Market report: Slacking Pearson finishes bottom of the FTSE class after sales tumble
With a week to go until the opening of the Rio Olympics, there were wooden spoons aplenty in the markets today as a string of disappointing results led investors to shed stocks.
Out-of-puff schoolbooks publisher Pearson was in last place on the FTSE 100 index after slumping 64p, or 6.6%, to 906p due to a 7% decline in half-year sales and 11% fall in revenues.
Boss John Fallon is trying to whip the overweight giant back into shape after years trailing the pack. He plans to rip out £350 million of costs by the end of 2017 and said nearly 3500 people will lose their jobs to achieve this. Investors will have a similar fate in mind for Fallon if he fails.
The Footsie ran out of puff after a busy week of rises, nudging up 0.4%, or 1.75 points, to 6723.14. The Olympics organising committee shunned squash for inclusion at this year’s games and there was a similar rejection today for one of its most famous fans.
Roly-poly billionaire Mike Ashley, one of England’s most promising squash players in his youth, missed out on the winner’s podium at Findel after the retailer decided not to make the tracksuit tycoon its chairman. Ashley owns nearly 30% of the group and said it will appoint an independent executive chairman instead. The shares fell 5%, or 8.5p, to 160p as investors got grumpy over the diminishing prospect of a tie-up with Sports Direct.
There was unlikely to have been many cartwheels either at cigarette filters maker Essentra after the shares slumped 20%, or 126.7p, to 499.8p. The foam and plastics manufacturer, which started life in the 1940s in the famous north-east town of Jarrow, reported single-digit falls in revenue and profits despite benefiting from the slump in sterling.
Such declines rarely trigger violent falls like that so analysts pointed the finger at chief executive Colin Day’s surprise decision to exit the group. Day, who was Reckitt Benckiser’s finance boss in a former life, hasn’t said when he’ll go but markets hate uncertainty.
Tech firm Laird was also suffering down the back straight, falling 12.26%, or 40.68p, to 291.32p, after it reported “challenges” had been found in the due diligence” of its recent 65 million acquisition of German telematics company Novero.
It said these require “greater and deeper intervention” to solve them, which led Novero into a £3.5 million half-year loss. Laird itself saw underlying profits crash 39% to £16.4 million.
