Market signals on news wire: Robert Simpson is converting PA from a non-profit service into a commercial company that must live with fast-increasing competition. William Kay reports

AT FIRST sight, Robert Simpson is an unlikely person to head one of the country's great news agencies. Unlike Peter Job, his counterpart at Reuters Holdings, he has never been a journalist and it would be hard to imagine him shouting: 'Hold the front page]' from beneath a green eyeshield (not that real-life editors do that any more, if they ever did).

In contemporary style, Mr Simpson is a marketing man, with a degree in modern languages from London University. That was followed by a 10-year career in Which? and Xerox before he landed at the Press Association.

But his enthusiasm for PA, where he has been chief executive for the past four years, is as infectious as if it were bubbling out of the greenest reporter.

'It's fascinating, wonderful,' he said. 'PA has had to change its ways and become a market-oriented company. Agencies have traditionally been wholesalers of news and information. Now they are being expected to produce a selection of information for particular markets, such as evening papers.'

He has been given the tempting task of turning PA from a non-profit-making co-operative into a commercial company capable of taking on a growing number of competitors. That should result in a stock market flotation in two or three years.

It has involved a culture change from what was basically a service, tied to PA's shareholder-customers, to what is intended to be a market-led operation buzzing with new product ideas and sales leads.

'Entry costs have dropped and smaller organisations have been springing up doing part of what PA does,' Mr Simpson admitted.

'We are like a stately institutional department store surrounded by market boutiques. There has been a change in the people here, but there has been no night of the long knives. As staff have left, they have been replaced by more commercial people.'

Computerisation means that it is fairly easy for a few journalists to form an agency and feed copy into newspapers and broadcasters. So, despite its glittering reputation for speed and accuracy, PA has to stay ahead of the game by offering more complex services - in effect spoon-feeding its clients with pre-digested information such as racing results and share price tables.

But to the chagrin of PA's management, one of the biggest threats has come from within its own bosom. In February last year, Northcliffe Newspapers, part of Daily Mail and General Trust, and Pearson's Westminster Press, decided to form their own news agency for provincial evening papers.

PA hit back by putting into action its already formed plan to change its constitution so that its shares can be traded freely, with the proviso that no shareholder may own more than 20 per cent of the shares.

It also went round its main customers, asking them to change the length of their contracts from three months to anything between three and 10 years.

'Competition is good for you,' said Mr Simpson, ever eager to look on the bright side. 'It often teaches you something about your own business. In this case, our customers were delighted to increase their commitment to us, knowing that we were doing the same for them. It was entirely beneficial.'

But he was aware that that was not enough on its own. As PA's chairman, Sir Richard Storey, said recently: 'In the longer term, however, the company needs further new sources of revenue to support news collection.'

So the group has split into PA News, based in London, PA Sport, in Leeds, and PA Data Design, on Humberside.

While these are the three main legs of the business, there are three others: Tellex Monitors, monitoring more than 200 TV and radio stations in the UK and the Irish Republic, and two press release issuers - Two-Ten Communications and Canada NewsWire.

Computer technology means that PA can offer clients some glitzy new tricks. When Brian Lara scored his 501 last Monday, PA was able to send its subscribers a chart showing where each of his scoring shots went.

'We have someone at every county ground with a laptop computer,' Mr Simpson explained. 'And they enter what happens to every ball bowled.'

Its greatest success so far has been to win the contract to supply the editorial content of Teletext, the ITV news service. It is also talking to airlines about supplying a similar service to be piped into screens built into the seatbacks of aircraft.

These are some of the fruits of the product development teams that swing into action whenever a serious new idea comes up. The teams comprise specialists from marketing, sales, information technology, editorial and finance.

Another gem is Journalist 2000, the laptop equivalent of a mobile telephone. Instead of plugging it into a telephone line, the journalist can send copy to PA simply by dialling the number and making contact by radio.

'That means a reporter can send copy from a train, or from the middle of a battle,' Mr Simpson said. 'That can enable our reporters to beat the competition if they need to get to a phone.'

He is wary of taking PA into new media areas, other than through alliances and joint ventures. And the group goes overseas only if there is a British connection - covering a world event such as the Gulf War for British clients, or selling British news to foreign clients.

'It's a question of priorities,' Mr Simpson said. 'We have only so much in the way of resources. And although we think we would have an edge on agencies in European countries, many of them are subsidised by their governments. That's hard to compete with.'

Because it carries little financial coverage, PA is unlikely to emulate Reuters Holdings, one of the stock market successes of the past decade.

But at least PA has sold its Fleet Street headquarters to Reuters for pounds 14m. It also has the potential to be a pretty strong player in the seemingly unstoppable growth of the media industry.

(Photograph and graphic omitted)