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Full year outlook reiterated · At this early stage, Pearson sees good trading momentum in North America, International and the FT Group offsetting weakness in Professional Education and Penguin. · Pearson reiterates full year outlook of growth in sales and operating profits at constant exchange rates, with margins reflecting acquisition integration costs and the FTSE sale. Interim dividend raised by 7% to 15p per share.
PEARSON 2012 INTERIM RESULTS (unaudited) Sales up 6% to £2.6bn* · Strong growth in Education (up 9%) and the FT Group (up 7%). · Penguin sales 4% lower on phasing of publishing schedule and continued industry change. First-half operating profit lower, as expected, at £188m (2011: £208m) · Education profits up 6% on growth in North America (up 30%) and International (up 17%). · Professional profits £17m lower. New funding criteria for 16-18 year old apprenticeships result in sharp decline in volumes; UK training business reshaped. · Sale of FTSE International reduces first-half operating profit by £10m; excluding FTSE, FT Group profits level in spite of increased restructuring charge. · Penguin profits lower at £22m (H1 2011: £42m) on drop-through from lower first-half sales; stronger publishing schedule in H2. Rapid growth in digital and services businesses and developing markets · Sales up approximately 20% in developing markets (headline growth) · Education digital platform registrations up 30%; FT digital subscriptions up 31% and now exceed print circulation; Penguin ebook revenues up 33% and now almost 20% of Penguin's revenues. · Revenues from digital and services to exceed traditional publishing businesses in 2012.
http://www.investegate.co.uk/Article.aspx?id=201207270700076436I
Pearson will be reflecting the integration costs relating to Author Solutions in its 2012 accounts and expects the acquisition to enhance adjusted earnings per share and to generate a return on invested capital above Pearson's weighted average cost of capital from 2013, the first full year of ownership. Author Solutions will be integrated into Penguin's back office and technology infrastructure but will continue to be run as a separate business.
Penguin Books, the famous book publishing arm of Pearson Group, is to beef up its presence in the self-publishing market with the acquisition of Author Solutons. The Financial Times publisher is paying $116m in cash to prise Author Solutions away from Bertram Capital. Author Solutions claims to be the world's leading provider of professional self-publishing services, having given around 150,000 authors a route to market. "The acquisition gives Penguin a leading position in this fast-growing segment of the publishing industry and brings significant opportunity for the two companies to collaborate," the Pearson statement said. Penguin will gain access to Author Solutions' expertise in online marketing, consumer analytics, professional services and user-generated content while the US company will benefit from Penguin's design, editorial and sales skills, and its strong international presence. In 2011 Author Solutions generated revenues of around $100m, and has been growing at an average annual rate of 12% over the past three years. Its business is split broadly evenly across three key areas: publishing, marketing and distribution services, with revenues generated primarily from services to authors.
21st June Goldman Sachs reiterates its BUY recommendation for Pearson with a new price target of 1,480.00 22nd June Espirito Santo Execution Noble reiterates its BUY recommendation for Pearson maintaining a price target of 1,650.00 P.S. Here's a couple of links about SCLP, one of the hottest stocks at the moment: http://www.euroinvestor.com/community/discussionthread.aspx?threadid=252803 http://www.euroinvestor.com/community/discussionthread.aspx?threadid=253089
Pearson Sell 22-May-12 £34,624.50 Robin Freestone 3,029 @ 1,143.10p Pearson Sell 22-May-12 £16,449.21 Will Ethridge 1,439 @ 1,143.10p
Pearson Sell 22-May-12 £417,894.49 Marjorie Scardino 36,558 @ 1,143.10p
Pearson Buy 15-May-12 £31,260.18 Will Ethridge 2,691 @ 1,161.66p
Robin Freestone, Financial Director of FTSE 100 publishing giant Pearson, has added another 8,560 shares to his already sizeable stake. Freestone bought the shares on May 15th at 1,168p each for a total of £99,981 in a transaction that takes his total number of shares to 367,649. He made the purchase just one day before the company announced its acquisition of Utah-based IT examining business Certiport from private equity firm Spire Capital Partners, expanding its professional testing business, Pearson VUE.
Positive Points: Trading is currently in line with prior expectations, with progress for the full year 2012 expected. Pearson enjoys strong global market positions. It is both the largest education company and the largest book publisher in the world. Pearson has over recent years made acquisitions in Brazil, China, South Africa, Nigeria and India. The board has previously highlighted that it was “benefiting from recent portfolio changes, using the proceeds from disposals to invest in fast-growing businesses in developing economies and digital services.” The group's dividend policy remains progressive. Pearson has declared a dividend increase above the rate of inflation for 20 consecutive years.
Negative Points: Although overall progress is expected, reduced profitability in the first half has been flagged. With management having regularly increased earning guidance over the last year or so, expectations now run high prior to the company updating. Uncertainty over potential national and local government spending cuts in the US continues to cast a shadow over the group's Education business. The weak state of the physical retail book market is a risk to the publishing industry. Despite previous outperformance, Penguin is now only expected to perform in line with the broader industry. The outlook for advertising markets, (for the Financial Times) remains subject to macro-economic conditions. Currency volatility can work both for and against the company. With the group generating approximately 60% of its sales in the US, the movement between the pound and the dollar remains significant
Financial Highlights: Sales increased by 11% at constant exchange rates to £1.16 billion, providing an underlying increase of 3% and a headline increase of 12%.
First quarter update: The group is currently trading in line with expectations outlined at its late February full year results. Management continues to expect the company to achieve growth in sales and operating profits for the year as a whole. However, as always, group profits are heavily weighted to the second half and, as a result of the phasing of revenues, organic investment and restructuring, and the sale of a stake in FTSE International, management expects first-half operating profits to be lower in 2012 than in 2011. In addition, the board again highlighted a strong balance sheet, providing approximately £1 billion potentially available to invest in bolt-on acquisitions. Furthermore, management is proposing a final dividend of 28.0 pence, giving a total dividend for 2011 of 42.0 pence, up 9%.
Pearson is one of the world's major publishing groups, with a series of publishing brands (Penguin, Dorling Kindersley, the Financial Times, Prentice Hall, Scott Foresman, Longman and many others). The conglomerate is focused tightly on three core businesses: 1) Education 2) The Financial Times Group 3) Penguin Consumer Books. The group operates from 60 countries and has over 30,000 employees.
Financial Times owner and educational publisher Pearson (PSON) has so far proved to be a post Credit Crunch outperformer, managing to dodge the bullets of the volatility in the finance zone, as well as austerity measures. Indeed, even more than a cursory glance at the newsflow from the group in recent months will reveal that it has made quite a habit of upping its profits guidance. While it may be too much to expect another guidance hike on this occasion, it will be interesting to see whether the strong finish to 2011 has been maintained
latest edition yesterday on iii: http://www.iii.co.uk/tv/episode/pearson-pson
Nomura has maintained its reduce rating and 1,130p target price on Pearson, despite the publishing giant raising earnings guidance on Thursday. According to Nomura, "The organic growth rate we think is unlikely to much exceed 1% for FY11 (vs. our current 2% forecast), and tough conditions in North American education owing to budget shortages are likely to persist into 2012 and so organic growth in 2012 is likely to be flat to slightly down, in our view." The broker maintains its negative view on the stock, noting that the valuation is high at a price-to-earnings (FY12E) multiple of 14.6
Marjorie Scardino, Chief Executive of Financial Times publisher Pearson, has marked her fifteenth anniversary in the role with the purchase of 374 American Depository Receipts (ADRs). ADRs represent the ownership of shares in a non-US company. The purchase was made as part the firm's employee stock purchase plan, which gives employees the opportunity to purchase ordinary shares in Pearson at a discount. According to the stock exchange statement, Scardino paid $16.04 per share.
The Times’s Tempus column looks at Pearson, best known as the publisher of the Financial Times but which makes 80% of its earnings from education publishing. It is also the owner of the Penguin book publishing brand. Yesterday Pearson announced the sale of its 50% stake in FTSE International, the index maker for equities, bonds and other financial instruments, for £450m to its partner the London Stock Exchange (LSE). With a further £450m in the war chest and a track record of buying wisely, Tempus says this is a “hold but buy on weakness”. Interestingly, the Independent’s Sharewatch column has a look at the other side of the FTSE International trade: the London Stock Exchange. By gaining total control of the indexing business Sharewatch argues LSE’s boss Xavier Rolet has made the group more attractive (and expensive) for a new buyer. The stock exchange market is dominated by two groups: Deutsche Bourse/NYSE and Nasdaq but consolidation is coming, driven by a fragmented market in the far east.
Marjorie Scardinom, chief executive of Pearson, has made multiple sales of her stake in the firm on the same day it announced plans to sell its 50% stake in FTSE International to the London Stock Exchange. Scardinom, 64, sold 32,960 at 1,147.00p each, 12,040 at 1,140.59p, and 5,000 at 1,147.49p for a total of £572,752. She now holds 1,346,244 shares, equivalent to a 0.165% stake in the firm. Pearson, which owns the Financial Times and Penguin books, will receive £450m for its stake in FTSE. Pearson expects that FTSE will make a total post-tax contribution to 2011 adjusted earnings of around £18m.
Marjorie Scardino, Pearson's chief executive, said: "FTSE is a bellwether of global financial markets and a world-class business. We have enjoyed supporting the company's excellent and highly professional team to build the business. Proud as we are of that long association, FTSE's strategy is different from our own. We wish it every success as we continue to build our digital business information services around the Financial Times. "For Pearson, the transaction further strengthens our financial position at a time of significant macroeconomic turbulence. We are freeing up capital for continued investment in a proven strategy: becoming more digital, more international and more service-oriented in education, business information and consumer publishing."
PEARSON TO SELL 50% STAKE IN FTSE INTERNATIONAL LIMITED TO THE LONDON STOCK EXCHANGE FOR £450 MILLION Pearson is today announcing that it has agreed to sell its 50% stake in FTSE International Limited (FTSE) to the London Stock Exchange Group plc for £450 million in cash. FTSE is a world-leader in the creation and management of more than 200,000 equity, bond and alternative asset class indices. With offices in London, Frankfurt, Hong Kong, Beijing, Shanghai, Madrid, Milan, Mumbai, Paris, New York, San Francisco, Sydney and Tokyo, FTSE works with partners and clients in 80 countries worldwide. Pearson and London Stock Exchange Group currently each own 50% of FTSE. Under the terms of the agreement, London Stock Exchange Group will acquire from Pearson the 50% of FTSE that it does not own and continue to use the FTSE name. The transaction is expected to close by the first quarter of 2012. In 2010, FTSE reported total revenues of £98.5 million and total EBITDA of £40 million. At 31 December 2010, FTSE had gross assets of £100.8m. Pearson expects FTSE to make a total post-tax contribution to Pearson's adjusted earnings of approximately £18 million or 2.2p per share in 2011. The transaction follows the sale of Pearson's stake in Interactive Data last year for $2bn. It marks Pearson's exit from companies that are primarily providers of financial data and strengthens the FT Group's focus on global business news, analysis and intelligence, increasingly delivered through subscription models and digital channels. Pearson intends to use the proceeds of the sale to support and accelerate its strategy, investing in its businesses both organically and through acquisitions of companies with complementary content, technology and geographic exposure. In recent years Pearson's organic investments have enabled it to gain share in many of its markets. The company has also made a series of bolt-on acquisitions (including vocational training companies in the UK, global business intelligence through Mergermarket, universities in South Africa, online learning businesses in North America, language schools in China and school systems in Brazil) which have rapidly enhanced Pearson's earnings and return on invested capital.
http://www.investegate.co.uk/Article.aspx?id=201112120700117625T
John Fallon, Chief Executive of Pearson's International education business, said: "We are already helping to meet the huge demand in China to learn English by teaching growing numbers of professionals and younger children. This acquisition gives us the opportunity to help high school graduates gain the English qualifications they need to progress to university and achieve their own personal goals. Through organic investment and complementary acquisitions, we're learning a lot about the very significant growth opportunities we see in China and about the value of combining our content and technology with high-quality school networks. We are impressed by Global Education's commitment to its students and working together we can enhance further the quality of the teaching. It also significantly extends our scale, geographic breadth and range of education in the fastest-growing English language teaching market in the world."