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Pearson readjusts digital products and English exams after £2.6bn loss

In the wake of posting a record £2.6bn loss in February, education publisher Pearson has set out more details of how its operations will adjust.

PearsonThe company is planning to sell its 47% stake in leading publisher Penguin Random House while extending the reach of its testing arm, a spokesperson said. Photo: Michael Coghlan.

Pearson's testing arm “grew strongly in 2016”

Last month’s record-breaking loss for the company was attributed to the impact of digital learning on its US textbook sales.

More specifically, Pearson suffered a £2.55bn ‘impairment of goodwill’ charge, reflecting the historical value of acquisitions going underneath market value, namely the acquisitions of Simon & Schuster Education and National Computer Systems.

Pearson suffered a £2.55bn ‘impairment of goodwill’ charge, reflecting the historical value of acquisitions going underneath market value

Already planning to sell its 47% stake in leading publisher Penguin Random House, Pearson also announced that it would further balance its books by selling Global Education and Technology Group (GEDU), its English test preparation business in China, and find a ‘strategic partner’ for English-language learning business Wall Street English.

The Guardian reported that these two business contributed “£253m of revenues and £3m of adjusted operating income last year.”

Speaking with The PIE News, Fathima Dada, managing director for English and Global Schools at Pearson, said the search for a partner for WSE and “possible” sale of GEDU were “part of our strategic shift away from large scale direct delivery services to focus on more scalable online, virtual, and blended services”, adding that “China remains a significant market for Pearson.”

Commenting on its testing arm as a whole, the company said its Pearson Test of English “grew strongly in 2016”, with Dada adding that the expectation for their high-stakes test, PTE Academic, is that it will continue to extend its reach into new markets and institutions.

“PTE Academic was accepted by Immigration New Zealand as proof of English language proficiency for visas with an English language requirement in November,” noted Dada. “It’s also recognised by many leading universities around the world as proof of English language capability.”

At the same time as the extension of PTE testing, there’s sustained activity with Pearson’s Global Scale of English which, as the website indicates is “aligned to the Common European Framework of Reference for Languages and high-stakes tests such as IELTS and TOEFL”.

“Finding a partner for Wall Street English is part of our strategic shift away from large scale direct delivery services”

“Students can now take a GSE Placement test, leading to GSE aligned resources, progress tests and ultimately university entrance exams (PTE Academic),” it states.

Meanwhile, Pearson’s English language digital products have, the company said, performed well, with registrations for digital courseware “boosted by new editions for key titles such as Speakout and Top Notch”.

Pearson added the performance has been particularly marked in key growth markets such as Mexico and Argentina while “continuing to consolidate in core markets such as greater China”.

Pearson’s Poptronica English blended learning interactive tool for 6-12 year olds is one of the products the company said is helping this consolidation.

“It combines a dynamic, child-centered, online game environment with a suite of printed materials (student books, teacher’s books, workbooks) for the classroom,” explained Dada.

Finally, Wider World, a collaboration between Pearson and the BBC, will launch this year. Described as a ‘four level, global secondary course,’ Wider World will, according to Pearson, “provide students not just with the ability to communicate well in English and optimise exam results, but also with the skills and confidence to participate as educated citizens in the global community of the 21st century – with all its unique challenges and opportunities.”

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