Pearson perks up on prospects of a presentation

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The Independent Online
Pearson is thought to be seeking to reassure analysts about its computerised information expansion.

Shares of the banking and media group have underperformed with July's pounds 126m takeover of a US group, Interactive Data Corporation, thought to be largely responsible.

The stock market has on occasions found Pearson's acquisition spree difficult to accommodate. And Interactive was seen in some quarters as a deal too far.

Now the story is Pearson is due to hold an investment conference next week to discuss the takeover with analysts.

Interactive supplies electronic financial information. It is intended to complement Pearson's Extel business, acquired for pounds 74m two years ago. But Pearson paid a fancy price for Interactive. And its shares have fallen steadily as the market has failed to appreciate the deal. They touched 657p early this month but fell to 600p before moving to 605p as stories of the presentation went the rounds and the Time Warner $8bn bid for Turner Broadcasting was announced.

The rest of the market continued to doze in the August sunshine with the FT-SE 100 index managing to stir itself sufficiently to score a 1.4- point gain to 3,504 in slack trading.

At one time it appeared that futures-related trading would undermine the cash market but a relatively firm New York display provoked a modest late rally.

Occasionally, whispers of takeover action helped to produce a little activity. Lloyds Chemists was again in the frame.

Since disappointing results and a restructuring exercise was announced in April the shares have shown surprising resilience and rose a further 9p to 249p.

The market believes Kingfisher has looked at Lloyds and decided to keep its powder dry. Latest rumour is that Tesco could be interested, although talk of a bid mingled with probably more realistic chatter that the two planned to forge a trading link.

Hambros, the securities group, added another 6p to 205p and Merrydown, the struggling cider group, 26p to 135p.

British Aerospace, with GEC bid talk still in the background, rose 6p to 655p.

Ladbroke eased to 164p ahead of today's results, expected to be disappointing. The betting and hotel group, which is keen to get involved in the Hilton Hotel spread in the US, is thought to be on the verge of increasing its casino operations.

Stories are flying around of a bid for London Clubs or the acquisition of some of the Rank Organisation outlets.

Breweries had a flat session as the influence of the heatwave gave way to worries about accountancy proposals that could force the beerage to start depreciating pub freeholds over 50 years. Robert Cumming at UBS believe such a move could cut earnings per share by up to 20 per cent.

Bass fell 12p to 649p; Scottish & Newcastle 7p to 597p and Whitbread 3p to 616p.

Allied Domecq, where worries of a dividend cut linger, lost 7p to 507p.

Builders rallied on bottom-fishing advice from Hambros. It was enough to lift Barratt Developments 3p to 195p and Beazer 5p to 145p.

Storehouse gained 10p to 311p, reflecting an overnight trade of 5 million at 309p. Kingfisher, on recent Cazenove caution, fell 6p to 457p. Interims are due next month. Sears rose 2.5p to 110p on Credit Lyonnais Laing support.

HSBC treated a Cazenove upgrade with some indifference. The shares held at 877p as the stockbroker was said to have lifted this year's forecast from pounds 3.3bn to pounds 3.68bn and next year's from pounds 3.75bn to pounds 3.95bn.

Jefferson Smurfit, the packaging group, held at 205p as 51 million shares were printed, thought to be the result of a share buy-back.

Cautious statements lowered Pentland 16p at 129p, and Vardon, 21p to 127p, but Provident Financial soared 67p to 715p on its results and Inchcape responded to James Capel enthusiasm with a 13p gain to 353p.

Vodafone rose 4p to 270p as US investment house Smith Barney was rumoured to have made bullish noises; BT gained 3p to 409.5p on its growing power in the communications revolution.

British Biotech added another 26p to 598p on support thought to come from Greig Middleton and Biocompatible, the healthcare tiddler, jumped another 30p to 218p following its US contact lens deal and link with Johnson & Johnson.

Rosebys, the retailer, held at 155p. It has acquired 90 stores from Lonrho and is expected to have a 300-strong retail chain by the end of the year generating sales of pounds 100m. Credit Lyonnais expect profits to climb from pounds 2.7m to pounds 3.8m.

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