Pearson puts up Mergermarket form sale
27 Jul 2013
Global education company, Pearson, has put its FT Group business Mergermarket up for sale, insisting, however, that The Financial Times remained a valued part of its business.
The company said yesterday that it would explore the possibility of selling off the FT Group financial intelligence business, which made £100 million in revenues annually, and had appointed JP Morgan to handle the process.
The announcement has led to speculation in banking circles that Pearson might also now consider the future of the Financial Times.
John Fallon, chief executive of Pearson, reiterated that the paper was not for sale. The FT's future had been speculated on and off since Pearson's announcment that Fallon was replacing Dame Marjorie Scardino as chief executive last autumn.
According to Fallon, as he said at the company's last results presentation in February, the Financial Times was a valued and valuable part of Pearson, adding that the newspaper was not for sale and there had been no process nor discussions about selling the FT and there had been no approaches regarding the FT.
He said, the Mergermarket had "flourished" as part of FT Group, but unlike the Financial Times he could not see the industrial logic of the business fitting into Pearson's goal to emerge as a market-leading education company.
Meanwhile, the FT Group, which also included Pearson's 50 per cent stake in Economist Group, posted flat revenues of £217 million in the first half of the year.
According to the company, the division managed a creditable 24 per cent year-on-year increase in adjusted operating profit to £26 million, despite "tough" advertising markets. Advertising contributes to 36 per cent of FT Group revenues.
Pearson said the Economist Group reported "strong growth" in digital, accounting for 39 per cent of total revenues in the year to 31 March.
The Economist's non-advertising revenues now comprised 60 per cent of the total, up from 44 per cent five years ago.
However, according to Pearson, the factors, including a decline in print advertising revenues, would "likely to reduce earnings" this year from the Economist.
Book publisher Penguin, which Pearson merged with Bertelsmann-owned Random House on 1 July, posted robust first-half with revenues up 16 per cent to £513 million and adjusted operating profit up 27 per cent to £28 million.
Ebook income made up 21 per cent of Penguin's global revenue in the first half, up from 19 per cent in 2012, with the US leading the way at 33 per cent.
