First Read Pearson Plc: 1H EBIT ahead of cons, lowered English guide

Research evidence excerpt

First Read Pearson Plc: 1H EBIT ahead of cons, lowered English guide

UBS Cons.

(PTE), where market conditions are more difficult. Higher Education grew +2% (VA cons 12/26E 69.55 70.63

and UBSe: 2%), supported by core US Courseware and a return to growth in K12, partly 12/27E 78.42 78.51

offset by challenging conditions in mature international markets. Virtual Learning sales 12/28E 90.56 88.20

increased by +19% (Cons: 18%, UBSe: 17%) reflecting 15% spring-semester

enrolment growth, funding growth and favourable mix. Enterprise Learning & Skills Jo Barnet-Lamb

Analyst

grew +7% (VA cons: 7%, UBSe: 8%), with strong performance in Vocational

joseph.barnet-lamb@ubs.com

Qualifications. Enterprise Solutions grew strongly driven by the monetisation of strategic +44-20-7567 4599

partnerships.

Ashna Gautam

Associate Analyst

Q: Has the company's outlook/guidance changed?

ashna.gautam@ubs.com

A: Pearson reiterated FY26 Group guidance, continuing to expect mid-single-digit +44-20-7567 6364

underlying revenue growth for the FY vs. consensus of 4.8% and UBSe of 4.7%. The

Yulia Kazakovtseva

Group continues to guide to adj. EBIT of £640m to £685m at a £:$ rate of 1.35, adj. net Analyst

finance costs of approximately £80m, an adj. ETR of approx. 25%, and FCF conversion yulia.kazakovtseva@ubs.com

of 90% to 100%.The main change was that the company lowered its guidance for +44-20-7901 5507

English Language Learning (ELL), now expecting PTE to decline given the challenging

market backdrop, with the division expected to return to growth in Q4. This compares

with previous guidance for ELL growth to exceed 2025, supported by market-share

gains and pricing, and for PTE to return to growth. Guidance for the other divisions was

reiterated.