LK Hyman
18 Jan 2017
Re: No surprise Punilux,"why is Fallon the number one baddy?"I heard him some time ago on Radio 4 (I think it was) and he was deeply uninspiring. I felt then that, if he were applying for a job on the FT, he'd never get one against the likes of Kellaway, Ganesh, Guthrie, Tett and Jacobs (PSON owned the FT at that time).So, why in the name of all that's holy should he be the capo di tutti capi as CEO of the owner of the FT group? That was my logic for thinking that he wasn't and isn't up to scratch, for what's it's worth.LKH on the flybridge I see that I attributed munter status to PSON some time back
gamesinvestor
18 Jan 2017
Re: Re: "Can you please explain ?"Akis, The company has over £5bn in intangible assets -- with a 30% drop in sales, it looks like these are becoming less and less valuable.Property and plant are negligible at around £320MThey have borrowings of over £2BnOperating cash flow dropped to £211M last year so it's not paying it's way.That's before you look at the pension.Loos like a pack of cards to Moi!!Games -- But then again I could be wide of the mark and the intangibles will come to some use supporting the balance sheet better -- so far it's one warning after another for years. Personally I'd be collecting what cash I had left in this if I was in.
gamesinvestor
18 Jan 2017
Re: No surprise "Well there goes my £6 triggered this morning. "Fabius, indeed, I do apologise for not getting it quite right. It doesn't look like Pearson is able to command the margins online it once did in physical media. This is almost the counter position of other companies selling on line.It has to be down to poor management (I always thought Fallon looked like the old TV repair man that used to visit my grandma's house).This following statement looks like boxxocks to me :-""""The North American higher education courseware market was weaker than the company expected, as net revenues fell 30% during the final quarter of 2016 resulting in an 18% decline for the year. The company believes that 2% of this decline was driven by lower enrolment, particularly in Community College and amongst older students, about 3-4% of the decline was due to an impact from rental in the secondary market, and about 12% was due to an inventory correction in the channel.""""A 30% decline means you either have lost a core of your market, or the North American's are all playing Pokemon.Maybe you should switch to Nintendo?Not sure where this is going now.Nick Train must be well miffed, having apologised to his clients at Finsbury Growth for getting this wrong. When it last tanked, he loaded up again.Looks like he'll be going cap in hand to his clients for forgiveness.Games
Akis1999
18 Jan 2017
Re: Re: gamesinvestor ,Just visiting here . I read backwards and seen the warnings coming through since August last year (well just on this page of posts).you said "This could easily go bust, with borrowings of over £2Bn and profits that went negative last year."There are a lot of liabilities, current and non current. Which line did you concentrate on to make that statement ? I usually look at net assets excluding intangibles and interest payments which indicates servicing their loans or bonds. Can you please explain ?
cashpharma
18 Jan 2017
Re: No surprise I bet the strategy looked superb on the powerpoint slides.Further proof that directors of a major plc are often epic blunderers.
Fabius1
18 Jan 2017
Re: No surprise Games.Well there goes my £6 triggered this morning. Now let's see if your £5 makes the grade...F122/10/15'GamesWell I reckon £6 is on the cards but that feels generous compared with your red ink tip of £5.F1'
Punilux
18 Jan 2017
Re: No surprise I might be slow on the uptake but why is Fallon the number one baddy? This is all down to Scardino's ridiculous rule when she was loading debt on the company in an attempt to boost that year's earnings. As soon as the tide turned Pearson were left with a load of companies with tiny turnover and massive debt. Once the crown jewels went there is no way of knowing how the liabilities would be met in future.
Jack_Walsh
18 Jan 2017
I'm in A perfect addition for my high-risk portfolio! A snip at £6.00!Not that confident, though - so only £5k
Hardboy
18 Jan 2017
Re: No surprise I think the BoD should face a vote of no confidence. How they can say our projections for 2018 no longer apply, and by the way we aren't going to say what we think it will now be is pretty lame.
LK Hyman
18 Jan 2017
No surprise How are the mighty fallen, eh? One hesitates to quote from one's own posts [acksherly no, one doesn't] but this was clearly a car crash in slow motion visible almost exactly a year ago:"Jonathan Guthrie (Lombard in the FT) for whom I have the highest regard has once again stuck the boot in hard against Fallon today, his erstwhile ultimate boss as CEO of Pearson, until Pearson sold the FT."Jonathan Guthrie is now head of Lex in the FT while Fallon ought to walk the plank.LKH on the flybridge
numberbiter
15 Jan 2017
Re: Telegraph- Questor Avoid is the right answer, The company has sold profitable businesses to prop up failing ones. With Trump insisting on US companies providing for the US market and Pearson still having a relatively high level of debt despite selling the FT, it is very unlikely the dividend will be held for much longer.
nk1999
15 Jan 2017
Telegraph- Questor "Keep Pearson book closed for now as it struggles to adapt to digital age: Introducing mandatory annual maths and reading tests, plus a massive increase in the federal education budget, went a long way to validating the former Pearson Chief’s decision to focus the jumbled conglomerate on education. Times have moved on, as have Dame Marje and Dubya. Would that John Fallon, today’s Boss of Pearson, could bank on a similar boost from the newest White House inhabitant. Pearson derives 63% of sales from the U.S. The strong dollar gave it a lift last autumn, but flattered to deceive as underlying sales in the region slid 9% in the first nine months of 2016. Analysts are concerned that Generation Rent has come to college textbooks. Students that don’t care if they never own a home or a car have discovered they can also rent instead of buying $200 (£164) books. Pearson has virtually finished reducing its 40,000-strong headcount by 4,000 and Fallon has reaffirmed operating profit guidance for 2016 of £580 million to £620 million. He has staked everything on hitting £800 million in 2018. The central irony to Pearson’s investment case is that it sold its media businesses, the Financial Times and half-share in the Economist, to focus on education, but is now finding it tough to convince customers they need to keep paying when so many study aids can be found for free online. The stock has ticked up marginally from 786p where it stood when Questor last took a look in early December and yields 6%. But for investors that dropped Pearson as it has struggled over the past two years, it is too early to re-enrol on the share register. Avoid for now. Pearson at 817p. Questor says “Avoid”.
numberbiter
15 Dec 2016
Re: Struggling In response to your question, there is no share that is risk free. However, companies that have no debt or little debt carry a very low risk long term. The justification for this statement is that the only thing that forces companies into liquidation is when they lose bank support and cannot pay their bills.The problem with Pearson is that their debt continually increases, which makes their bankers nervous. They then sell prize assets (such as the Financial Times) which substantially reduces their debt, but then it creeps up again. It is difficult to see what they have left that is worth selling, so we might be heading for a crisis point. The next set of accounts will be the key (to December 31 2016); if net debt is up again you can expect a significant fall in the share price.
nk1999
10 Dec 2016
Telegraph- Questor From 07/12:"Drop out of Pearson while you have the chance, despite 50% share price fall: Autumn’s rally in the dollar gave shares in Pearson a lift but longer-term investors may decide to use this as a chance to get out while the going is vaguely good. Management has already acknowledged that a great run of increased dividends is coming to an end and trends in the U.S. higher education market in particular suggest that life can only get tougher for the academic publisher. A £350 million cost-saving programme is a key plank here but the problem is the sinking top line. First-half sales fell by 7% on an underlying basis, handicapped by a slowdown in the number of students enrolling for higher education in the U.S. and lower book sales and rentals. The latter issue is perhaps the biggest threat to Pearson, along with “open educational resources” that allow universities to make best-of-breed educational materials freely available. Pearson has already issued a couple of profit warnings, and rivals have followed suit. Earnings cover for the dividend is already thin, at just over one (when two is ideal), and any further profit slips could put the 6.7% yield at risk. The autumn rally provides a chance to get out of what could be a structurally challenged company. Questor says “Sell”."
Hardboy
04 Dec 2016
Re: Struggling "this share is only for those who enjoy taking a risk."Tell me a share which is risk free.
