Pre-tax losses soar to £2.6bn as group – planning to sell its Penguin Random House stake – is hit by slump in US textbook sales.
Pearson has reported a pre-tax loss of £2.6bn for 2016, the biggest in its history, after a slump at its US education operation.
The world’s largest education publisher, which in January saw almost £2bn wiped from its stock market value after issuing its fifth profit warning in two years, reported the record loss after taking a £2.55bn non-cash charge for “impairment of goodwill reflecting trading pressures” in its North American businesses.
A spokesman said the charge related mainly to historic acquisitions of Simon & Schuster Education and National Computer Systems, purchased in 1998 and 2000 respectively, as a “necessary consequence” of the lower profit expectations announced last month.
In January, the company slashed its profit forecast for this year by £180m and scrapped its target of £800m for next year. It also announced that it planned to sell its stake in the world’s largest book publisher, Penguin Random House, to strengthen its balance sheet.
The profit warning was prompted by the collapse of its US higher education business, which is struggling with a decline in textbook sales and the transition to digital learning. The US business accounts for two-thirds of Pearson’s revenues and profits.