FTSE 100 movers: Investors happy with Pearson restructuring

The FTSE 100 recovered somewhat from the sell-off earlier in the week, with the blue chip market up 80.81 points (1.42%) mid-afternoon Thursday to 5,754.39.

Pearson led the market despite warning over profits and saying it will hold its dividend, as investors welcomed the company’s new restructuring programme.

The education publisher said it now expects to report adjusted operating profit of approximately £720m and earnings per share of between 69p and 70p for 2015. This is below forecasts and down from the group’s previous guidance of around the bottom end of 70p to 75p.

However, the group said it would carry out a £320m restructuring this year, which it expects to generate annualised savings of around £350m, with approximately £250m of savings in 2016 and a further £100m of savings in 2017. The programme will lead to 4,000 job cuts, or around 10% of its workforce and the company said it plans to complete the majority of the restructuring plan by the half year and all of if by the end of the year.

As metal prices rebounded after a large sell-off yesterday, blue chip mining companies followed suit, with Glencore leading the charge, up over 7.5%. Copper prices saw one of the biggest rebounds, with prices up 0.77%, with BHP Billiton and Anglo American also lifted.

Royal Mail delivered the goods in a strong Christmas period, with UK parcel volumes in December 6% better than the year before, and said it was on track to snip UK parcel costs by at least 1% for the full year.

This festive surge means that for the nine months to 27 December UK parcel volumes were up 4%, better than expected and offsetting a 3% decline in letters volumes. Parcel volumes at the Europe-focused GLS rose by 11%, increasing management confidence that margins will remain steady for the full year. Group revenue for the nine months was reported to be up 1%, up from the flat number reported at the half-year stage in November.

Compass Group was one of the biggest fallers of the day after the company went ex-dividend with a final dividend of 19.6p per share. In November, the catering firm posted a 5.8% rise in underlying revenue and a small increase in pre-tax profit for the year to the end of September thanks to continued growth in North America and a strong recovery in its European and Japanese businesses.

Revenue came in at £17.8bn, while pre-tax profit rose 1.3% to £1.16bn. Operating profit increased to £1.26bn from £1.21bn and the group declared a final dividend of 19.6p per share, bringing the total dividend for the year to 29.4p, up from 26.5p the previous year.

FTSE 100 - Risers

Pearson (PSON) 751.00p 14.22%
Glencore (GLEN) 76.57p 7.54%
BHP Billiton (BLT) 618.80p 6.52%
Anglo American (AAL) 233.50p 5.63%
Rio Tinto (RIO) 1,644.50p 4.25%
Antofagasta (ANTO) 360.70p 4.22%
Royal Mail (RMG) 435.90p 3.42%
Admiral Group (ADM) 1,671.00p 3.21%
Fresnillo (FRES) 661.00p 3.20%
Aberdeen Asset Management (ADN) 223.20p 3.09%

FTSE 100 - Fallers

Compass Group (CPG) 1,087.00p -4.14%
SSE (SSE) 1,350.00p -2.53%
DCC (DCC) 4,872.00p -2.03%
BAE Systems (BA.) 480.90p -1.86%
Sports Direct International (SPD) 397.10p -1.68%
Berkeley Group Holdings (The) (BKG) 3,412.00p -1.59%
Taylor Wimpey (TW.) 177.10p -1.39%
Sky (SKY) 1,009.00p -1.27%
Hikma Pharmaceuticals (HIK) 1,901.00p -1.09%
Inmarsat (ISAT) 1,020.00p -0.97%