Pearson has tough lessons to learn as its shares take a tumble

A FALL in revenues and a warning on a challenging year ahead knocked

Pearson’s shares yesterday. The education publisher confirmed a tough outlook for 2020 as a slowdown in US higher education courseware sales continued to offset growth in its digital business.

It posted a 6pc fall in revenue to £3.87bn for its full year, while pre-tax profits plunged from £498m to £232m due to fewer disposals.

Outgoing chief executive John Fallon said the decline in US courseware will “provide a headwind again this year”, while the company will take a smaller hit in 2021.

The group said finance chief Coram Williams will step down at its annual meeting on April 24. He will be succeeded by deputy chief financial officer Sally Johnson.

There was no update on when Mr Fallon will depart, but he said the search for his successor was progressing.

Analysts at Barclays said: “As neither the CEO nor the CFO will be with Pearson for much longer, it is not surprising that there are no new strategic initiatives to be discussed here.”

Net debt rose to £1.01bn, up from £809m in 2018, which analysts at UBS said was the “main negative” of the results.

The group ended the day down 22.6p at 561.4p, as the biggest faller on London’s blue-chip index.

Also falling was

Fears over the impact of the coronavirus outbreak on the luxury sector have prompted analysts at Jefferies to cut Burberry’s target price, prompting it to close down 49.5p at £18.71. The investment bank said Burberry was likely to be “disproportionately impacted” by the spread of Covid-19, the disease caused by the coronavirus, due to the number of its stores in the region.

Burberry has 64 shops in mainland China, 24 of which have been shut temporarily since the outbreak.

Markets nerves on Thursday shifted into fuller fears during Friday’s session, with stock indices across the West posting solid losses on a day driven by reaction to purchasing managers’ index figures.

Across Europe, nearly all sectors closed in the red, with only utilities – seen as a proxy for bonds – outperforming. Tobacco giant Imperial

Brands inched back upwards following a more than 7pc fall on Thursday. It closed up 20p at £17.29 after analysts at Jefferies said the group had announced it had no plans to change its dividend policy.

Gold miners benefited as the precious metal continued to strengthen against a backdrop of global uncertainty. Hochschild Mining rose

by 12.4p to 201p, while

Fresnillo climbed 20.8p to 712.2p. The metal is stood at a seven-year high.

Among London’s midcaps, Moneysupermarket was one of the biggest fallers, cooling off 15.7p to 352p after posting strong gains during Thursday’s session.

Liberum analysts said they took confidence from the update, but slightly lowered their target price on the price comparison site nonetheless.

In a note to clients, they wrote the tweak was “not to reflect a change in the fundamental view on the strategy of Moneysupermarket, but to adopt more conservative assumptions on outer year earnings”.