An international media and education company, providing educational materials, technologies, assessments and related services to teachers and students. Owner of The Financial Times and part owner (47%) of Penguin Random House. I have a holding in my income portfolio (epic code: PSON).
Pearson issued their nine months IMS today and at the same time informed the market that CFO Freestone has decided to leave the company sometime in 2015. He has been with the company for ten years and has agreed to stay until a successor is in place. Never good news when a well respected finance head decides to leave during a period of transition, even on good terms, as there will always be some uncertainty about the quality of the replacement.
For the nine months reported sales are down 6%, but flat on an underlying basis. Their Core markets showed an underlying decline of 6%, North America grew by 2% and Growth markets were flat.
The full year guidance of adjusted EPS between 62p and 67p was reiterated, so on a SP of 1136p (down 2.8% this morning) a P/E rating of 17-18 with a 2014 yield of 4.5%. On 2014 earnings this share is fully valued, but with an enticing yield and prospects of high double digit growth in 2015 if their plans in the US bear fruit. So definitely a hold, but there may be better opportunities over the next few months to accumulate if the price continues to weaken.
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