Pearson will switch from selling to schools to selling to students

Educational publisher Pearson is to change from selling mainly to schools and colleges towards selling directly to consumers, including students.

Pearson’s CEO Andy Bird (pictured) has announced that the educational-publishing company will overhaul its business to draw a line under a “tumultuous decade”, says Bethan Staton in the Financial Times: it “issued seven profit warnings in as many years”. 

The plan is to shift from selling mainly to schools and colleges towards selling directly to consumers, including students. The company is also looking to take advantage of what it sees as the growing demand for “lifelong learning” as workers start to spend more time continuously upgrading their skills throughout their careers. These changes may cause Pearson some short-term pain, says Simon Duke in The Times. Bird says restructuring the company into five divisions, including a new consumer division, will cost “between £40m and £70m this year”. At the same time the decision to slash office space, to take advantage of a move towards remote working, will “reduce reported profits by about £130m this year”, although it will also cut long-term overheads.

Bird will have to “move quickly to keep investors on side”, especially when patience has already been “tested” over his pay packet, says Ben Woods in The Daily Telegraph. Another concern is whether Pearson’s success in selling to the college market can extend to the “super competitive” lifelong-learning market, especially since the company has “stoked up expectations” of a “Netflix of Education”-style revolution before, only to leave investors “wanting”. Still, it’s a necessary gamble: lifelong learning “is clearly where the growth is”. 

Recommended

Will the government’s green plans hit the price of your home?
House prices

Will the government’s green plans hit the price of your home?

UK house prices are still rising fast. But the government’s plan to reach net-zero carbon emissions could halt that – for some of us, at least. John S…
21 Oct 2021
If you want to get exposure to bitcoin, I have this great idea for you
Bitcoin & crypto

If you want to get exposure to bitcoin, I have this great idea for you

As bitcoin climbs to new highs, you can now buy a bitcoin ETF. But if you really want to get some exposure to bitcoin, there’s a much better way, says…
20 Oct 2021
Too embarrassed to ask: what is a dividend yield?
Too embarrassed to ask

Too embarrassed to ask: what is a dividend yield?

Learn what a dividend yield is and what it can tell investors about a company in MoneyWeek's latest “too embarrassed to ask” video.
19 Oct 2021
Index tracker funds won't shield your wealth from inflation – here's why
Investment strategy

Index tracker funds won't shield your wealth from inflation – here's why

If you want your portfolio to survive in an inflationary world, a broad index-tracker fund won’t cut it. You need to be a lot more selective than that…
19 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
Why the world’s most important economic data release has unnerved markets
US Economy

Why the world’s most important economic data release has unnerved markets

The US added only 194,000 jobs in September, far shorter than the 500,000 that were expected. John Stepek explains why markets didn't react as they no…
11 Oct 2021