Three things you need to know in the financial markets this morning from investment writer, Tony Cross.
Educational publisher and former owner of the Financial Times, Pearson [LON:PSON] has this morning announced it will sell the remaining 25% it owns in Penguin Random House to Bertelsmann, generating proceeds of around £530m. This values PRH at $3.67bn, up a little over 3% from when Pearson sold a 22% stake in 2017. Shareholders will benefit from a buy back using just over half of the funds, with the move being in line with Pearson’s previously stated simplification strategy.
Recruitment and training group Staffline [LON:STAF] has provided a trading update this morning, noting lower than anticipated demand from customers through November, as a result of broad-based uncertainty. The key detail here however revolves around errors in last year’s accounts, which have left profits overstated by £4m, something which has resulted in the departure of the CFO. Sluggish trading and the accounting error have left the company suggesting that full year adjusted operating profits will be around £10-£12m, with a slightly cryptic hint too that certain strategic options could significantly reduce net debt in H1 2020.
Ferguson [LON:FERG] may be continuing to progress its demerger of Wolseley UK, but there may be a slight speedbump in the road looking at today’s news. The divisional CEO is stepping down to pursue an opportunity outside the company, so Ferguson is drafting in the current CEO of the Canadian business and Head of Corporate Development to take over the role on an interim basis. As an insider, this seems like the best possible outcome and the parent company says it will provide an update on the demerger in Q1 2020. Completion is still expected next year.