New boss Fallon stands by Financial Times and Penguin
Thursday 04 October 2012
Pearson's incoming chief executive, John Fallon, has insisted that the Financial Times and Penguin Books can remain a core part of the education giant.
Mr Fallon, 50, a long-serving Pearson executive, has a background in the company's fast-growing education business, prompting fresh speculation that he could sell the FT because it is a non-core asset.
The departing chief executive, Dame Marjorie Scardino, who hands over to Mr Fallon on 1 January after 16 years at the helm, famously said a decade ago that the paper would be sold "over my dead body".
Asked yesterday if he was committed to the FT, Mr Fallon said: "I very much recognise the FT as a very valuable and valued part of the company."
Even so, City analysts were quick to dust off forecasts about what the FT or Penguin might be worth. Investec put a value of £750m on the FT and £650m on Penguin.
Mr Fallon, a Briton who was educated at Hull University and became Pearson's chief executive of international education in 2008, said he does not plan any big changes at the company.
"I didn't sell the board a strategy at all," he said, explaining that he will continue a policy of expanding Pearson in digital and emerging markets.
He pointed out he has quadrupled sales and increased profits 15-fold in the international education sector during a decade at Pearson.
But Mr Fallon added that this approach was not just relevant to education.
"They are Pearson-wide strategies that apply just as well to the FT and Penguin," he said.
Alex de Groote, an analyst at Panmure Gordon, said that Mr Fallon's appointment suggested continuity at the company, but might disappoint some investors who want to sell "legacy" print assets.
Pearson's chairman, Glen Moreno, said Mr Fallon had been the "unanimous" choice of the board after a two-year hunt for Ms Scardino's successor.
FT Group's chief executive Rona Fairhead, Penguin boss John Makinson and US education boss Will Etheridge had also been seen as candidates and Investec raised fears of a boardroom exodus.
"It's something we always think about," admitted Mr Moreno. "But we're ready in terms of succession planning if someone should be ready for another challenge."
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