Pearson starts 2024 with growth as firm ‘pleased’ with AI progress

Educational publisher Pearson said 2024 “started well” as sales grew on the back of strong demand for English language and work skills courses.

The company also said it has seen positive engagement for learning tools where it has integrated AI technology, with plans to grow its use of AI features over the rest of the year.

Nevertheless, shares dipped in early trading despite largely matching analyst expectations.

The FTSE 100 firm told investors on Friday that it is “on track” to meet its guidance for the year after growth in the first quarter.

It revealed that sales grew by 2% over the first three months of the year, with this at 3% excluding parts of the business currently under review.

Pearson told shareholders its assessments and qualifications division record a 2% increase, although it was impacted by its US assessment performance.

Elsewhere, it saw a 4% rise for its virtual schools division as it benefited from positive funding opportunities over the period, but the firm’s higher education arm saw revenues down 4%.

Within higher education however, Pearson highlighted that digital registrations were up 3% and it is “pleased with the engagement we are seeing from both students and faculty on our AI study tools”.

English language sales were particularly strong with 22% growth as it benefited from inflation in Argentina.

The group’s workforce skills division saw a 9% rise for the quarter, in line with expectations.

Omar Abbosh, chief executive of Pearson, said: “The year has started well.

“Financial performance was in line with our expectations, thanks to strong execution across the business, and we maintain a sharp focus on delivering against the priorities that I outlined.

“The year is unfolding as we anticipated, and we continue to expect an acceleration of growth in the second half, which will see us achieve our guidance for the full year.”

Shore Capital analyst Roddy Davidson said: “Forward looking comments indicate that the year is unfolding as anticipated, and that management continues to expect an acceleration of growth during the second half and deliver against full year guidance.

“We are encouraged to note the solid start to full-year 2024 summarised above and, more broadly, continue to believe that a sharper focus on growth (as part of the next stage of the group’s digital journey), allied to a positive long-term outlook for global learning spend bodes well.”

Shares in Pearson were 1.2% lower at 980p on Friday morning.