Pearson Raises Full-Year Guidance After Jump in Demand for Tests

Thomas Seal, Bloomberg News

A worker uses a desktop computer whilst working from home in Stow Maries, U.K., on Wednesday, April 8, 2020. Among the decisions that my need to be made in U.K. Prime Minister Boris Johnson's absence are whether and when to tighten, extend or lift the current lockdown, which has seen all bars, restaurants and all non-essential shops closed, and people urged to work from home where they can. Photographer: Chris Ratcliffe/Bloomberg , Bloomberg

(Bloomberg) --

Pearson Plc raised its full-year profit expectations for 2021 after big gains in testing and qualification services, a sign Chief Executive Officer Andy Bird’s strategy may be starting to bear fruit.

The London-based education and training group said in a statement Wednesday full-year adjusted operating profit would increase by about a third from 2020 to about 385 million pounds ($524 million), ahead of a previously-expected 377 million pounds.

Pearson is pivoting from being a traditional publisher of textbooks and news to a digital services provider. It reported an 18% jump in testing and qualification services, its largest division. Bird’s flagship app, Pearson+, has notched 2.75 million users and 133,000 paid subscribers.

The stock gained 2.5% in early London trading.

The company’s shares have had a roller coaster ride since former Walt Disney Co. executive Bird’s appointment in Oct. 2020 as he accelerated a restructuring of the business. The stock almost doubled from then until July, but gave up much of those gains in recent months as more people looked for jobs in the business’s core U.S. market instead of signing up for its courses.

However, the results showed a slowdown in underlying growth and were a “mixed bag,” according to a note from Kepler Cheuvreux analyst Conor O’Shea.

Pearson also announced a further change to its board, naming former AT&T Inc. and Coca-Cola Company marketing executive Esther Lee as a new director. That follows the appointment of former Twitter Inc. chairman Omid Kordestani as non-executive chair last month.

Pearson will announce full-year results including a strategic update and 2022 guidance on Feb. 25.