Research Desk Line-up: Scholastic Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 18, 2017 /Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Pearson PLC (NYSE: PSO), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=PSO. The UK's publishing and education Company announced on August 16, 2017, that it has completed the sale of Global Education (GEDU). The entire business and assets including associated property of GEDU was bought by Puxin Education of China. Pearson expects to realize approximately $80 million from this all-cash transaction. For immediate access to our complimentary reports, including today's coverage, register for free now at:
Discover more of our free reports coverage from other companies within the Publishing - Books industry. Pro-TD has currently selected Scholastic Corporation (NASDAQ: SCHL) for due-diligence and potential coverage as the Company reported on July 20, 2017, its financial results for Q4 FY17 and full year which ended on May 31, 2017. Tune in to our site to register for a free membership, and be among the early birds that get our report on Scholastic when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on PSO; also brushing on SCHL. Go directly to your stock of interest and access today's free coverage at:
Details of the Asset Sale
Puxin Education is a private education Company in China that provides tutorial programs for K-12 education, overseas test prep, and college admission counseling services. Its products and services are available in over 30 Chinese cities.
GEDU was founded in 1997, and it is Pearson's English language learning business and provides English language training and test preparation for Chinese students wishing to study abroad. It provides students with study-abroad consultation, pre-test trainings on IELTS and TOEFL, including international curriculums. GEDU had over 64,000 learners and generated revenues of £78 million and recorded an adjusted operating loss of £4 million in FY16. GEDU had over 1,900 FTE (full-time equivalent) employees in 2016. Pearson had acquired GEDU in 2011.
The sale of GEDU business is part of Pearson's business restructuring initiatives. Pearson has been consciously moving away from any large-scale direct delivery services so that it can concentrate on the more scalable online, virtual, and blended services. Pearson had revealed its plans to sell off GEDU business in February 2017. The Company had appointed Moelis & Company to advise on this matter. The Company has clarified at that time that China was an important market and Pearson will continue to own and manage its successful learning services business in China.
Pearson's Business Restructuring Plans
Pearson has been reporting negative profits in the last few quarters and has been reducing its dividend pay outs, selling non-core divisions and implementing severe cost cutting measures including employee layoffs.
In January 2017, while disclosing its FY16 financial performance, Pearson had laid out its plans for restructuring in FY17. These restructuring decisions included plans for modifying its portfolio and capital structure. The Company also planned to invest in technology for enhancing the Company's courseware service capabilities. The Company had indicated that it would reduce its exposure to large scale direct delivery services and focus on scalable online, virtual, and blended services, across its portfolio.
On August 04, 2017, while sharing the H1 2017 performance and giving the guidance for H2 2017, the Company had announced job cuts as one of the cost saving initiatives. This would impact nearly 3,000 FTE employees. The Company has plans to save approximately £300 million in FY17 to FY19 via various cost saving initiatives.
As part of these initiatives, in July 2017, Pearson sold off its 22% stake in the Penguin Random House Venture (PRH) to its JV partner Bertelsmann SE & Co. KGaA for approximately $1 billion. The proceeds from the stake sale would allow Pearson to maintain a strong balance sheet, invest in transforming its business to meet the challenges of the market environment, and return £300 million to its shareholders via share buybacks. The funds would also ensure that the Company has enough financial flexibility to maintain a solid investment grade credit rating.
About Pearson PLC
London, UK based Pearson, is the world's learning Company, with expertise in educational courseware and assessment, and a range of teaching and learning services powered by technology. The Company provides education products and services to institutions, governments, and individual learners in various countries. The Company has 35,000 employees across 70 countries worldwide.
Last Close Stock Review
On Thursday, August 17, 2017, Pearson's stock closed the trading session at $7.82, dropping 1.01% from its previous closing price of $7.90. A total volume of 924.69 thousand shares were exchanged during the session, which was above the 3-month average volume of 438.51 thousand shares. Shares of the Company have a dividend yield of 10.87% and currently have a market cap of $6.52 billion.
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