Global publishing group Pearson has posted a 6% decline in first quarter headline sales but claimed a "solid" start to the financial year.
In a trading update on Friday, the owner of the Financial Times newspaper said restructuring costs and the strength of the pound sterling against a basket of currencies, including the US dollar, dented its performance. The company generates 60% of its sales in the US market.
However, excluding its Penguin publishing arm which it has merged with Random House and the divestment of Mergermarket, sales at constant exchange rates actually rose by an underlying 1% to £900 million ($1.5 billion).
Giving forward guidance, Pearson said impact of the strong pound and restructuring charges would result in its first half adjusted earnings per share (EPS) falling on a year ago, but would still be in the range of 62 to 67 pence for the full year.
The restructuring and product investment programme, announced in February 2013, is designed to accelerate Pearson's shift towards rising growth opportunities in digital, services and emerging markets.
John Fallon, CEO of Pearson, said: "We have had a solid start to the year, in line with our expectations. Our major programme of restructuring and investment is on track and will drive a leaner, more cash generative, faster growing business from 2015."
At the end of 2013, net debt stood at £1.4 billion. It rose over the first quarter by £0.3 million to £1.7 billion reflecting the acquisition of Grupo Multi net, Mergermarket disposal proceeds and the normal seasonal build-up of working capital ahead of its key education sector trading periods usually seen over the second half of the year.
The company is accelerating of the pace of digitisation. Last year, Pearson said that was an inexorable transition in multiple parts of its business from book and paper-based products to digital delivery of content. Subsequently, it hired former Vodafone executive Albert Hitchcock as its group CIO.
Hitchcock took over from Genevieve Shore, who was CIO and director of digital strategy. She is now chief product and marketing manager. Meanwhile, the digital charge at Pearson's flagship newspaper – the Financial Times – is being led by CIO Christina Scott since May 2012. Her contributions were recently acknowledged in the 2014 edition of the CIO 100.