Pearson remains takeover target after mixed results

Media groups: Publishing and leisure company reveals unexpected losses at its US CD-Rom publisher 8 Rival looks to global on-screen expansion

Pearson, the media, publishing and leisure company, yesterday failed to shed its reputation as a potential takeover target, unveiling mixed results from its range of publishing, entertainment and television assets.

Despite posting pre-tax profits up 23 per cent to pounds 365.1m in 1995, the company, publishers of the Financial Times and a leading television programmer, detailed unexpected losses at its US CD-Rom publisher, Mindscape. It also had to rely on an extraordinary profit of pounds 131m from its sale last year of a stake in BSkyB, the satellite broadcaster, to shield a 5 per cent drop in its underlying performance.

The shares rose 7p on the day, to close at 664p. Henderson Crosthwaite reiterated yesterday its breakup estimate of pounds 9 a share.

Analysts were of mixed view on the results. Neil Blackley, at Goldman Sachs, said: "I like the company. It's got some tremendous brands and you can see those shining through."

But other analysts were concerned about the losses of pounds 6.9m at Mindscape, the US publisher of games and "infotainment" titles on CD-Rom, cartridges and floppy discs, bought for pounds 312m nearly two years ago.

Last December, the company warned analysts that operating profits would be down year-on-year in 1995, although no mention was made of Mindscape.

"Clearly, the results at Mindscape are unacceptable," Frank Barlow, chief executive, said. The company has hired the consultants McKinsey to undertake a review of the operations and recently announced the appointment of John Moore, formerly head of Penguin US, as chief executive.

The losses were linked in part to a high rate of return in the new year of product shipped in December for the all-important Christmas season.

"What we must do now is a detailed market study to decide where we should concentrate," Mr Barlow said.

The company's television operations, which include Thames Television and Grundy Worldwide, the independent producers, both performed strongly. Despite criticism last year of the pounds 175m paid for Grundy, Greg Dyke, chief executive of Pearson Televison, told analysts that the acquisition had been a great success.

Westminister Press, the company's regional publishing arm, was also a bright spot, helped by a cost-cutting programme. Lazard Brothers, the investment bank, also turned in a superior performance, and stands to do even better this year once it takes in fees due on its work for Granada on the pounds 3.8bn Forte bid.

Mr Barlow said that future acquisitions were likely to come in the television and media sectors, where management attention has been concentrated in recent years.

A recent restructuring has led to firmer lines of management control and the appointment to the main board of key executives, including Mr Dyke from Pearson Television and John Makinson, formerly managing director of the Financial Times, who replaces James Joll as group financing director on 1 April.

Mr Barlow dismissed reports, first published in the Independent, that Granada had contemplated a break-up bid for Pearson last year.

Sport
Mourinho lost his temper as well as the match
sportLiverpool handed title boost as Sunderland smash manager’s 77-game home league run
Voices
Sweet tweet: Victoria Beckham’s selfie, taken on her 40th birthday on Thursday
voices... and her career-long attack on the absurd criteria by which we define our 'betters', by Ellen E Jones
Arts & Entertainment
Billie Jean King, who won the women’s Wimbledon title in 1967, when the first colour pictures were broadcast
tv
News
Snow has no plans to step back or reduce his workload
mediaIt's 25 years since Jon Snow first presented Channel 4 News, and his drive shows no sign of diminishing
VIDEO
Life & Style
food + drinkWhat’s not to like?
Voices
Clock off: France has had a 35‑hour working week since 1999
voicesThere's no truth to a law banning work emails after 6pm, but that didn’t stop media hysteria
Arts & Entertainment
Maisie Williams of Game of Thrones now
tvMajor roles that grow with their child actors are helping them to steal the show on TV
Life & Style
Lana Del Rey, Alexa Chung and Cara Delevingne each carry their signature bag
fashionMulberry's decision to go for the super-rich backfired dramatically
Arts & Entertainment
Kingdom Tower
architecture
Life & Style
Sampling wine in Turin
food + drink...and abstaining may be worse than drinking too much, says scientist
Arts & Entertainment
Game of Thrones writer George R.R. Martin has been working on the novels since the mid-Nineties
books
News
Easter a dangerous time for dogs
these are the new ones. Old ones are below them... news
News
Brand said he
people
Voices
Actor Zac Efron
voicesTopless men? It's as bad as Page 3, says Howard Jacobson
Sport
Roger Federer celebrates his victory over Novak Djokovic in the Monte Carlo Masters
sport
Arts & Entertainment
The monster rears its head as it roars into the sky
film
Voices
For the Love of God (2007) The diamond-encrusted skull that divided the art world failed to sell for
its $100m asking price. It was eventually bought by a consortium
which included the artist himself.
voicesYou can shove it, Mr Webb – I'll be having fun until the day I die, says Janet Street-Porter
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Telesales & Sales Support Apprentice

£221.25 per week: QA Apprenticeships: This company is a well established Inter...

Client Relationship Manager - SQL, Python

£40000 - £50000 per annum: Harrington Starr: Client Relationship Manager - SQL...

**Financial Services Tax**

£35000 - £50000 per annum: Pro-Recruitment Group: Take your chance to join the...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit