Will the good times last at Pearson?

Former rodeo rider Marjorie Scardino steered through some difficult times as the first female chief executive of a FTSE 100 company. But the toughest fences may be yet to come. By Ian Burrell

Few people expected Marjorie Scardino to last this long. When she was appointed chief executive of Pearson more than 11 years ago, the news sent the company's share price into a downward spiral. "The market was looking for a hard-hitting, well-known character, and they didn't get one," harrumphed one analyst, by way of explanation.

The first woman to take the helm of a FTSE 100 company was a former journalist who had grown up in Texarkana, Texas, racing horses around oil barrels at rodeos. More prescient observers noted that she had, for almost five years, headed the Economist Group, half-owned by Pearson, and presided over the rise of The Economist, which had enjoyed a 78 per cent sales growth in little over three years.

The rise of The Economist continues, as does Dame Marjorie's tenure at Pearson. Yesterday she announced that, in spite of its exposure to the American economic downturn, the company's performance for 2007 was better than market expectations, with adjusted operating profit up by 14 per cent to £634m, and underlying sales growth of 6 per cent.

"This is another record set of results and an excellent performance from every part of Pearson," said Dame Marjorie in a statement. "We continue to shape Pearson into a more digital, more international and more efficient company, and those changes make us confident that 2008 will be another good year."

As analysts digested the results, the principal murmurings of doubt concerned fears that American students, colleges and state education officials might be less inclined in 2008 to spend money on the text books which are a major part of Pearson's business.

Pearson admitted this sector would be flat in 2008 but Dame Marjorie later went out of her way to point out that the company was multi-faceted and insulated from cyclical change. Pearson Education, she said, does not just supply school books but is also at the forefront of testing students and compiling data on the workings of the education system. Furthermore, it has a £1bn education business outside of the US.

Dame Marjorie, 61, has steadily grown Pearson's global media business with a strategy based on three watchwords: digital, diverse and international. At the heart of the empire is the Financial Times, which during Dame Marjorie's time at Pearson has been the subject of continuous rumour that it will be put up for sale. Such speculation was encouraged by the last advertising downturn of 2000, which saw the FT's profits wiped out. Since then Pearson has rebuilt the paper into a highly profitable multi-media offering, incorporating FT.com. The print edition has enjoyed increased circulation (up 2.2 per cent) and critical acclaim, winning the What the Papers Say award for newspaper of the year in 2007. FT Publishing, which includes the newspaper and other specialist titles, made a profit of £56m, compared to £27m the previous year.

Whereas in 2000 the FT Group depended on advertising for more than 50 per cent of its revenues, the modern business, which includes niche digital intelligence offerings such as Mergermarket and Money-Media, now makes less than 30 per cent of its money from this source, reducing its exposure to a slump.

Other media companies have switched focus to sophisticated online services, notably the Anglo-Dutch company Reed Elsevier, which offloaded some of its business-to-business titles, such as Farmers Weekly. The FT Group recently sold the national titles FT Deutschland and Les Echos to concentrate on the FT's global ambitions.

Rupert Murdoch had been at the top of the list of parties supposedly interested in prising the FT from Dame Marjorie but the biggest media mogul now represents a different threat as the new owner of the rival Wall Street Journal, which he is expected to re-position in an attempt to make it the undisputed global leader.

Dame Marjorie yesterday played down the threat, suggesting the Journal was one of many competitors. "We see ourselves not as having one major rival ... we are a niche paper, we are more international and we think that niche strategy is a more resilient strategy and different from the Journal," she told Cantos.com.

When she started in her role, Dame Marjorie could never have imagined that her company's profits might be enhanced by an internet-based interview or "Webinar" conducted by Oprah Winfrey about a single book. But tonight some 500,000 people in 125 countries will form the online audience for a conversation between the chat show host and the author Eckhart Tolle.

Penguin, an important component of Pearson, published Tolle's book A New Earth, Awakening to Your Life's Purpose in 2005, selling a relatively modest 500,000 copies until Winfrey endorsed the title a month ago, since when a further four million have been bought. Other key Penguin authors include Alan Greenspan, Khaled Hosseini and Jamie Oliver. Despite gloomy predictions in the print media, Dame Marjorie expects Penguin to enjoy double digit margins in 2008, partly by taking advantage of digital production opportunities.

Dame Marjorie might be one of the most prominent women in the City but she is still a private individual, wary of her public image. When she briefly returned home to Texas after landing the Pearson job, she professed herself "so hurt" by locals who suggested she had affected an English accent, though she retains her American vowels a decade later.

And yesterday, as she attempted to put across her message that "I do have quite a lot of confidence" for the year ahead, she could not escape questioning over rumours that she is looking to move on. Not at all, she said; she was "excited" her digital and international strategy was "taking hold" and there was still "a lot to accomplish".

Even after more than 11 years in the Pearson saddle, the one time young rodeo rider still can't convince everyone that she has her hands firmly on the reins.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
News
people
News
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own