MARKET REPORT: Pearson shares rise to three-year high as digital revamp pays off

MARKET REPORT: Pearson shares rise to three-year high as digital revamp pays off



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Shares in pearson rose nearly to its highest point in three years after making money from people learning English and students returning to exams.

Educational publishing house FTSE 100 gained 8.7 percent, or 77.6 pence, to 965 pence, while remaining on track to meet sales and profit expectations for the year.

The trading update sparked a rebound for Pearson, who used to be one of the UK stock market’s favorite stocks when it owned the FT and The Economist, as sales of its English language courses rose 36 percent in the three months to September.

Shares in Pearson nearly rose to three-year high as it monetized people learning English and students returning to exams

The group attributed this to an increase in global mobility as borders reopened after Covid, as well as an increase in English tests conducted in India and Australia.

Total revenue for the quarter was 7 percent higher than a year earlier. Pearson’s sales of assessments and qualifications, meanwhile, skyrocketed 12 percent as exams returned in the UK and US following the disruption caused by the pandemic.

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The group’s higher education sales took a minor hit, while plans to divest its South African operations are expected to be finalized before the end of the year. Pearson also aims to cut costs by as much as £100 million next year.

“We believe Pearson is well positioned for the future and we are confident we can cope with the challenging macroeconomic environment,” said chief executive Andy Bird.

“We are making great strides in creating a digital learning ecosystem that can serve many more people throughout their lives of learning.”

AJ Bell financial analyst Danni Hewson said Pearson is in a “good position” after the decade-long transition from academic textbooks to offering more digital products.

Rio Tinto lost 1.1p percent, or 55p, to 4750p

The FTSE 100 rose 0.6 percent, or 44.26 points, to 7013.99 and the FTSE 250 0.8 percent or 131 points added to 17337.55. UK-focused stocks got a boost as markets reacted positively to Rishi Sunak becoming prime minister after Boris Johnson pulled out of the Conservative Party leadership race on Sunday.

STOCK WATCH: Cerillion

Shares in Cerillion hit an all-time high after a bullish trading update. The billing and customer management software company said it had done “very well” in the second half of the year to the end of September, landing its largest contract to date.

As a result, Cerillion predicted full-year revenues and profits would “be ahead of market expectations” and new business would remain “buoyant.” Shares rose 8.2 percent, or 85p, to 1125p.

“Investors are clearly hoping that Sunak will stabilize the economy and the political situation, although it is difficult at this point to determine what the more difficult task is,” said AJ Bell’s Hewson.

Sunak’s triumph propelled the pound, which held steady at around $1.13, making up for most of the losses suffered after then-Chancellor Kwasi Kwarteng’s ill-fated mini-budget that sent markets into a tailspin last month.

But disappointing economic data from China weighed heavily on several Asian-focused blue-chip stocks after the country’s third-quarter GDP growth fell short of expectations.

Fears of a slowdown hit mining stocks, which rely heavily on demand from China’s resource-hungry economy. Antofagasta fell 2.2 percent, or 25.5 pence, to 1122.5 pence. Anglo-American fell 1.7 percent, or 47.5p, to 2686.5p; Fresnillo fell 2.7 percent or 19.6p to 698.4p; Rio Tinto

lost 1.1p percent, or 55p, to 4750p and Glencore fell 0.04 percent, or 0.2p, to 501.9p.

The data also hit oil prices, with the international benchmark Brent oil falling to about $92 a barrel. But the decline failed to rein in energy stocks, with Shell rising 0.04 percent or 1 pence to 2,345 pence and targeting the North Sea. Port Energy a gain of 0.2 percent, or 0.8p, to 375p. BP rose 1.2 percent or 5.55p to 470p after HSBC analysts raised their rating on the stock from “buy” to “hold.”

The London Stock Exchange Group (LSEG) rose 0.2 percent, or 16p, to 7366p after JPMorgan raised the FTSE Russell operator’s target price from 9700p to 9940p.

fund manager Jupiter fell by 5.8 percent or 5.8 pence to 94.1 pence, although it launched a £10 million share buyback program to be completed before the end of the year.


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