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Shares in Pearson have soared as investors cheered a fresh set of restructuring measures unveiled by the education group ahead of its AGM on Friday.
Pearson said it was looking at ways to save an additional £300m by the end of 2019 and that it has begun “a strategic review” of its US school publishing business in a bid to speed up its transition to a slimmer, more digital group.
Shares rose 15 per cent to 755p in early trade.
The review of its US school publishing business took some analysts by surprise. Until now more attention has been focused on the group’s college education business, which accounts for just under a third of revenues and has suffered amid a fall in demand for printed text books. The school business accounts for around 8 per cent of group sales.
“What was meant to be a quiet trading update has proved to be nothing of the sort,” analysts at Citi said.
Pearson has transformed itself in recent years from a broader media and publishing group to one focused on education but this strategy – and its chief executive John Fallon – are under pressure. Two major shareholder advisors have urged investors to reject plans to hand him a 20 per cent pay rise, following a series of profit warnings and Pearson posting a record pre-tax loss of £2.5bn in 2016.