Pearson News Update: Restructuring Hits Profits
Pearson News Update: Restructuring hits profits as the firm says Mergermarket will be sold as it does not fit with plans to extend its education business.
Mergermarket is one aspect of the three divisions that comprise the FT Group Division of Pearson with the Financial Times and a smaller stake in The Economist. The change of management that saw the departure of Marjorie Scardino who was replaced by John Fallon has only heightened the speculation that has surrounded the future of the FT Group assets. Mr Fallon however has been very definite in saying that it is not currently on the market describing the Financial Times as a very valuable part of Pearson. He added that they had had no offers for the Financial Times because it was not up for sale.
Referring to Mergermarket Mr Fallon said that it was a very sound business that showed good profit and had had recent revenues of about one hundred million pounds. However when he was asked to value the business he would not commit himself to divulging any assessment. Analysts view however is that it’s value is likely to be between one hundred and two hundred million pounds.
Pearson, that trades mostly in educational products and the on line courses that it runs as well as the textbooks that it sells put Mergermarket on the market because it had lost money. This was according to figures recorded for the first half of the year. Pearson recorded a loss of four-million pre tax that was offset against a profit of twenty eight million for the same period in 2012. Revenues in the same period rose five per cent to almost three billion pounds. Mr Fallon explained this by saying that restructuring at a cost of twenty nine million had had an impact and that Pearson books has shown eighty per cent of its profits over the second half of the financial trading period.
Pearson News Update
Pearson shares rose just over six per cent to a price of just over thirteen pounds. The restructuring that was instigated earlier this year and is due to cost, overall, one hundred and fifty million pounds. When completed it is anticipated that it will deliver savings of one hundred million pounds per year. Mr Fallon said that in terms of trading figures the years of 2013 had so far shown a performance that was much as had been expected with good growth witnessed in the digital service division and in developing markets that were helping the traditional publishing business through some tough times.
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