Education publisher Pearson on Tuesday kept its financial guidance intact, despite saying a key contract with Arizona State University will end next year.

Pearson said its Online Program Management partnership with ASU will end in June 2023. The UK company gave no reason for the termination of the 10-year collaboration, which saw Pearson help the university expand is online learning services.

‘The profit impact of the contract termination will be modest in 2022 and 2023 and will be offset thereafter through eliminating related costs and re-directing investment across our strategic growth opportunities,’ the company said.

Pearson stressed its financial guidance for the current financial year remains unchanged, as does its medium-term outlook.

‘We continue to expect to achieve mid-single digit group revenue [compound annual growth rate] from 2022 to 2025 and for group margins to remain relatively stable in the near term, as we invest to drive growth, improving by 2025 to mid-teens,’ the company said.

Pearson shares were down 3.2% early Tuesday, while the wider FTSE 100 index opened slightly higher.

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: up 0.4% at 7,608.19

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Hang Seng: down 2.2% at 21,050.19

Nikkei 225: closed up 0.7% at 26,985.09

S&P/ASX 200: closed up 0.6% at 7,565.20

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DJIA: closed down 39.54 points, or 0.1%, at 34,411.69

S&P 500: closed marginally lower, down 0.90 of a point at 4,391.69

Nasdaq Composite: closed down 0.1% at 13,332.36

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EUR: down at $1.0783 ($1.0797)

GBP: down at $1.3007 ($1.3060)

USD: up at JP¥128.21 (JP¥125.91)

GOLD: up at $1,975.00 per ounce ($1,964.54)

OIL (Brent): up at $112.67 a barrel ($107.52)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Tuesday’s key economic events still to come

0830 EDT US new residential construction

1630 EDT US API weekly statistical bulletin

0855 EDT US Johnson Redbook retail sales index

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UK Prime Minister Boris Johnson is on Tuesday expected to make a ‘full-throated apology’ to members of Parliament after he was fined by police for attending a birthday bash in breach of Covid rules. But is it reported he will stop short of addressing allegations he instigated a separate lockdown leaving do, as he attempts to convince politicians there are bigger issues to focus on than the ’partygate’ saga. It is thought he will focus on the crisis in Ukraine, along with the UK government’s controversial new policy on sending ‘illegal’ migrants to Rwanda. Last week the PM was fined by the Metropolitan Police for attending a birthday bash thrown in his honour in the Cabinet room in June 2020, while coronavirus restrictions were in place. He was then accused over the weekend of not only attending a leaving party for his former communications chief Lee Cain on November 13 2020, but instigating the do. Downing Street declined to comment on the claims.

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St Louis Federal Reserve President James Bullard said a 75 basis point US interest rate hike should not be ruled out, Bloomberg reported. Bullard, in a virtual conference held by the Council on Foreign Relations think tank, said the Fed would need to move decisively as it eyes lifting interest rates to around 3.5% this year. Bullard noted a hike of more than 50 basis points at a single policy meeting is not his ‘base case at this point’, however. ‘I wouldn’t rule it out, but it is not my base case here,’ he explained. The next meeting of the policy-making Federal Open Market Committee is on May 4.

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Japan industrial production in February grew on both a monthly and annual basis, reversing trends seen the month prior, figures from the Ministry of Economy, Trade & Industry showed. Industrial production rose 2.0% in February on a monthly basis, exceeding FXStreet-cited market expectations of 0.1% growth. Industrial production had fallen by 1.3% in January from December. On an annual basis, industrial production rose 0.5% year-on-year in February, reversing the 0.9% annual decline seen in January. This was also ahead of market estimates of 0.2% growth.

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BROKER RATING CHANGES

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Berenberg cuts ITV to ’sell’ (hold) - price target 64 (128) pence

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Barclays raises CRH to ’overweight’ (equal weight) - price target 44 EUR

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COMPANIES - FTSE 100

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Pharmaceutical firm AstraZeneca said Enhertu has been granted priority review in the US for patients with unresectable or metastatic non-small cell lung cancer whose tumours have a HER2 mutation and who have received a prior systemic therapy. Enhertu is a HER2-directed antibody drug conjugate being jointly developed by Astra and Daiichi Sankyo. The priority review follows breakthrough therapy designation granted by the US Food & Drug Administration for Enhertu in this cancer type in May 2020.

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COMPANIES - FTSE 250

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Spectris, a supplier of precision instrumentation and controls, said it has sold Omega Engineering to Arcline Investment Management for $525 million, strengthening its balance sheet and paving the way for a share buyback. Specialist sensors provider Omega generated sales of £129.0 million in 2021 and adjusted Ebitda of £19.7 million. ‘With new management and a revised strategy launched in 2020, Omega ended 2021 with a strong order book and well positioned for future growth; expecting to return to pre-Covid levels of revenue this year. We have been clear that scale is essential to deliver acceptable levels of profitability at Omega. As such, we believe that Omega’s next stage of development can be better fulfilled with the scale provided as part of a larger group,’ said Spectris. Spectris said its ‘enhanced’ balance sheet following the sale leaves it well places to take part in further investment activity. In addition, the firm unveiled a £300 million share buyback programme, with an initial tranche of £150 million to start shortly.

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Kainos said trading in its recently ending financial year was strong, with results to be in line with consensus forecasts. The computer software firm said new and existing clients maintained or increased their levels of investment in digital solutions in the year ended March 31. ‘Looking ahead, our robust pipeline, strong balance sheet and significant contracted backlog underpin our confidence in our outlook. As a result, we believe that we are well-positioned for further growth and remain confident in our strategy,’ the company said.

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Fund management company JTC hiked its dividend after revenue and profit growth in 2021, with acquisitions helping to boost performance. Revenue for 2021 grew 28% to £147.5 million from £115.1 million in 2020, and pretax profit jumped to £27.8 million from £11.2 million. Annualised new business wins totalled £20.9 million, up from £17.9 million in 2020. The revenue growth reflected strong net organic growth of 9.6% plus inorganic growth of 19%, the firm said. JTC lifted its dividend for the year by 14% to 7.67p from 6.75p in 2020.

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COMPANIES - SMALL CAP

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Ideagen noted Cinven’s announcement on Thursday last week and confirmed it has not received a takeover approach. Private equity firm Cinven had said it was in the early stages of mulling a takeover bid for AIM-listed Ideagen. Cinven said no approach had been made to the information management, safety, risk and compliance software provider’s board yet, and there could be no certainty an offer will be made. Cinven has until the close of play on May 12 to announce whether it plans to make a firm offer or not.

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Tuesday’s shareholder meetings

Bion PLC - GM re becoming cash shell

Ebiquity PLC - GM re MediaPath acquisition

GreenRoc Mining PLC - AGM

Herald Investment Trust PLC - AGM

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