LONDON (Reuters) -Pearson beat first-quarter forecasts and said it would benefit from a lower tax rate this year, underscoring confidence at the education group after it rejected a private equity offer in March.
The British company, emerging from years of turbulence sparked by the U.S. education market moving online, reported a better-than-expected 7% rise in first-quarter underlying sales and reiterated its full-year profit guidance.
Growth was driven by its Assessment and English Language Learning division while sales in its Higher Education unit, long the source of profit warnings, was down 5%, unchanged from 2021.
“We remain sharply focused on the successful execution of our strategy and we are encouraged by the momentum we are seeing across the business,” Chief Executive Andy Bird said.
Pearson rejected three takeover offers from U.S. group Apollo in March, with the third pricing it at 870 pence per share. Its stock was up 3% at 793 pence in mid morning trade on Friday.
Analysts at Citi said the first quarter growth was ahead of market forecasts of 3%-5% and the tax announcement would help lead to an around 20% upgrade on 2022 earnings per share.
Pearson said the statute of limitations on a number of tax provisions had lapsed, leading to a one-off impact in 2022 that will reduce its effective tax rate from current market expectations of around 21% to 15-17%.
The company also announced the acquisition of online learning platform Mondly to boost its position in English Language Learning, a key part of a direct to consumer strategy being pursued by Bird.
(Reporting by Kate Holton; editing by William James, Robert Birsel)
