Pearson declares £300m share buyback scheme

Pearson has announced a £300million share buyback programme, with the group on its way to meet annual performance guidance following a strong start to the year.

The education publisher said it plans to begin the repurchase scheme in the second half of 2023 as it revealed trading so far this year had surpassed expectations.

Sales of the group’s English language learning courses skyrocketed 66 per cent, thanks mainly to loosening travel restrictions enabling more people to take the company’s English tests.

Further uplift was provided by market share growth in India and a temporary rise in skilled work visas offered by the Australian Government.

Pearson also saw expanding trade in its assessment and qualifications division as the nursing and IT certification industries drove demand for its computer-based testing operation VUE.

By comparison, virtual learning revenues fell by 14 per cent following the group’s decision to sell its online education services arm to Los Angeles-based private equity firm Regent.

A strategic review of the OPM business was triggered last year after Arizona State University, which had provided around one-third of its sales, stepped away from the pair’s decade-long partnership.

Underlying turnover at the FTSE 100 company grew by 2 per cent overall, or 6 per cent when discounting the effects of the OPM disposal and strategic review.

Chief executive Andy Bird said: ‘Our continuing outperformance and the proven resilience of our business underpins our confidence of delivering on our financial expectations for the full year and over the medium term.’

Last month, Pearson enlarged its portfolio with the takeover of Personnel Decisions Research Institutes (PDRI), a major provider of workforce assessment services to the US federal government.

The firm has said the move would help strengthen its exposure to large employers and create significant synergies between the two companies.

Pearson expects its workforce skills arm to attract additional sales growth following the launch of its new talent investment platform later this year.

Pearson shares were 3.35 per cent higher at 883.2p on Friday morning, making them one of the FTSE 100’s top ten risers. They have increased by about 87 per cent over the past three years.

Adam Vettese, an analyst at eToro, said: ‘The education publisher’s decision to focus on digital and to hive off underperforming or non-core businesses has paid off. It is now a more focused business with more consistent growth.

He added: ‘Compared to a few years ago, the mood music surrounding Pearson is very different. It is a more modern, relevant company now and is reaping the rewards. The challenge will be to maintain the momentum.’