Lupo di mare
08 Sep 2016
Sp fall In case, like me, you're wondering why the sp has tanked:-"Education publisher Pearson led fallers in the FTSE 100, down 4.0% on a read-across from US higher-education publishing peer J Wiley, which reported a significant decline in revenue in its Education business on Wednesday."
nk1999
17 Aug 2016
Berenberg "Pearson may cut dividend, Berenberg warnsBerenberg analysts remain bears on Pearson (PSON) fearing the world’s biggest education group is complacent about the challenges it faces and may have to cut its dividend.Reiterating their ‘sell’ stance and 790p share price target, Berenberg’s media team warned: ‘We do not believe Pearson will hit its 2018 targets because it has underestimated the structural threats that its higher education courseware business faces. In a scenario where its profits fall short of target, Pearson will have to cut the dividend. We also think Pearson will de-rate, reflecting the fact that it offers low growth in both top and bottom line.’Berenberg analysts Sarah Simon, Alastair Reid and Robert Berg believe that Pearson’s assumption of flat student enrolment numbers in the US this year is optimistic given the strong labour market is reducing the need for some to go back to school.They also said Pearson underestimated how fast the trend for ‘open educational resources’(OER) could grow following Amazon’s announcement last month that it would launch its ‘Inspire’ business offering free content to teachers. Pearson shares slipped 8p or 0.9% to 888.5p. They have retreated 8% in the past month after disappointing half-year sales figures removed some of the confidence in the restructuring announced at the start of the year. The stock is up 20% so this year."From Citywire.
SeriousInvester
11 Aug 2016
Ex-Divi = 18th Aug (next thurs) = 18p = over 2% Yes over 2%!!!Explains why the derampers (MMs) on this board want you to sell them your shares!SI.
Hardboy
03 Aug 2016
Re: Re: Games, "was my last post too harsh do you think?"Not at all. They are effectively making a loss, have large debts and are going into markets with risks which you accurately outline. So the doom scenario has real potential.I just think that the people who know a business best should be the BoDs, and their official releases are the most accurate information we PIs can go on. My tentative buy was based on their projection that they are on track to be delivering profits of £800m (I think it was) by 2018; and if you commute that to share price it is a healthy upswing from here. I think the sensible policy would be to keep a watching brief, which I assume is what you are doing. If they do it, it should give the markets a real sense of confidence in the Board which should help the sp even more. Of course 2018 is a long way off and there will be a lot of market changes since then. Didn't Donald Trump say something like he was going to destroy equity markets if he becomes President?
gamesinvestor
03 Aug 2016
Re: "I've just done merit a tentative buy recommendation."HB - was my last post too harsh do you think?Is there a massive misjudgement in the potential for this to go belly up?Games - maybe it is, but still uninspired to say the least. I mean long does it take to send a digital version to your customers -- should be pretty quick once the material has been scanned, copied and pasted
gamesinvestor
03 Aug 2016
Re: Re: "I sold Pearson some time ago"LK -- Good move, it was around and about the same time as I did too. Fallon has to be one of the most uninspiring CEOs in the FTSE100.This could easily go bust, with borrowings of over £2Bn and profits that went negative last year.The digital role out is lovely, but like many digital offerings it gets harder to command the same money.Easier to proliferate and cheaper of course, but if you can't command the same money it'll be a struggle. Digital content also seems a lot easier to copy.This one is the biggest loser for Nick Train's Finsbury Growth and Income Fund. Apart from that he's done pretty well for his punters over the years.Games -- Off my list.
LK Hyman
29 Jul 2016
Re: Hardboy,"I suspect the share price will weaken between now and then"You were right there, m8! I sold Pearson some time ago .... heard Fallon on the wireless and was not impressed. Good luck with it, though.LKH etc
Hardboy
29 Jul 2016
When a company is going through such a major transition it is very difficult to read anything really meaningful into the results - except when they say everything is on track and the transition is going according to plan. So for me (assuming every thing is on track as they say) is that they expect 2018 (post transition) operating profit of £800m. That computes at an EPS of around 97p. They say if the $ stays at current levels (which I think it will - or maybe weaken further if UK interest rates go down & US go up) it is worth about 4p on their EPS, so in 2 years we're looking at a potential EPS of just over 100p. If we take a PE of 15, that should put the share price around 1500 - up over 50% on the current price. If they are also going to hold their dividend at 52p during the transition, which indications are that they will, then the return over the next 2.5 years for loyal shareholders could be of the order 644p per share - or 66%. Is that a good return over 2.5 years. I think so, but of course it's not certain. I suspect the share price will weaken between now and then, so I am sure there will be better buying opportunities, but I still think the sums I've just done merit a tentative buy recommendation.
Simbr
15 Jun 2016
investor day "Pearson hosts an investor day this Friday June 17th. Ahead of this, we highlight what we would like to hear from management in order to strengthen our current view from a marginal (valuation-based)... Ahead of the event, we make no changes to estimates... arguing that the 6.5% dividend yield continues to over-compensate (marginally) for the corporate risk." Panmure note out this morning on Research Tree
Hardboy
03 May 2016
Beaufort's Revised View Pearson (PSON.L, 805.0p) - BuyOn Friday, Pearson released its interim management statement for the first three months of 2016. The company in general traded in line with the expectations set out in the final year results released on 26th February 2016. During the period, the company's continuing sales were down 4% in underlying terms, primarily due to the weakness in assessments revenues in the US and UK. Revenues declined 9% at constant exchange rates, reflecting underlying revenue declines and the impact of a change in revenue model at Connections Education. Headline sales decreased 6%, with the positive impact of a strengthening US dollar sterling partly offset by the weakness of key emerging market currencies. In North America, revenues fell modestly in underlying terms. Revenues declined in the Learning Studio and Assessments, but increased in the Connections Education, where four new full-time state-wide virtual public schools are now enrolling students for the 2016-17 school year. Revenues also improved for Pearson Online Services, with good growth in course enrolments at existing programmes and the launch of new programmes for Hofstra University and University of California, Riverside. The company's adjusted operating profit and adjusted earnings per share before the cost of restructuring is expected to be between £580m and £620m and between 50p and 55p, respectively, for the full year, assuming exchange rates as of 31st December 2015. The restructuring in 2016, worth approximately £320m, is likely to generate annualised savings of nearly £350m. The company proposed an unchanged final dividend of 34p, giving a total dividend of 52p for 2015, up 2% y-o-y, and in line with the dividend policy announced earlier in the year.Our view: Pearson has made good progress with its online education business even as it shifts from being a media conglomerate to an education specialist. The restructuring cost of £320m is expected to weigh on the company's profits for the year, but expansion in the online learning business remains on track and is likely to support future growth. The company traded in line with expectation as most of its business is significantly weighted towards the second half of the calendar year. We expect the company to expand its online school services in China and India as internet access in these countries expands. Meanwhile, Pearson's Connections Education arm has already begun enrolling students to four new virtual public schools in the US, which aim to tutor youngsters outside of the public school system. Though Pearson still faces several challenges, including uncertainty around curriculum change, loss of testing contracts in the US, and volatile demand in the company's fast growing markets, we expect the company's performance to improve once the effects of the simplification plans and cost savings begin to kick in. Moreover, Pearson has announced an unchanged dividend for the year that further strengthens our faith in the company's prospects. Therefore, we maintain a Buy rating on the stock.
nk1999
29 Apr 2016
Numis PSON seems to be dividing opinions quite sharply right now...."Numis reiterated a 'reduce' rating and target of 640p for Pearson on Friday after the education publisher reported its first quarter trading update.The company reported a 4% drop in first quarter sales in underlying sales, reflecting expected weakness in assessment revenues in the UK and US which are weighted to the first half. Revenues were down 9% at constant exchange rates and headline sales declined by 6%.Pearson said it was trading in line with expectations during the period with adjusted operating profit and adjusted earnings per share before the costs of restructuring still expected to be £580-£620m and 50p-55p respectively."The first quarter is the smallest quarter for Pearson and very small in the context of the year," Numis said."We remain comfortable with a 'reduce' recommendation on Pearson, no change to estimates, we retain a blended multiples based target of 640p." "From ADVFN.
gamesinvestor
29 Apr 2016
Q1 results [link] has had a solid start to the year, in line with our expectations,” said chief executive John Fallon."""Unbelievable statement given :-"Revenues declined 9% at constant exchange rates, which the board said reflected underlying revenue declines and a change in the revenue model at Connections Education."Let's not worry about the facts -- it's a solid fall in revenue -- "so that's OK then"Games -- How much longer has he got?
mutandis13
28 Apr 2016
Potential disposal Seems somewhat surprising but PSON is looking to off-load Global English Corp that it bought just 4 years ago:[link] the time in May 2012 management said:"...Acquisition of GlobalEnglish from its current ownership group for $90m in cash, a leading provider of cloud-based, on-demand Business English learning, assessment and performance support software. It serves more than 450 corporate customers, including 20 per cent of the Forbes Global 2000 companies, including General Electric, HSBC, Tata Consultancy Services and Unilever. In 2011 GlobalEnglish generated revenues of approximately $42m. Pearson will be expensing integration costs relating to GlobalEnglish in 2012 and expects the acquisition to enhance adjusted EPS and to generate a return on invested capital above Pearson's weighted average cost of capital from 2013, its first full year..."
Hardboy
29 Feb 2016
Beaufort's view: Pearson (PSON.L, 836.0p) - BuyOn Friday, Pearson declared its preliminary unaudited results for the year ended 31st December 2015. During the period, sales from continuing operations fell 2.0% y-o-y to £4.5bn, while operating profit remained broadly flat at £723m. The company incurred a pre-tax loss of £433m as compared to a profit of £255m in 2014, primarily due to the one-off costs booked for the restructuring programme. However, profit for the year jumped 75% totalled £823m, mainly led by gains from the sale of the Financial Times, the Economist Group and PowerSchool. Adjusted EPS rose 5% to 70.3p. Operating cash flow decreased by £214m to £435m due to challenging trading and disposals. Net debt decreased to £654m from £1.6bn. On the operational front, Pearson completed the sale of the Financial Times for £858m, 50% stake in The Economist Group for £469m and PowerSchool for £222m. The company proposed a final dividend of 34p, taking the total dividend to 52p, 2% higher than 2014.Our view: Pearson delivered a resilient performance in 2015 despite unfavourable exchange rate movements and challenging market conditions. The company’s growth was led by the North American region, which contributed 66% to total sales. Pearson continued its restructuring programme and completed disposal of assets. The company remains committed to shareholders, as it announced higher dividends. Meanwhile, Pearson has started working on plans initiated in January 2016 to integrate its business, reduce cost base and focus on fewer, but bigger growth opportunities. Some key actions of the strategy include combining business lines for courseware into a single product organisation, reducing exposure to large-scale direct delivery services and focus on more scalable online, virtual and blended services. Pearson expects to complete major activities by mid-2016 and generate savings of around £350m over 2016 and 2017. We believe Pearson has significant potential to enhance presence in online enhanced services by expanding product portfolio for a wider range of age groups. Furthermore, any favourable change in curriculum may improve enrolments in the UK and US colleges, positively impacting the company’s performance. In light of the above argument, we retain a Buy rating on the stock.
II Editor
25 Jan 2016
NEW ARTICLE: Chart of the week: Time to play the Shell game? " With crude prices seemingly in freefall and bullish sentiment towards that market in extreme bear territory, is it time to take a hard look at the oil majors?I follow the Daily Sentiment Index (DSI), which is a proprietary survey of professional ..."[link]
