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
New UK station Russia Today gives a very bizarre view of Britain
By performing as African Americans or Indians, white people get to play act a kind of 'imaginary liberation', writes Michael Mark Cohen
New essay by JK Rowling went live on Pottermore site this morning
Top Gear presenter is no stranger to foot-in-mouth controversy
- 1 'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
- 2 Canadian actor punched in face after 'Islamophobia' experiment goes wrong in wake of Ottawa shooting
- 3 Topshop at centre of row over body image as 'shocking' skinny mannequin photo goes viral
- 4 Top Gear presenter Jeremy Clarkson criticised for beer tweet
- 5 The bubble bursts for Sodastream
'Nasa Confirms Six Days of Darkness in December': No, they don't - it's a hoax
Top Gear presenter Jeremy Clarkson criticised for beer tweet
Halloween 2014: From the Screaming Man of Pluckley to the 'White Lady' of the Tower of London - Britain's 20 most haunted places
The bubble bursts for Sodastream
Russian politician says Apple CEO Tim Cook should be 'banned' from country after coming out as gay
Pope Francis declares evolution and Big Bang theory are real and God is not 'a magician with a magic wand'
Huge surge in Ukip support after EU funding row, according to new poll
Ukip ‘exploiting grooming scandal’ to secure party’s first police chief
Nigel Farage: 'There’s nothing wrong with white people blacking up'
Maureen Lipman says 'she can't vote Labour while Ed Miliband is leader'
Muslims, immigration and teenage pregnancy: British people are ignorant about almost everything
iJobs Money & Business
£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...
£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...
£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...