Top marks for Pearson after education overhaul
INVESTORS cheered as an overhaul by the education publisher Pearson appeared to be bearing fruit.
The FTSE 100 company brought in former Disney honcho Andy Bird in 2020 to spearhead a shakeup that puts digital learning at the heart of the business.
The City has been wary of this strategy so far but shares shot higher after it said sales rose by 8pc in 2021 and profits would smash estimates, with a rise of 33pc to £385m.
Pearson struggled when the pandemic struck and most schooling and university studying switched online. This hit its textbook and testing income, though it said its testing services are rebounding. And worries that cash-strapped US university students might stop buying textbooks have so far proved unfounded.
Bird’s digital plan includes an online subscription model – it is often likened to Netflix, called Pearson+ – for around £11 a month.
This gives users instant access to its textbooks online and gives it direct access to customers. But Bird also said that learning and offering continued education was becoming a critical way for employers to retain staff.
He said employers need to try to set themselves apart from competitors with incentives other than higher pay if they want to hire more people to counter the ‘Great Resignation’. Pearson finished 4.4pc higher, up 27.6p, to 660p, making it one of the biggest risers on the blue-chip index.
The Footsie as a whole climbed 0.4pc, or 26.11 points, to 7589.66, while the FTSE 250 rose 0.01pc, or 2.31 points, to 22,655.02.
Elsewhere, the stock market was awash with trading updates ahead of the next annual results season. Mining behemoths Rio Tinto (up 3.9pc, or 211p, to 5654p) and Antofagasta, (up 3pc, or 43.5p, to 1482.5p) both advanced despite posting disappointing fourthquarter production reports.
They were boosted by rising metal prices. BHP rose 2.3pc, or 58.5p, to 2473.5p after iron ore and nickel production was up – though traders’ attention was likely on Bloomberg reports that BHP might look to buy rival Glencore – up 1.3pc, or 5.3p, to 419.1p.
Money transfer group Wise gained 2.6pc, or 17.2p, to 689.6p, after the amount of cash sent on its platforms jumped 38pc to almost £21bn in the third quarter. Revenues surged 34pc to £150m on the increase, and the overseas payment group’s annual sales are expected to rise by 30pc.
Crest Nicholson climbed 2.4pc, or 8p, to 347.6p as it moved back into the black in the last financial year despite raising its provision to tackle historic cladding replacements to £43m. The housebuilder said a turnaround plan was complete after a torrid few years, posting profits of £87m, compared to a £13.5m loss the previous year.
But fellow construction group Galliford Try lost ground, falling 1.2pc, or 2.1p, to 176.7p, despite saying it was performing well.
Beyond the maze of financial updates, medical devices maker Smith and Nephew rose 1.7pc, or 21p, to 1263p after it snapped up knee implant specialist Engage Surgical in a deal worth up to £99m. Engage makes the only cementless knee implants available in the US market. Smith & Nephew added that the purchase will boost its surgical robots business.
M&C Saatchi backers shrugged off an announcement that finance boss Mickey Kalifa is stepping down for personal reasons.
He will stay on until a replacement is found though his departure comes at a tricky time for the company after it fended off a bid from tech queen Vin Murria and is bracing for a potential higher offer. Shares in the advertising group fell 2pc, or 3.5p, to 175.5p.