Pearson to pump pounds 150m into `FT'
Tuesday 18 March 1997
Richard Lambert, currently the longest-serving national newspaper editor, is moving to New York for a year from July to oversee editorial developments for the Financial Times in the US. Andrew Gowers, deputy editor, becomes acting editor.
There was disappointment in the City yesterday, however, that Marjorie Scardino, chief executive, did not unveil the widely expected restructuring of Pearson and the company's shares closed 17.5p down at 756.5p.
"It's going to be an evolution, not a revolution around here," she said. "This may sound like motherhood and apple pie but ... we are going to act like a group not like an investment portfolio.
"Whatever else we do we are going to work hard to improve the financial performance of this group," she continued. "As time goes on we may change the business we're in, too, as we work toward being the first in a few important markets. But we won't be selling things just to be tidy."
Ms Scardino was speaking after Pearson reported an 8 per cent increase in 1996 pre-tax profits before exceptional items to pounds 281m. But operating profits including one-off items fell from pounds 260m to pounds 181m following a pounds 100m charge taken against Penguin.
The problems at Penguin were uncovered in January and relate to unauthorised discounts given by a middle-ranking back office employee, Christina Galatro, to customers in return for early payments.
John Makinson, finance director, said Pearson believed the irregularities were the work of "one rogue employee", adding there was no firm evidence of collusion. Her superior had been suspended as a precaution pending the outcome of an investigation by accountants Price Waterhouse.
The FT is targeting the US as part of plans to invest up to pounds 100m over the next five years to increase the paper's circulation overseas. A further pounds 50m could be spent on promoting the FT and on enhancing production in other Pearson information companies, many of which carry the FT brand.
"We aim to achieve heroic circulation and heroic profit," Ms Scardino said.
North America accounts for only 35,000 of total daily FT sales overseas of 130,000. Total circulation for the paper, including the UK, is about 300,000.
Analysts welcomed Ms Scardino's decision to focus on the FT. "She's going back to what she knows, it's something she understands," one broker said. Ms Scardino ran The Economist, 50 per cent-owned by Pearson, before becoming chief executive.
Ms Scardino also quashed speculation that its television business, which includes Thames Television and Grundy, makers of Neighbours, was about to be sold to a pounds 500m management buyout team led by Greg Dyke.
She declined to identify Pearson's activities, raising speculation that Lazards, the 50 per cent-owned merchant bank, or even Madame Tussaud, the waxworks tourist attraction, may be up for sale. However, Ms Scardino confirmed recent reports in The Independent that residual stakes in pay-TV broadcaster BSkyB and SES, the Luxembourg-based Astra satellite owner, were up for sale.
Pressure for root-and-branch change at Pearson has increased since the disastrous, pounds 313m acquisition in 1994 of Mindscape, the US computer software developer, where losses last year reached pounds 45m.
Comment, page 21
Exclusive: World’s most pristine waters are polluted by US Navy human waste
Chicago River turns green to mark Saint Patrick's Day 2014
Saint Patrick's Day: Google Doodle marks patron saint of Ireland - here are 10 things you didn't know about the man
Missing Malaysia Airlines Flight MH370: Did jetliner fly into area controlled by Taliban? Net widens after claims final satellite signal could have been sent from the ground
Nasa-funded study warns of ‘collapse of civilisation’ in coming decades
Ukip and Nigel Farage on course for remarkable victory in European elections
Tony Benn was entirely ineffectual - and usually wrong
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Britain’s five richest families worth as much as poorest 20 per cent, says Oxfam
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
- 1 Is your name now 'banned' in Saudi Arabia?
- 4 Nasa-funded study warns of ‘collapse of civilisation’ in coming decades
iJobs Money & Business
£35000 - £60000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£32000 - £42000 per annum + Bonus and Benefits: Harrington Starr: A leading pr...
£60000 - £65000 Per Annum plus car allowance and excellent benefits: Clearwate...
£55000 - £65000 per annum: Harrington Starr: Front Office Support Analyst -Cha...