Two FTSE 350 Stocks and Their Latest Earnings: Pearson Plc and Rathbone Brothers Plc

Business overview: Pearson Plc

Pearson PLC (LON: PSON) is a British learning company, headquartered in London, the United Kingdom. The group serves private and public institutions, governments, and individual learners in various countries to provide them with education products and services like test development, processing, and scoring services and a wide range of other educational services.

Pearson Plc announced unaudited results for FY19

(Company’s filings, London Stock Exchange)

The sales plunged by £260 million to £3,869 million during the fiscal year 2019 as compared to £4,129 million in the fiscal year 2018 with portfolio changes reducing sales by £347 million and currency movements contributing to the revenue of £97 million. The revenue was flat in underlying terms, stripping out the impact of portfolio and currency movements.

The company was benefitted from restructuring by £130 million year-on-year, which contributed to the adjusted operating profit of £581 million in the fiscal year 2019 as compared to £546 million in the fiscal year 2018. The company was also benefitted from other operational factors (£19 million) and FX (£15 million) and a £25 million benefit from the adoption of IFRS 16. The company’s underlying adjusted operating profit grew by 6 per cent excluding the impact of FX and portfolio changes.

The Net interest payable was £41 million this year as compared to £24 million in the fiscal year 2018. The increase can be attributed to the adoption of IFRS 16 which led to an additional £34 million of net interest payable in 2019. The Adjusted earnings per share of the company stood at 57.8 pence in the fiscal year 2019 as compared to 70.3 pence in the fiscal year 2018.

The Operating cash flow of the company stood at £418 million in the fiscal year 2019 as compared to £513 million in the year 2018 with cash conversion ratio at 72 per cent (FY19) as compared to 94 per cent (FY18). This decrease in cash flow can be attributed to the inaccurate timing of the disposal of the US K12 courseware business, and challenging trading conditions in the US Higher Education segment.

In line with the management policy, the Board of the company proposed a final dividend of 13.5 pence during the period (2018: 13 pence), which results in an overall dividend of 19.5 pence during the period (2018: 18.5 pence) subject to shareholder approval. This shall be payable on 7th May 2020.

Pearson Plc -Stock price performance

(Source: Thomson Reuters)

While writing (as on 21st February 2020, at 10:54 AM GMT), Pearson Plc shares were trading at GBX 559.20 per share; plunged by 4.25 per cent as compared to the previous day closing price level. The company’s market capitalisation was around £4.51 billion.

Pearson Plc shares have clocked a high of GBX 951.20 (as on 29 July 2019) and a low of GBX 532.60 (as on 16 January 2020) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 41.21 per cent below the 52-week high price point and 4.99 per cent above the 52-week low price point.

At the time of writing, the stock’s volume before the market close, stood at 1,200,000. Stock's average daily traded volume for 5 days was 2,776,345.60; 30 days- 3,189,505.27 and 90 days – 2,673,561.43. The company’s stock beta (180 days) was 0.34, which makes it less volatile as against the benchmark index. It has a dividend yield of 3.25 per cent.

The stock’s average daily traded volume for 5 days plunged by 12.95 per cent as against 30 days average traded volume. At the time of writing, the shares of the company were trading below the 60-days and 200-days SMA.

In the past 1 month, Pearson Plc shares have delivered a negative return of 0.78 per cent. Also, on a YTD (Year-to-Date) time interval, the stock plunged by approximately 8.32 per cent and was down by 9.03 per cent in the last three months.

Share's RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 44.18, 49.36 and 54.63 respectively. Also, the stock’s 3-days RSI was recorded at 77.27.

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Business overview: Rathbone Brothers Plc

The UK based Rathbone Brothers Plc (LON: RAT) is engaged in the business of providing wealth management and fund administration services to the investors and institutions. Its areas of operation are categorized into two segments, which are investment management and Unit Trust. The group is significantly owned by the institutional investors, with Hargreaves Lansdown Plc, Ashmore Group Plc and Man Group Plc being the major stakeholders in the group (as per Thomson Reuters).

Rathbone Brothers announced unaudited results for FY19

(Source: Company’s filings, London Stock Exchange)

During a year of significant integration activity and economic and political uncertainty, the group's financial performance for the year to 31 December 2019 remained resilient. The company’s Statutory profit before taxation decreased to £39.7 million in the fiscal year 2019, (which covers the planned costs of £30.8 million for the purchase and assimilation of Speirs & Jeffrey) as compared to £61.3 million in the previous fiscal. The company’s Underlying profit before taxation plunged to £88.7 million in the fiscal year 2019 as against £91.6 million in the fiscal year 2018. The company’s Underlying Operating income increased by 11.6 per cent in 2019 to £348.1 million. The company’s Underlying Fee income improved by 11.5 per cent to £260.2 million in 2019 as against £233.4 million in 2018. The board has proposed a final dividend of 45 pence considering the results for the year. The company’s annual dividend increased by 6.1 per cent to 70 pence in 2019 as compared to previous year.

Rathbone Brothers Plc -Stock price performance

(Source: Thomson Reuters)

While writing (as on 21st February 2020, at 11:00 AM GMT), Rathbone Brothers Plc shares were trading at GBX 1,973.22 per share; plunged by 0.34 per cent as compared to the previous day closing price level. The company’s market capitalisation was around £1.12 billion.

Rathbone Brothers Plc shares have clocked a high of GBX 2,560.00 (as on 3rd May 2019) and a low of GBX 1,918.00 (as on 20 February 2020) in the past year. At the current price point, as quoted in the price chart, the company’s shares were trading 22.92 per cent below the 52-week high price point and 2.88 per cent above the 52-week low price point.

At the time of writing, the stock’s volume before the market close, stood at 4,670. Stock's average daily traded volume for 5 days was 23,544.80; 30 days- 31,145.83 and 90 days – 46,099.21. The company’s stock beta (180 days) was 0.70, which makes it less volatile as against the benchmark index with a dividend yield of 3.54 per cent.

The stock’s average daily traded volume for 5 days plunged by 24.40 per cent as against 30 days average traded volume. At the time of writing, the shares of the company were trading below the 30-days and 60-days SMA.

In the past 1 month, Rathbone Brothers Plc shares have delivered negative return of 1.25 per cent. Also, on a YTD (Year-to-Date) time interval, the stock plunged by approximately 7.04 per cent and was down by 5.94 per cent in the last three months.

Share's RSI (Relative Strength Index) for the 30-days, 14-days and 9-days was recorded at 43.50, 44.57 and 49.29 respectively. Also, the stock’s 3-days RSI was recorded at 69.66.

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