As part of its report on its first half financial performance, Pearson said results at Penguin Random House were in line with expectations. Overall sales were ahead of the first six months of 2018 thanks to higher print book and audiobook sales, which offset another decline in e-book sales. Pearson’s 25% stake in PRH contributed £25 million to the company’s adjusted operating profit, up from £22 million in the first half of 2018.
Total adjusted profit for Pearson was £144 million in the first half of 2019, up from £107 million a year ago. The increase reflects cost-savings from the publisher’s ongoing restructuring plan that cut overhead by about £60 million in the first half of the year. The cost-cutting was achieved, in part, by the closing of two offices and the completion of 80% of a planned round of layoffs. The company said it is on track to deliver more than £330 million in annual savings starting in 2020
Total revenue at Pearson fell 2% to £1.83 billion, largely due to the sale of some assets, including that of its US K-12 Courseware business. Changes to its asset holdings reduced revenue by £141 million in the period, while currency movements increased revenue by £69 million. Excluding the impact of portfolio changes and currency movements, total revenue was up 2%.
Pearson drew lots of headlines earlier this month when it announced that future releases of its 1,500 active U.S. Higher Education Courseware titles will be “digital first” and updated on an ongoing basis. In its financial update, Pearson noted that the format switch will drive “benefits in content delivery, speed and cost, and further facilitates our move from ownership to subscription-based access models.”
Pearson said it is making progress in its shift from an ownership model, to a subscription model, in the educational market. The number of colleges taking part in the company's subscription service grew by 84 in the first half of the year, to 781. Pearson said this number represents about 16% of its U.S. Higher Education Courseware revenue, up over 40% from the first have of 2018.