Sterling remains on the back foot and Pearson hopes to write a new chapter

“Sterling continues to slide, surrendering its post-election gains, after the new Conservative Government legislated to rule out an extension to the Brexit transition period which ends in a little over 12 months’ time.

“Legislation can be reversed and time will tell if this is a negotiating tactic, political ploy or a genuine commitment to going over an apparent cliff edge if a deal can’t be concluded by the end of next year.

“Weakness in the pound is helping to keep the FTSE 100, and its cohort of overseas earners, afloat after subdued trading in the US and Asia overnight.

“Private hospital provider NMC Health is recovering some of the ground lost yesterday when Muddy Waters revealed a short position and released a critical report on the company. The company reiterated forecasts and announced a buyback in an attempt to reassure panicking shareholders,” says AJ Bell Investment Director Russ Mould.

Pearson

“Publishing firm Pearson will hope to write a new chapter in its corporate history after saying chief executive John Fallon will step down next year and that it will sell its remaining 25% stake in Penguin Random House.

“With this latest exit, 2019 will have seen more than a fifth of FTSE 100 chief executives replaced this year or announcements made to change leaders in 2020.

“The one-time publisher of the Financial Times has struggled in recent years. Its central problem being that students and educational institutions have moved away from buying expensive hard copy academic textbooks.

“The group is inching towards a more digital future but, over his near seven-year tenure, Fallon has not been able to drive this change fast enough to prevent a series of profit warnings.

“An apparent recovery for the business in 2018 has fizzled out and the shares are now at a little over half the level they were when Fallon took over.

“It is probably no surprise that the market isn’t shedding too many tears over Fallon’s impending retirement and news of a capital return from the proceeds of the Penguin Random House sale should please investors.

“Given the structural problems facing the firm, his successor faces a tricky task. If they can turn Pearson into an educational publisher which is fit for the 21st century, Fallon’s work in moving the company in this direction may eventually be more warmly remembered.”

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