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Three Quick Facts: Pearson, Direct Line Insurance and Shoe Zone

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Three things you need to know in the financial markets this morning from investment writer, Tony Cross.

Pearson

Full year results from Pearson LON:PSON are out this morning, with underlying revenues off by 10%. The COVID lockdown may have bolstered online learning but it has simultaneously shuttered assessment centres. Looking ahead however the company anticipates a stronger 2021, especially once the challenging comparatives of Q1 are overcome. Pent up testing demand stands to provide further support in H2. There’s a lot of detail in the report but with the stock still below pre-COVID levels, it may be worth a closer look.

Direct Line Insurance

There was a fairly stable set of results out from Direct Line LON:DLG this morning, with the company showing no real surprises over the year. Profits have been put under a little pressure after an increase in major weather costs, but COVID has reduced claim frequency. Overall, the company notes the pandemic has had a net positive impact on the numbers, whilst the capital position remains robust. As a result of this, another meaningful dividend has been declared along with a £100m share buyback scheme.

Shoe Zone

Full year numbers from Shoe Zone LON:SHOE make for an interesting read. The company is perhaps one retailer that will continue to benefit from always having a physical presence, given the uncertainties in fitting shoes and also the weight vs price, especially at the cheaper end of the market. The pandemic has however taken a toll, with revenues falling by almost a quarter for the year to October 3rd 2020. The previous year’s £6.7m profit has slipped to a £14.6m loss, resulting in a suspension of the dividend, whilst rolling store closures over the last five months mean that a return to profitability seen as is unlikely before October 2022.

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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