Pearson plans sale of oil company stake

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The Independent Online
PEARSON is pressing on with restructuring itself as a media group, with the planned sale of its remaining 41 per cent holding in Camco, the US oil services company, by the end of October.

But its attempts to diversify into television continue to founder on the high prices being sought by vendors - the group has abandoned plans to buy 10 per cent of TVB, the Hong Kong broadcaster, as the price asked was too high - and the restrictions of the UK's cross-media ownership rules.

Lord Blakenham, chairman, expressed frustration at the slowness of the current review by the Government of the restrictions that in effect limit Pearson, owner of the Financial Times, to minority stakes in UK broadcasters.

Frank Barlow, chief executive, underlined Pearson's disappointment with the restricted frequencies of the putative Channel 5. Pearson is part of a consortium that wants to bid for C5, but Mr Barlow said he would not do so on the current basis, which he said offered cover of less than half the population.

The Camco stake is expected to raise about dollars 200m ( pounds 130m). Since the end of last year, when Pearson floated 59 per cent of the company at dollars 15 a share, Camco's share price has risen to nearly dollars 20.

Despite a sharp rise in operating profits, Pearson's half-year results disappointed the market, revealing a poor performance on the books side. Sentiment was not helped by a warning from Lord Blakenham that progress would be harder in the second half.

Pre-tax profits in the six months ended June rose 50 per cent to pounds 69.3m. Operating profits rose from pounds 51.5m to pounds 67.6m on turnover up from pounds 191.4m to pounds 225.8m. Newspapers did well, with operating profits up from pounds 22.2m.

But the disappearance in book profits - they recorded a loss of pounds 7m ( pounds 1.7m) - surprised the City. The books division was the company's strongest performer in 1993, contributing operating profit of pounds 102.4m.

The shares dropped 31p to 628p.

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