take the company’s English tests.
Strong growth: Sales of Pearson’s English language courses skyrocketed 66 percent, mainly due to easing of travel restrictions
Further uptick was driven by market share growth in India and a temporary increase in skilled work visas offered by the Australian government.
Pearson has also seen business grow in its assessment and qualification division as the nursing and IT certification industries drive demand for its computer-based testing operation VUE.
In comparison, virtual learning revenues fell 14 percent following the group’s decision to sell its online education services arm to Los Angeles-based private equity firm Regent.
A strategic review of OPM’s business was initiated last year after Arizona State University, which accounts for about a third of its revenue, relinquished the pair’s decade-long partnership.
Underlying sales of the FTSE 100 company grew 2 percent overall, or 6 percent excluding the effects of the sale of OPM and the strategic review.
Chief executive Andy Bird said, “Our continued outperformance and the proven resilience of our business support our confidence to deliver on our full year and mid-term financial expectations.”
Last month, Pearson expanded its portfolio with the acquisition of Personnel Decisions Research Institutes (PDRI), a major provider of personnel assessment services to the US federal government.
The company has said the move would help bolster its exposure to large employers and create significant synergies between the two companies.
Pearson expects its people skills division to attract additional revenue growth following the launch of its new talent investment platform later this year.
Pearson shares were 3.35 percent higher at 883.2p on Friday morning, making them one of the FTSE 100’s top ten gainers. They’re up about 87 percent in the last three years.
Adam Vettese, an analyst at eToro, said: “The education publisher’s decision to focus on digital and divest underperforming or non-core businesses has paid off. It’s now a more focused company with more consistent growth.
He added, “Compared to a few years ago, the mood music around Pearson is very different. It is now a more modern, relevant company and is reaping the benefits. The challenge will be to keep the momentum going.’