Assessment and PTE drive Pearson profit in 2022

Published 07/03/2023

Pearson recorded an 11% rise in profit to reach £456 million in 2022, the company’s Preliminary Unaudited 2022 results show. Statutory operating profit was £271m, up from £183m in 2021.

Sales in assessment & qualifications were up 8%, driven by US student assessment and UK & international qualifications, virtual learning up 4%, as were OPM sales. English Language Learning grew by 24%.

Pearson Test of English volumes drove the English language learning segment, increasing by 90% to 827,000 “as global mobility continued to improve with border re-openings and market share gains in India”, the report noted.

Pearson VUE saw “particularly strong growth in the IT and healthcare segments”, the report noted, with volumes in the professional licensure exam increasing to 19.4m in 2022 from 16.8m in the previous year.

While higher education was down by 4% due to enrolment declines and “a loss of adoptions to non-mainstream publishers”, eTextbooks platform Pearson+ saw paid subscription numbers rise to 406,000 in fall 2022, up from 133,000 in fall 2021.

The results are “testament to the strong momentum that we’ve been building operationally and strategically over the past 24 months”, according to Pearson chief executive, Andy Bird.

“For a second consecutive year, our financial performance was ahead of expectations, and we saw progress in our strategic initiatives, which are taking Pearson on a new, exciting journey,” he said.

“Our portfolio continues to strengthen, with our new Workforce Skills talent investment platform created to leverage the structural growth in our markets and increased need for upskilling and reskilling.”

Pearson anticipates Workforce Skills revenue will see double-digit growth in 2023.

“We saw progress in our strategic initiatives, which are taking Pearson on a new, exciting journey”

The acquisition of Mondly, digital credentials specialist Credly and the subject to close PDRI deal will support growth strategy across the Pearson ecosystem, the company added.

Mondly is key to implementing Pearson’s credentials segment and boost its direct to language learning consumer space. The acquisition of workforce assessment provider PDRI will “expand Pearson’s services to US federal agencies and grow our presence with large employers”, the report added.

Upskilling and reskilling will “be a key growth driver for Pearson over the coming years”, Bird continued, as the company continues to reshape its portfolio.

“Our confidence for the future is underpinned by ongoing innovation, alongside our increasing divisional interconnectivity. This is combined with accelerating demand for our digital solutions, a growing consumer-focused proposition and our ability to serve more people across their lifelong learning journeys.”

In 2023, the education company is “confident” of further group underlying sales growth of low to mid-single digit. This expectation excludes OPM products, a segment which “continues to be under strategic review”.

English language learning revenue is expected to grow by high-single digits with increased margins, and assessment & qualifications revenue will see low to mid-single digit growth.

The report said that virtual schools revenue is likely to decline by mid-single digit as a result of the “Covid-19 cohort unwind in the 2022/23 academic year, as well as the loss of a major school”.

The report shows that virtual schools US enrolments fell to 106,000 in 2022 from 111,000 in 2021, and OPM student enrolments declined slightly to 270,000 from 275,000 in 2021.

“We remain confident in the long-term performance of this [Virtual Learning] division and will launch Career Academies aimed at supporting teenagers who wish to gain career education and experience. Four Career Academies will operate in the 2023-24 school year in four states and enrollment is underway,” Pearson added.

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