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@Jamie Street via Unsplash

Strong results help FTSE move higher

by LLB Reporter
1st Aug 22 11:17 am

The FTSE 100 started the week higher following some relatively positive corporate updates, notably from index heavyweight HSBC.

Education publishing specialist Pearson was among the winners on Monday as it stuck with full year guidance and reported a significant increase in profit following stronger sales.

The increasingly digital-focused company is less exposed to some of the cost pressures facing other types of businesses and this is helping it in the current environment.

AJ Bell investment director Russ Mould said: “For a long time Pearson has been negatively impacted by structural changes in its market which saw demand for high-margin sales of expensive physical, academic textbooks disappear. Now the business seems to have got its act together to face a world where an increasing amount of learning is done online.

“Based on the bare facts alone, JD Sports acquisition of FootAsylum has been a costly mistake. Forced to sell by the competition regulator, it has made a pretty staggering loss of nearly 60% on an investment made just three years ago.

“However, the real costs run greater than just the financial. Events surrounding the doomed transaction contributed to the departure of its executive chairman Peter Cowgill, after a highly successful tenure, and damaged the company’s reputation for good governance.

“Elsewhere, oil prices were under pressure after weak Chinese manufacturing figures which really show the continuing impact of lockdowns on the country’s economy. China remains one of the biggest consumers of oil and other commodities.”

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