2017.02.2406:14:00UTC+00Pearson Hit with Largest Loss on Record

Global education firm Pearson is facing a collapse in demand in its largest market, as it reported a 2016 pre-tax loss of £2.6 billion after a plunge at its US education operation. The company posted a record loss after taking a £2.55 billion non-cash charge for “impairment of goodwill reflecting trading pressures in our North American businesses”.

Pearson reported its 2016 adjusted operating profit of 635 million pounds, which is 21 percent lower on the year but slightly better than initially expected. Revenues declined eight percent to £4.5 billion. Last month, the firm trimmed its profit forecast for 2017 by £180 million and discarded its target of £800 million for 2018. It also said that it was planning to sell its stake in Penguin Random House in order to strengthen its balance sheet.

Net debt nearly doubled from £654 million to £1.09 billion, as Pearson placed the blame on the strengthening of the US dollar against the pound as well as restructuring costs.

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