Education giant Pearson (LSE: PSON) saw improved profits and margins in 2023, despite a slight dip in sales. The company is confident in its 2024 outlook and is extending its share buyback program.
Pearson reported full-year 2023 sales of £3.67 billion, down 4.3% from the previous year. However, pretax profit surged 53% to £493 million, driven by a cost-efficiency program and strong performance in its Assessment & Qualifications division.
The company also announced a 74% increase in free cash flow and an extension of its share buyback program to £500 million from the originally planned £300 million.
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Pearson now expects sales and adjusted operating profit to be in line with current market expectations for 2024, which forecasts growth in both areas. While the Virtual Learning division is expected to continue declining in the near term, a rebound is anticipated in the coming years. The company also expects its Higher Education division to bounce back in 2024.
“We are proud of our performance in 2023, exceeding expectations once again,” said Chief Executive Omar Abbosh. “We are confident in our future and committed to delivering ongoing value for shareholders.”
Pearson’s share price rose 5% on Friday morning, adding to its year-to-date gain of 4.3%.
