Ticker PSON

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As of 10:48 20 Apr 2019
Market cap. Pound sterling
6,590.45 million
As of 10:48 20 Apr 2019

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Nice surprise

Publisher Pearson, which reported a loss of £2.5bn in 2016, has today said profits for 2018 were £590m.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said the group had been left in "tough spot" by the trend to cheaper study materials and the move to digital.

"That means sales have been flat lining, so it’s come as a nice surprise to hear it expects performance to improve from here. Pearson has historically relied too heavily on cost savings to keep itself going - it should be applauded for squeezing out such savings, but at some point the juice has to run out and sales growth needs to takeover."

More on Pearson

Today Programme

BBC Radio 4

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The FTSE 100 publisher's profit for the year rose to £590m.

John Fallon, the chief executive of Pearson, told BBC Radio 4's Today Programme that Brexit he wanted to avoid no deal Brexit.

"I really do hope we avoid no deal Brexit .. As I talk to my colleagues across the country.. the message that is coming through loud and clear is we have to refind the British ability to talk to each other and listen to each other in a more sensible way and more empathetic way and we have to change the tone of the debate in this country and we have to do it quite quickly".

The focus for the company should be on education rather than on Brexit, he said.

Pearson 'a lot to do'

Publisher Pearson says underlying revenue was down 1% last year.

John Fallon, chief executive, said: "We have a lot still to do, but we expect company wide sales to stabilise this year, and grow again in 2020 and beyond".

Pearson sell US courseware business for $250m

US graduates
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Educational publisher Pearson has flogged its US K12 courseware business to Nexus for $250m (£194m).

The money will be paid over the next seven years and the company has agreed a sell-on fee of 20% of all future cash flows and 20% of net proceeds if the business is sold after that.

The company said that move "has been structured to provide Pearson with the potential to capture future upside in the US K12 courseware adoptions market over the coming years".

The sale was part of Pearson's "ongoing work to become a simpler and more efficient company", it said.

Chief executive John Fallon said: "The sale frees us up to focus on the digital first strategy that will drive our future growth."

Next and Glencore shares gain

Glencore mining operation
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Glencore plans to buy back more shares

Next has cemented its place at the top of the FTSE 100 risers today after lifting its full-year profit guidance.

Its share price is up 8.39% to £55.53.

Commodities and mining firm Glencore is also one the morning's largest gainers, up 2.5% to 338.27p after it said it will buy back $1bn of additional shares.

Educational publisher Pearson shares are the biggest faller, down 2.7% at 863.2p.

After a profit warning on Monday, Thomas Cook's shares recovered a little today - up 5.7% at 59.15p - to lead the FTSE 250 risers.

The wider FTSE 250 is largely flat at 20,491.24.

Education publisher Pearson pleases market

Graduating students
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Shares in education publisher Pearson climbed 3% today after it confirmed it is making faster than expected progress in some areas of its restructure.

The company said total cost savings are expected to be £300m a year by 2020.

it posted pre-tax profits of £421m today, following a £2.5bn loss last year on the back of a major impairment in its US business.

Chief executive John Fallon said: “Pearson has made good progress against its strategic priorities in 2017 with further simplification of the portfolio, strengthening of our balance sheet and delivering results at the top end of guidance."