Scardino ready to change the shape of Pearson, but 'FT' not for sale

The chairman of Pearson declared yesterday the publishing company would be "ruthless about changing the shape of the group", but said it was not considering selling its Financial Times asset.

The chairman of Pearson declared yesterday the publishing company would be "ruthless about changing the shape of the group", but said it was not considering selling its Financial Times asset.

There had been intense speculation recently that the FT would go, despite the Pearson's chief executive, Marjorie Scardino, famously saying in the past it would be sold "over my dead body".

In a possible reference to this remark, Dennis Stevenson, the chairman, speaking at Pearson's annual meeting yesterday, said: "We have no religion about past positions." Lord Stevenson conceded the company's performance had not been good enough, despite beating the media sector as a whole.

"The horrible, grisly truth is that we have under-performed the FTSE [since 2000] ... no one will be satisfied until we start outperforming the FSTE," he said, speaking at his last shareholder meeting as chairman.

Some analysts have suggested that Lord Stevenson's successor, who has not yet been selected, may decide that the FT or other assets should be sold off. Pearson is dominated by its US educational publishing business and it also owns Penguin books.

The board was repeatedly pressed by investors, some of whom were former FT journalists, about the performance of the newspaper. Asked by one investor and former FT reporter, Anthony Robinson, about the newspaper's falling circulation in the UK, Lord Stevenson said: "Are we concerned? Is Andrew Gowers [the newspaper's editor] concerned? You bet we are."

He said for every pound of extra advertising revenues at the FT, 80p dropped straight through to the bottom line, noting the ad revenues were down £140m from the peak.

"Would you bet against a recovery to a half or one-third of that [£140m]. We wouldn't. We'd feel very stupid if someone else got the benefit of that," Lord Stevenson said.

Speaking after the meeting, Ms Scardino said she stuck by her position on ownership of the FT, because, despite recent losses, it was "a good business through the cycle". "It's funny how when the FT's profits are rising, no one asks these sorts of questions," she said.

One shareholder, David Lennon, another former reporter at the FT, asked Ms Scardino: "How do you feel about receiving a bonus of £830,00 for last year. Do you think you deserve it, and if so why?"

Ms Scardino replied that pay was linked to performance. "Last year we had to work very hard to achieve what we did and I hope shareholders will agree with that."

Lord Stevenson saidtargets for 2004 demanded only "modest" profits growth because the company knew it would be a "tough" year.

Pearsonsaid ad revenues at the FT had risen 3 per cent for the year and it should break even after three years of losses.