Sales at education giant Pearson (PSON.L) fell 10% in the three months to September as a slump in its textbook and testing business eclipsed a rise in online learning.
It was the third consecutive quarter of decline, but an improvement on the second quarter’s 28% fall.
The FTSE 100 publisher, which is transitioning from traditional textbooks to digital, has suffered from tumbling sales this year as schools and testing centres shut in response to the COVID-19 pandemic.
However, digital revenue did manage to soften the pandemic blow as its online education business posted a 32% increase.
Enrolment in virtual schools jumped 41% in the first nine months of the year but overall sales were 14% lower in the period compared with 2019.
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Although Pearson expects full-year results to be broadly in line with market expectations, it warned of “larger than usual” uncertainties, particularly regarding international sales.
Its business unit which markets textbooks in the US and Canada dipped 15% in the third quarter, while its international division tumbled by 26%.
Shares hit a two-month high following the update but later gave up their gains. They are currently trading 1.5% lower in London.
John Fallon, Pearson’s outgoing chief executive, said: “This has been a challenging transformation for all of us but we are starting to see the benefit of all our work to sure Pearson becomes the winner in digital learning.”
Fallon is set to leave the company this week after a challenging tenure of almost eight years. During his time at the helm the company offloaded a range of investments and suffered a string of profit warnings, which rocked shareholder confidence.
In December, the blue-chip business revealed a £530m ($686m) deal to sell its stake in Penguin Random House, and in 2015 sold the Financial Times newspaper to Nikkei for £844m.
Media veteran and former Disney director Andy Bird, is set to replace Fallon.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “We’re still in extraordinary times and the really important question is whether the current enthusiasm for remote learning is sustained in the post-pandemic world. We suspect the incoming management team will have their work cut out.”
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