Pearson maintains dividend as profits fall, Direct Line increases distribution

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The FTSE 100 is expected to open 46 points higher on Monday, having closed down 0.31% on Friday at 6,630.52.

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Educational publisher Pearson maintained its dividend as it delivered lower annual profits offset by a rise in online learning, reflecting school closures during the Covid-19 pandemic. The company on Monday said adjusted operating profit fell to £313m from £581m, in line with expectations. A final unchanged dividend of 13.5p a share was declared. Sales decreased 12% to £3.4bn, reflecting underlying performance, portfolio changes and currency movements, Pearson added.

Direct Line increased its dividend and announced a £100m share buyback as the insurer reported a 4.5% drop in annual profit. Operating profit fell to £522.1m from £546.9m in the year to the end of December as gross written premiums dipped 0.7% to £3.18bn. Direct Line increased its final dividend by 2.8% to 14.7p a share and said it would buy back up to £100m of shares.

Phoenix Group reported record cash generation1 in 2020 on Monday, at £1.7bn, which was up from £70-7m in 2019 and above the upper end of its target range of between £1.5bn and £1.6bn. The FTSE 100 insurer reported a group operating profit of £1.2bn, up from £810m, as it “met or exceeded” all of its customer targets through the Covie-19 pandemic. Its assets under administration stood at £338bn as at 31 December, up from £248bn year-on-year.

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US close

Stocks closed in positive territory on Wall Street on Friday, with the Dow Jones Industrial Average closing up 1.85% at 31,496.30.

The S&P 500 added 1.95% to end the session at 3,841.94, and the Nasdaq Composite was 1.55% firmer at 12,920.15.