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Pearson says makes 'solid' start to year, strong pound drags

Published 25/04/2014, 09:53
UK100
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PSON
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LONDON (Reuters) - Education group Pearson L:PSON said it made a "solid" start to the year, although the strength of the pound against the dollar and some currencies in emerging markets caused headline sales to fall 6 percent in the first quarter.

The British group, which also owns the Financial Times newspaper, said on Friday that sales at constant exchange rates, excluding its Penguin publishing arm which it has merged with Random House and the disposal of Mergermarket, increased by an underlying 1 percent to 900 million pounds ($1.5 billion).

Shares in the group rose as much as 4 percent to an eight-week high of 1,093 pence after the trading update, topping the FTSE 100 L:FTSE index on Friday, as analysts at Citi said underlying revenue growth of 1 percent beat its forecast of a 3-5 percent decline.

The stock, however, remains a long way adrift of the 1,341 pence level it was at the end of 2013.

Citi said it would be wrong to overstate the importance for Pearson of the first quarter, which accounts for less than 20 percent of the overall annual revenue, but 1 percent was still a creditable number for the rise in underlying revenue.

"We don't see the first quarter in itself as a catalyst, but we continue to think investors should revisit Pearson as a potential value opportunity" it said.

Pearson said the impact of the strong pound and restructuring charges would result in first-half adjusted earnings per share (EPS) falling on a year ago, but it would still come in between 62 pence and 67 pence for the full year.

(Reporting by Paul Sandle; Editing by Kate Holton and Alison Williams)

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