Pearson sets out plans to double value
Tuesday 05 August 1997
She also hinted that Pearson, whose portfolio includes, the Financial Times, Penguin books, Madame Tussaud's and the investment bank Lazards, was likely to undergo a big restructuring in the near future, involving large acquisitions and disposals, to achieve this goal.
"We are not ruling anything out. There will be a different cast of businesses that there are now but our goal remains the same. We have taken 666p as our base [Friday's closing price] and we are shooting for 1332p," Ms Scardino said yesterday.
She revelaed her ambitious plans as the group announced pre-tax profits of pounds 81m (pounds 30m) for the six months to June. But Pearson warned that if the strong pound could knock pre-tax profits by pounds 20m in the current year.
Ms Scardino also denied press reports of a boardroom rift with Pearson TV chief Greg Dyke and indicated that the television businesses will be part of the company's long-term future.
"Just to knock this on the head, I'd like to say that Greg and I are not having open warfare. It's just not true. Pearson Television is one of our fastest growing businesses and we are excited about it. We are looking at how to give the TV businesses greater scale and Greg and I are doing it together.'' Ms Scardino said yesterday. She dismissed talk of a management buy-out of Pearson TV as ``so much bunk''.
Pearson confirmed plans to dispose of its medical publishing arm, which publishes prestigious titles such as Gray's Anatomy. Analysts believe the business, which has an annual turnover of pounds 40m, could fetch pounds 60m-pounds 80m.
Some analysts believe that Pearson will not be able to double its size without making substantial acquisitions and believe it can easily afford to spend more than pounds 300m on purchases. Others believe that the group is looking to sell leisure attractions such as Madame Tussaud's and Alton Towers to raise extra cash for expansion. However, Ms Scardino refused to expand on which other businesses are likely to be bought and sold. She also refused to be drawn on the fate of Lazards. Some City observers believe it sits awkwardly with the rest of the group's businesses, but Ms Scardino said Lazards produced "great profits and cashflow and involved little capital".
Pearson insisted that Channel 5, in which it owns a 24 per cent stake, is on track despite technical hitches which caused reception problems. The company claims that Channel 5, which began broadcasting this spring, has picked up new viewers in July and now attracts more than 3 per cent of the viewing population.
Pearson will have to pay more than pounds 70m in start up costs for the Channel over the next few years. However, it plans to produce programmes for the new channel, which will bring in around pounds 25m this year.
Pearson revealed that a fraud by one of its employees at the US division of its book publisher Penguin has already cost the group pounds 48m. The employee was offering unauthorised discounts for the early payment of accounts. The employee has been fired and discounts withdrawn, with a resulting shortfall in receipts. Overall the group believes the fraud will cost pounds 100m.
In an effort to make more staff shareholders Ms Scardino also announced plans to introduce share option packages and a new scheme to allow employees around the world to buy shares.
Investment column, page 17
- 1 Andreas Lubitz: Who is Germanwings co-pilot who 'locked out captain and crashed flight 9525'?
- 2 JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
- 3 Germanwings crash: Descent may have been 'deliberate, suicidal choice' by pilot, claims experts
- 5 Video shows what happens when lava is poured onto ice
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Vote Ukip, says far-right group Britain First
iJobs Money & Business
£16000 - £18000 per annum: Recruitment Genius: A position has arisen within th...
£50000 - £63000 per annum + excellent benefits : Ashdown Group: IT Manager / D...
£16500 per annum: Recruitment Genius: Applicants must hold a valid SIA Door Su...
£50000 per annum: Ashdown Group: Business Analyst - Financial Services - The C...