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According to the Gov website, the aquisition of the CBT (e-assessments) from LearnDirect has moved to phase 2 because the Competitions & Markets Authority think Pearson will be the only company capable of running a national test such as the Theory Tests. Taxpayers have already paid miliions for the mess the government created in awarding the contract to LearnDirect in the first place, and the Lloyds Group are desperate to sell it off anyway!!
Got close to breakeven and then fell back ! Darn. There have been a couple of analysts suggesting that Pearson will need to cut the dividend which is weighing on the shares. While this of course cant be discounted in the longer term if the education business in the US and beyond doesn't pick up in 2017 as planned I think there is absolutely no chance of that happening within the next 18 months at a minimum (if at all). Mr Fallon said the divi was a priority and its not as if they don't have tonnes of cash following the sale of the FT etc. The strong dollar will add a bit to earnings in the last quarter and from glancing at the book best seller charts in the US and UK PRH look to be having a great year (9 of top 10 non ficton books at Xmas!!) and they are cutting costs in the UK at least - see one of their distribution centres is being closed suggesting the synergies are working I guess the real movement will happen when full year results are out and there is more guidance for 2016
We will be sitting around £10 minimum
We will be sitting around £10 minimum
These look like they could fall to around 600. But we might get a bounce in the short term because of the large fall over the last month. Selling off FT and Economist, two internationally acclaimed brands, has degraded the company's brand power, and essentially leading it to become an education company, from one that was education/media. This might be beneficial in the long run, as it will likely allow the company to become a smaller, streamlined operation, but the market cap will have to reflect the new smaller size and thus a drop to lower share price is most likely to stay.
By xmas is my call
So if you bought in now at approx 825p, and they paid a final divi of 33p, then that would give you a 4% return on your outlay come ex-divi day....
Pearson, or John Fallon, seem determined to protect the dividend payment. Over the last however many years, Pearson's dividend payout has risen at approx 7% each year. Having already paid 18p interim, in order to match last year's payout they need to pay 33p (£270 million). If they want to sustain the 7% growth, they will need to pay 36.5p (£300 million). They recently sold FT for £844 million plus The Economist for £469 million, so they can easily afford it. The company is not losing money, but there is a slowdown in profits predicted.
Michelle McGagh on Nov 25, 2015 at 05:00 Pearson dividend ‘unsustainable’ Educational publisher Pearson’s (PSON) dividend is unsustainable, according to Berenberg. Analyst Sarah Simon reiterated her ‘sell’ recommendation and reduced the target price from 800p to 730p. The shares fell 1.1% to 807p yesterday. ‘Following management comments regarding the outlook for a number of the group’s businesses in 2016, we are reducing our estimate for 2016 earnings per shares by a further 7%,’ she said. ‘This follows a 15% reduction that we made after the group’s profit warning a few weeks ago. In our view, this makes it even more likely that the dividend will need to be reset. ‘While we understand management’s commitment to the dividend, and the fact that Pearson’s disposal programme means it can “afford” to pay, we think the company needs to rebase the payout. Sooner or later this has to happen. ‘We expect a new chairman to make that decision in early 2016, when the outlook for the year becomes clearer.’
This is great thank you -
This is great thank you.
https://www.youtube.com/watch?v=CX3-6Q0sDqY&feature=youtu.be
Think you'll be ok with that average. Looks to be pricing in the end of the world currently. You need to have confidence that they'll use the proceeds from the disposals wisely, so a large part of the investment case is around confidence in managment.
Sitting on about a 20k loss so I hope so !! Put in the last dredges of the pension at 777 - Again I don't understand the market - one of the markets worries was apparently that the divi might be cut as the yield is cuurrenly so high - fallon reiterating it is a priority to maintain should be reassuring surely - saying it can't grow 7% pa indefinitely is surely just inevitable. Sentiment appears to be really against Pearson at the minute - must be the number 1 yielding stock in the ftse without the debt issues that the other high yielders ie the miners have Anyway now averaging about 857 so fingers crossed !
My top up was made today and I'll now happily sit on these and ride the inevitable wave upwards
(Reuters) – Pearson's chief executive John Fallon said on Wednesday he considered protecting his company's dividend a top priority as the world's largest educational publisher struggles with slowdowns in most of its major markets. When considering capital allocation, "our first priority is the dividend and sustaining the dividend," Fallon said at the Morgan Stanley European Technology, Media and Telecom Conference in Barcelona. However, on the likelihood of increasing the payout he added that the company was "obviously probably not likely to see the sort of 7 percent growth that we've seen (over the past decade)". Pearson's shares fell sharply last month following a profit warning, with analysts saying investors were starting to question its entire strategy after it agreed to sell the Financial Times newspaper to focus on its education business. Fallon also said on Wednesday he couldn't rule out further restructuring at the company even though its last major rationalisation in 2013-2014 had eliminated 4,000 jobs to reduce annual costs by 200 million pounds ($303 million). "If we see opportunities to take more costs out of the business in a way that delivers a quick pay-back, we'll do it," he said. But Fallon said long-term trends point towards a recovery in the company's U.S. and British businesses in 2017. He said the company's UK business "will start to stabilise next year and then we'll see some growth." "The one caveat to put on that is we're not going to be growing with the sort of margins that we've seen in years gone by." Meanwhile the company, which sold both the Financial Times and its stake in The Economist this year, would also consider selling its 47 percent stake in book publisher Penguin Random House, but probably not until 2017, Fallon said. Bertelsmann owns the other 53 percent of PRH and has said it would consider increasing its stake.
who has bought (I'm assuming here as its in blue!!) £6miliion worth of shares at 15.29? For someone to either buy or sell that many (747,143), will that wake people up?
Thanks for that Smellyben. Your synopsis seems to make sense to me, and I've topped-up my small shareholding at 825 on the back of it. If this share is over 950 by Xmas, then I will be happy.
Good luck with investing your pension in this share. I can think of a hundred better investments at the moment but each to their own.
A bit more downside me before any talk of 10.00
950p by end of week? Are you serious?
There are no declared shorts on Pearson.
Slow rise is likely, however we will see some short covering, so a spike to 9.50 easily possible. 10p a day suits me fine
Well that would be lovely but 10% in two days is a bit ambitious ! I see a more gradual rise as more and more people realise they can get a 6 % yield plus capital gains - in fact the most bearish broker has a target of 800p but most are in the 10 to 11 pound range so I am pretty confident the rise will come in the next could months
back upto £12, but I think that we will be up near £9.50 by the end of the week.......yesterday was where the bottom was formed