Educational materials publisher Pearson on Friday provided a positive update on first quarter trading, while also announcing a new acquisition.

Pearson has agreed to buy Mondly, an online language learning platform. It provided no financial details, but said it expects the purchase to accelerate revenue growth for its English Language Learning division from 2023 onward. It expects mid-teens margins for the division by 2025.

‘Mondly is a fast growing and profitable business that expands our reach and scale in the language learning market and drives growth for the company,’ said Pearson Chief Executive Andy Bird. ‘This acquisition is strategically important to the group as well as being accretive and driving shareholder returns.’

Mondly offers learning of English and 40 other languages via its app and other digital products, including virtual reality.

Turning to its own recent trading, Pearson reported underlying sales growth of 7% in the first quarter. It reaffirmed its guidance for adjust operating profit in 2022.

Pearson added that its £350 million share buyback programme has begun, with £75 million already completed.

Pearson shares were up 2.2% early Friday.

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

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MARKETS

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FTSE 100: up 0.5% at 7,545.66

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Hang Seng: up 3.4% at 20,959.08

Nikkei 225: Tokyo market closed for holiday

S&P/ASX 200: closed up 1.1% at 7,435.00

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DJIA: closed up 614.46 points, or 1.9%, at 33,916.39

S&P 500: closed up 103.54 points, or 2.5%, at 4,287.50

Nasdaq Composite: closed up 382.59 points, or 3.1%, at 12,871.53

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EUR: up at $1.0542 ($1.0524)

GBP: up at $1.2530 ($1.2458)

USD: down at JP¥130.29 (JP¥131.00)

Gold: up at $1,911.36 per ounce ($1,887.75)

Oil (Brent): up at $108.39 a barrel ($106.55)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Friday’s key economic events still to come

Japan Showa Day. Financial markets closed.

1100 CEST EU gross domestic product

1100 CEST EU consumer price index

0830 EDT US personal income & outlays

1000 EDT US University of Michigan survey of consumers

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Annual UK house price growth slowed slightly in April but remained robust, according to figures from mortgage lender Nationwide. UK house prices rose 12% year-on-year in April, slowing from March’s 14% climb. ‘Nevertheless, this is the 11th time in the past 12 months that the annual growth rate has been in double digits,’ Nationwide analyst Robert Gardner commented. On a monthly basis, the average UK house price climbed 0.3% to £267,620, from £265,312. In March, prices had risen 1.1% monthly. Gardner added: ‘Housing market activity has remained solid with mortgage approvals continuing to run above pre-Covid levels. Demand is being supported by robust labour market conditions, where employment growth has remained strong and the unemployment rate has fallen back to pre-pandemic lows.’

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Ukrainian President Volodymyr Zelensky welcomed further US financial support as a ‘very important step’. Zelensky thanked both US President Joe Biden and the American people for their help, expressing hope that the US Congress would ‘quickly support’ the $33 billion boost. ‘President Biden rightly said today that this step is not cheap,’ Zelensky said in his daily video address. ‘But the negative consequences of Russia’s aggression against Ukraine and against democracy are so large-scale for the whole world that, in comparison with them, this support from the US is necessary. Together, we can certainly stop Russian aggression and reliably defend freedom in Europe.’ Of the latest sum, $20 billion would be used for military aid while $8.5 billion would be provided for economic aid. The US has pledged or already delivered weapons and ammunition worth more than $3.7 billion to Ukraine since Moscow’s attacks began in late February.

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BROKER RATING CHANGES

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JPMorgan cuts J Sainsbury price target to 190 (230) pence - ’underweight’

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RBC cuts Oxford Nanopore Technologies price target to 400 (700) pence - ’outperform’

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COMPANIES - FTSE 100

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NatWest rounded off the UK blue-chip banking earnings season with a slight flourish. Total income in the three months to March 31 climbed 17% annually to £3.03 billion from £2.59 billion. Operating pretax profit jumped 96% to £1.25 billion from £635 million. The lender expects to meet annual guidance, though there is an improved outlook for its ’Go-Forward’ businesses, which exclude Ulster Bank Republic of Ireland. NatWest now expects total income, excluding notable items, at the ‘Go-Forward’ units to be ‘comfortably above’ £11.0 billion. Back in February, it only expected total income ‘above £11.0 billion’, not ‘comfortably above’. In addition, on Friday, AIB said it has entered into exclusive talks with NatWest to acquire €6 billion in Ulster Bank performing tracker mortgages. ‘Any potential transaction remains subject to negotiations and agreement,’ AIB added.

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Pharmaceutical firm AstraZeneca’s got a boost from its acquisition of Alexion. AstraZeneca said its total revenue in the first three months of 2022 surged 56% to $11.39 billion. The drugmaker’s reported earnings per share fell 79% yearly, however, to $0.25. Core EPS, which excludes acquisition-related items, amortisation of intangibles, impairments, and restructuring charges, was 16% higher at $1.89. Astra said the revenue surge reflected ‘growth across the company, the contribution of the Alexion medicines and several Vaxzevria contracts that are expected to complete delivery by half year 2022’. AstraZeneca completed its $39 billion takeover of Boston-based rare diseases firm Alexion Pharmaceuticals in July last year. Astra backed annual guidance. It tips revenue to rise ‘by a high teens percentage’ and core EPS to climb by a ‘mid-to-high twenties percentage’. Both growth rates are at constant currency. Astra has not given any guidance on a reported basis. It also said it plans to launch a new R&D site in Cambridge, Massachusetts.

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Generic drug maker Hikma Pharmaceuticals raised guidance for its key Injectables business due to the contribution from its acquisition of Custopharm. Back in September, Hikma agreed to buy the California-based generic injectable products company for a total of up to $425 million. The deal added up to 13 approved products to Hikma’s portfolio. The company said it now expects Injectables revenue growth in mid-to-high single digits in 2022, up from previous guidance of low-to-mid single digits. Generics revenue is expected to grow by 8% to 10% in 2022, while Branded revenue is expected to be in line with 2021.

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Reckitt Benckiser reported a slight revenue fall in the first quarter of 2022 but said it expects 2022 like-for-like net revenue growth at the upper end of its 1% to 4% guidance. ‘Despite significant cost inflation, we expect adjusted operating margins in-line with prior year and current market expectations,’ the Dettol and Air Wick owner said. Net revenue in the first quarter fell 2.3% year-on-year to £3.42 billion. On a like-for-like basis, it was up 5.6%. Hygiene arm revenue fell 9.0% like-for-like, though Nutrition surged 20% and Health jumped 21%.

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Oil major BP will partner with German automaker Volkswagen to ‘boost’ adoption of electric vehicles across Europe. The pair plans to ‘rapidly’ build fast-charging EV network across Europe by 2024. ‘Volkswagen’s innovative Flexpole 150,000 watts charging units, each of which features two charge points, have an integrated battery storage system, overcoming one of the biggest obstacles to the rapid roll-out of fast charging infrastructure in Europe today – the need for high-powered grid connections,’ VW explained. First phase of the roll-out will see up to an additional 4,000 charge points at BP’s Aral retail sites in Germany and BP retail sites in the UK over the next 24 months. The paid hope to make 8,000 charge points available across Europe by end of 2024.

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COMPANIES - SMALL CAP

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Electrical goods seller AO World said it is ‘cautious’ about its revenue and profit outlook, amid supply chain pressures and the impact of inflation. In the year ended March 31, group revenue fell 6% year-on-year, though was up 52% from two years prior. A strategic review launched in January is continuing, AO World added.

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Building materials company Kingspan said first-quarter revenue surged, though inflationary pressures, which had ebbed slightly at the turn of the year, have returned in recent weeks. Kingspan’s revenue in the first quarter of 2022 jumped 47% year-on-year to €1.89 billion. ‘Raw material inflation which had eased considerably at the turn of the year has returned sharply over the past six weeks and the associated recovery effort is ongoing,’ it cautioned. ‘The group’s trading outlook for the second quarter is positive with a strong order backlog on hand and decent activity in most end-markets. Raw material inflation remains an issue to be firmly managed, coming on the back of a highly inflationary year in 2021.’

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COMPANIES - GLOBAL

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BASF said first-quarter profit was hit by Russia-related impairment charges, despite healthy growth in sales. The Ludwigshafen, Germany-based chemical company said that, in the first quarter, sales grew 19% year-on-year to €23.08 billion from €19.40 billion. This was mainly driven by higher prices, notably in the Chemicals and Materials segments, which was somewhat offset by slightly lower sales volumes, BASF said. Earnings before interest and tax rose 19% to €2.8 billion, but pretax profit dropped 16% to €1.88 billion from €2.25 billion in the first quarter of 2021. The drop was due to impairment charges from Wintershall Dea, which caused a decline in income from shareholdings of €1.1 billion. The charges were caused by the war in Ukraine, and concerned assets in Russia and the gas transportation business.

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Friday’s shareholder meetings

ADVFN PLC - GM re director appointments

AstraZeneca PLC - AGM

BBGI Global Infrastructure SA - AGM

GreenCoat Renewables PLC - AGM

Holders Technology PLC - AGM

HSBC Holdings PLC - AGM

JPMorgan Claverhouse Investment Trust PLC - AGM

Kingspan Group PLC - AGM

Minoan Group PLC - AGM

Nostrum Oil & Gas PLC - GM - re notes restructuring

Pearson PLC - AGM

Photo-Me International PLC - AGM

Rotork PLC - AGM

Smurfit Kappa Group PLC - AGM

Travis Perkins PLC - AGM

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