Testing is not just for Covid

Pearson released a decent Q3 trading update thanks to the very strong dynamism in Pearson VUE and PTE sale offsetting the Higher Education division which continues to suffer. This publication was welcomed by the markets due to the upwards revision to the guidance.

H1 23: Robust results amid AI concerns

Pearson delivered decent results in H1 23 with consensus-beating revenue and operating profit in line. (Generative) Artificial Intelligence was at the heart of this earnings release but for the moment there is no materiality in one sense or the other. The group reaffirmed its guidance for FY23 and its mid-term outlook.

A Q1 23 full of positive surprises/ Chegg shock

Following a good Q1 23 trading update, Pearson reaffirmed its guidance and announced a share buyback programme of £350m starting in H2 23. On May, 2 Pearson was rocked by negative inferences from GPTs on Chegg’s business

Pearson, the threat of declining HE revenues overshadows the good FY22 results.

Pearson’s stock is down 2% after the FY22 report. Profits posted an increase although Higher Education declined. The FY dividend was raised. The share buy-back programme of £350m in FY22 went smoothly but was not exceeded unlike for many of the peers.

Q3 22: Back-to-school in (almost) full force

Pearson is up as much as +10% today after issuing a reassuring 9-month 2022 trading update, stating that it is “confident of being able to navigate the challenging macro-economic environment”. The FY22e guidance was re-affirmed. After FY21, Q1 22, and H1 22 updates, this is the fourth publication that has been acclaimed by investors, giving increasing credibility to the group’s digital transformation.

The digital strategy is paying off

Pearson was up as much as 12% today after reporting better-than-expected H1 22 results. The company said that it will meet its FY25 guidance two years in advance, i.e. in FY23, thanks to £100m in cost savings identified (synergies and efficiencies from the recent reorganisation). Again, a very pleasant surprise.

Solid Q1 22 paints a rosy picture for the full-year and beyond

Pearson’s stock is up 3% following an encouraging Q1 22 trading update in which the company reaffirmed its guidance and announced a promising acquisition.

Pearson boosts investor morale with a buy-back and an upbeat outlook

Pearson’s stock is up 12% after the company confirmed its recent FY21 estimates and raised its FY dividend. Investors also welcomed an unexpected £350m share buy-back programme for FY22e.

A good run in FY21 despite some setbacks

Pearson issued a very satisfactory trading update (FY21 unaudited figures), highlighting a strong top- and bottom-line performance, ahead of expectations, as well as a robust financial position. Although Higher Education continued to decline, it did so at a slower rate than anticipated.

Q3 21 trading update: good but not great

Pearson shares are down 12% this morning following the publication of the group’s 9-month trading update. The drop in Higher Education has dampened investors’ confidence.

Lukewarm H1 21 results

Pearson published satisfactory H1 results, with revenues and adjusted OP above expectations. However, as international markets are reopening more slowly than anticipated due to new COVID-19 variants, the group left its FY21e guidance unchanged. The strategic review of international courseware local publishing businesses launched in March is now largely complete.

The digital strategy is starting to bear fruit

Pearson published an encouraging Q1 21 trading update, with revenues up 5% organically despite tough comparisons. The FY21e guidance remains unchanged.

New year, new reorganisation, fed up

Pearson confirmed its recent FY20 estimates (see our Latest, 20/01/2021), reporting in line figures (-10% organic growth, adjusted OP: £313m, adjusted EPS: 28.7p). Final dividend is unchanged at 13.5p. Positive outlook: Despite a tough FY20, the group forecasts a return to revenue growth from Q2 21 and adjusted OP to be in line with current market expectations. Pearson also announced plans to cut office space and a new reorganisation into five divisions in FY21e at a cost of £40-70m.

FY20 in line, surfing on the wave of online learning

Pearson’s 2020 trading update is in line with a 10% organic sales decline and adjusted operating profit in the range of £310-315m (AV at £309m). Global Online Learning (+30% in Q4) pulled the group due to the wave of distance learning. The pandemic still clouds visibility.

In line with expectations but still high uncertainties ahead

Pearson’s 9-month trading update highlighted that the rising digital activities were unable to offset the test centre and school closures linked to COVID-19. The group’s solid financial position remains a positive point to retain. We are likely to raise our forecasts considering our below average expectations but expect to reiterate our cautious view on the stock.

Allenby Capital: Mirriad Advertising plc: Update

Mirriad Advertising plc (MIRI.L) is a leader in virtual product placement (VPP) and in-content advertising technology and services, dynamically inserting brands and products into video content. It provides new revenue opportunities for content producers/media companies and is proven with consumers to be significantly more effective and less intrusive than traditional formats. After several years of heavy investment, Mirriad is moving from market building to a growth phase. This should accelerate

The Joy of Techs - Cavendish Technology quarterly sector note

£23.3bn in enterprise value has been returned to AIM technology shareholders over the past six years in the form of 51 public to private takeouts, including 10 in 2023 alone with the takeovers of Smoove* and Tribal announced in early October. With UK valuations appearing cheap and looking more attractive to potential acquirers, we take a moment to reflect on the trends of corporate and private equity bidders targeting AIM-listed technology companies going back to 2017, through the uncertainties

Team Internet Group - Diversity delivering resilience

Team Internet’s results for the nine months to 30 September 2023 (9M23) showed good, continued progress, with revenue, adjusted EBITDA and adjusted EPS growing 16%, 11% and 28% y-o-y. Online Presence continued its return to form, with 20% growth over the period. While the weak advertising market and a strong comparative period was reflected in a moderation in growth in Online Marketing (15%), this still implies outperformance of the overall market. Management expects full year results to be at l

Team Internet Group - Name change shows clear strategic focus

Team Internet, formerly CentralNic Group, is a diversified UK software company operating through two businesses, Online Presence (internet domain purchasing) and Online Marketing (monetising online traffic). The group marked its name change at a recent capital markets day, where it discussed its evolution from a domain specialist into a broader online platform enabler, facilitating connections between consumers and businesses. Since starting Online Marketing in 2019, the division has become the

Morning Note – 7 November 2023

Tremor - Q3 EBITDA +4% ahead, new $20m buyback planned

Tremor has announced Q3 net revenue growth of +18% yoy to $76.6m, Q3 adjusted EBITDA +4% ahead of consensus, and plans to buy back an additional $20m of shares. Q3 net revenue is in line with Q3 consensus of $76.5m, with the Programmatic division driving the group with net revenue growth of +23% yoy to $74.2m. After successfully realising $65m of annualised synergies from the Amobee acquisition at Q2 23 results, strong cost control has delivered Q3 adjusted EBITDA of $21.3m, which is +4% ahead o

Bloomsbury Publishing - Quality content driving demand

With H124 revenue of £136.7m (+11% y-o-y), Bloomsbury is on track to meet FY24 expectations, with a particularly good H1 from Consumer and within that, from the children's list, where sales of Sarah J Maas titles were up by 79% y-o-y. Momentum appears likely to be sustained in H2 as her next book is set for publication in January. Non-consumer growth was more muted, against tough comparatives. It is here that Bloomsbury stands to benefit most from the shift to digital, notably in the US school a

PROGRESSIVE: STV Group: Weak economy, strategy on track

News that economic pressures are impacting on STV’s trading is perhaps not surprising; we reduce estimates in line with updated guidance. The update underlines the value of STV’s ongoing diversification across Digital and Studios, with continued strategic progress in these areas. The group financial position remains sound, valuation remains modest even on lower estimates, and we continue to expect a return to good overall growth, driven by Digital and Studios, once the UK economy stabilises.

Eagle Eye+ (EYE, House Stock at 495p) - The smooth flight continues - FY24F on track

Wilmington PLC - Final results

The July full year trading update showed that FY22 has been a good year for Wilmington with a full year outcome ahead of expectations. The final results did not disappoint with the added benefit of a final dividend well ahead of expectations (+37% YoY) as a clear signal of Board confidence in the outlook.

M&C Saatchi - Margin momentum into H223

M&C Saatchi’s (M&C) H123 results reflect the more challenging agency trading environment, with revenue and operating margin both dipping in the period. Management’s global efficiency programme, implemented in Q1, achieved £0.5m of costs savings in H123 and is expected to deliver annualised savings of £3.8m in FY23, with a target of £10m by end-FY24. The leadership structure has been simplified and M&C continues to invest in its focused specialisms to drive revenue growth. Management remains caut

4imprint Group - Further progress in Q323

4imprint’s Q323 trading update indicated further good growth, albeit moderating against comparatives getting tougher as the year progresses. Full year revenue guidance is maintained at ‘slightly above’ $1.3bn, with continuing high returns on marketing spend prompting a $5m uplift in PBT guidance to ‘not less than $130m’. 4imprint’s underlying markets reflect US corporate economic health, with any downside mitigated by the prospect of carrying on building market share as less well-funded firms st

Team Internet Group (TIG LN) - 9M2023 results

Team Internet delivered 16% revenue growth, well ahead of peers. Online Presence grew faster than Online Marketing as the popularity of alternative domains continued to grow and whilst the digital advertising market remained weak.

Headwinds persist, yet green-shoots emerge

Headline trading to 23rd April was in-line with expectations and highlights continuation of existing trends, with weak industry-wide digital advertising spend partially offset by resilient performance in Print. Group revenues fell 6% y/y, with Digital down -15%. In Digital, alongside the weaker advertising spend backdrop, a shift by Facebook towards short-form video/ reels and away from digital news has impacted traffic referrals to Reach we continue to see some muted structural risk to traffic

Brave Bison - Underlying Performance Reassuringly In-line

Brave Bison has released its interim results for the period ending June 2023. The update shows the SocialChain integration has been materially completed, with synergies mostly realised and new client wins taking place as a combined business. Gross revenue increased 15% YoY to £16.9m and net revenue increased 23% to £10m, both driven primarily by the new contribution from SocialChain. Adj EBITDA increased by 20% to £1.9m and Adj PBT increased 16% to £1.5m, both in-line with expectations. We have