Pearson chairman refuses to rule out sale of 'Financial Times'
Saturday 22 April 2006
The newly installed chairman of the publishing giant Pearson yesterday refused to rule out selling the company's Financial Times newspaper.
Speaking to journalists after yesterday's annual general meeting, Glen Moreno would not be drawn on the future ownership of the newspaper. He said: "You make these decisions in the boardroom, not in the press. And I'm not being cute about that."
Mr Moreno, who took the top job in October, added: "I admire the newspaper [the FT]. The immediate task is to restore it to serious profitability."
The stance was in stark contrast with his predecessor as chairman, Dennis Stevenson, who at last year's AGM said the FT would be kept by Pearson. "Rumours of us selling the FT are completely untrue. We have no intentions to do so," he told the event in 2005. Pearson's long-serving chief executive Marjorie Scardino, who once famously said the FT would be sold "over my dead body", declined to make any sort of comment on the newspaper's future.
"I'm not answering that," she told journalists yesterday, adding that it was "pathetic" that anyone would read anything into her refusal to repeat her "over my dead body" comment.
The FT does not fit with the rest of Pearson's business, which is based on publishing books. Some shareholders have suggested that the newspaper, which has volatile earnings, should be sold.
Addressing the AGM, Mr Moreno revealed that he was unhappy with Pearson's dependence on profits from the US. He said it was "not satisfactory" that US earnings dominate and that one of the issues to be tackled was poor profit margins in the UK.
Some 70 per cent of group profits come from the US, mostly from Pearson's large educational publishing business. Among the regions into which it is planning to expand is educational publishing in India and China.
At the AGM, a number of shareholders noted that the Pearson share price - which closed at 761p yesterday - was a long way off the 1,000p (£10) level of a rights issue in recent years, or its all-time high of some 2,000p. Mr Moreno told them: "If you bought at £10, hold on, the cavalry is coming. If you bought at £20, hold on, for your children... I really do feel sorry for shareholders who bought in exuberant markets."
Mr Moreno and Ms Scardino, who are both American, indulged in mutual praise at the AGM and the chemistry between the pair appeared good - some City commentators had previously suggested that Ms Scardino's position would come under pressure once a new chairman took over.
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