Pearson hit as closed schools buy fewer textbooks

Academic publisher Pearson saw a big drop in sales in the first half of the year as closed schools needed fewer textbooks to teach.

Pearson said that its underlying revenue had taken a 17% hit in the six months to June 30 as it swung to a loss.

Adjusted operating loss hit £23 million across the six months, from a profit of £144 million in the same period a year earlier.

Coronavirus took a £140 million chunk out of the profit even after efforts to cut costs.

Underlying sales were down 35% in April, 32% in May and 19% in June compared with the same months in 2019.

“Covid-19 has had a major impact on trading, but we are encouraged by the improving trends and pick-up in sales in June,” said chief executive John Fallon.

“Uncertainty remains, but the purpose, grit, speed and ingenuity shown by Pearson colleagues is helping educators and learners around the world to adapt to the pandemic and will ensure that the company itself emerges stronger from it.”

One positive among the troubles of lockdown was an increased interest in the company’s online offering as students were stuck at home.

Online learning sales were up 5% even as sales elsewhere fell.

“The long-term shift to online learning is accelerating,” Mr Fallon said.

“The lead indicators of digital take-up of our products are encouraging, and signals that our focus on experience, outcomes and affordability will prove a winning combination.”

However, bosses are now looking nervously towards the next academic year, closely watching when governments plan to reopen their schools.

The company said: “At this stage, it remains difficult to predict the ultimate disruptive impact of the Covid-19 pandemic on Pearson’s performance for the full year.

“However, the second quarter performed in line with our expectations and, while risks remain, particularly around enrolments in the back-to-school period and local lockdowns impacting schools reopenings, based on our current assessment of these trends we are on track to deliver adjusted operating profit broadly consistent with market expectations.”