At its annual general meeting later today, Pearson plc, the international media company, will provide an update on current trading and announce two new board appointments.
In the first four months of the year, trading has been in line with the guidance we gave on March 4 at our 2001 results presentation. Although we generate most of our revenues and almost all of our profits in the second half of the year, the prospects of a significant recovery in adjusted earnings per share this year continue to be good. We are benefiting from lower operating costs in our internet enterprises and are on track to hit our breakeven targets. All our businesses are delivering strong competitive performances in their markets.
In US school publishing, we are performing well in our major state adoptions. The school software market remains sluggish, but our testing and assessment business continues to grow, helped by the fact that NCS Pearson, with its partner ETS, has been selected as the winning bid for a major testing contract in California. Our US college business has also made a good start to the year. In our US professional operations, we see little sign of recovery in corporate training or technology publishing, but we do expect strong revenue growth due to the new federal contracts we announced in March. Outside the US, technology publishing sales are, as expected, also down on the same period last year, but this is being largely offset by the strength of our school and college publishing in Asia.
Across the Financial Times group, advertising revenues are significantly lower than in the same period last year, but in line with our expectations. Our business newspapers will benefit this year from actions taken in 2001 to reduce operating costs. Interactive Data Corporation is on track for another year of good revenue and profit growth.
The Penguin group, including Dorling Kindersley, is also performing in line with expectations. Both Penguin Putnam and Penguin UK titles are featuring prominently on the bestseller lists, although, as we indicated in March, this year’s release of new titles is more heavily weighted to the second half of the year.
John Makinson, Pearson finance director since March 1996 and chairman of the Penguin group since May last year, is to become Penguin's full-time chairman and CEO from June 1 this year. David Wan, president of the Penguin group, will leave the company in June to take up a new role as chief executive of Harvard Business School Publishing. Rona Fairhead, deputy finance director, will succeed John Makinson as finance director. Peter Jovanovich, chairman and CEO of Pearson's education operations, and Rona Fairhead will join the Pearson plc board on June 1.
Marjorie Scardino, chief executive of Pearson, said:
"We have made a good start to 2002 and, despite the difficult economic climate, we are confident we can produce good earnings growth this year. Over the past five years, we have reshaped Pearson into a company of first-rank businesses that belong together. With the appointments we are making today, we have the management team to make the most of the combination while continuing to operate each business at the top of its form.
"As finance director, John has been central to everything we’ve done at Pearson over the past five years. He will be every bit as effective in his new role. We recruited Rona with this day in mind. John is a tough act to follow but I believe that she is one of the few people who can do it. She is already leading the drive to improve our use of capital and helping us to achieve our performance goals. Peter Jovanovich has huge experience in the world of education. He has been crucial in our operating success and he’ll now be a great asset to our board.”
- Pearson’s AGM takes place today at the Queen Elizabeth II Conference Centre, Broad Sanctuary, London SW1P 3EE at 12 noon.
- Video interviews with Marjorie Scardino, John Makinson and Rona Fairhead are now available at www.pearson.com.
- Photographs of Pearson’s directors are available for the media at www.newscast.co.uk.
- Rona Fairhead
Rona came to Pearson in October 2001 as deputy finance director and a member of the Pearson management committee. She joined Pearson from ICI, where she had worked since 1996, becoming executive vice president, group control and strategy (and a member of the executive committee) in 1998. Prior to joining ICI, she worked for Bombardier Inc for seven years in a number of finance, strategy and operational roles, including two years as CEO of Bombardier’s UK aerospace services division. Rona, aged 40, has an MBA from Harvard Business School and, earlier in her career, worked at Bain & Co., the management consultancy.
- John Makinson
John became Pearson’s finance director and joined its board in March 1996. From 1994 to 1996, he was managing director of the Financial Times, and prior to that he founded and managed the investor relations firm Makinson Cowell. From 1986 to 1989 he spent three years in New York as Vice Chairman of Saatchi and Saatchi’s US operations. He started his career as a journalist with Reuters, before joining the Financial Times where he wrote and edited the Lex column. John, aged 47, was appointed chairman of the Penguin group in May 2001. He is also a non-executive director of George Weston Limited in Canada.
- Peter Jovanovich
Peter was appointed chairman and CEO of Pearson’s education business in 1997. He has led the integrations of Simon & Schuster’s educational publishing operations (in December 1998) and NCS (in September 2000) to create the world’s largest education company. He began his career in publishing in 1972 as a college sales representative for Macmillan and in 1977 became head of its trade division. Peter, aged 53, joined Harcourt Brace Jovanovich in 1980, and succeeded his father as President and CEO in 1989. In 1992, he joined McGraw-Hill as CEO of its school publishing business and was appointed President of its Educational and Professional Group in 1995.
- The Pearson plc board (from June 1, 2002)
Chairman: Dennis Stevenson Executive Directors: Marjorie Scardino, CEO; David Bell, chairman, Financial Times group and director for people; Rona Fairhead, finance director; Peter Jovanovich, chairman and CEO, Pearson Education; John Makinson, chairman and CEO, Penguin Group.
Non-executive Directors: Terry Burns, Patrick Cescau, Reuben Mark, Vernon Sankey, Rana Talwar.
Except for the historical information contained herein, the matters discussed in this press release include forward-looking statements that involve risk and uncertainties that could cause actual results to differ materially from those predicted by such forward-looking statements. These risks and uncertainties include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in the company’s publicly-filed documents, including the company’s Annual Report on form 20-F. The company undertakes no obligation to publicly update any forward looking statement, whether as a result of new information, future events or otherwise.
John Fallon/ Luke Swanson + 44 (0) 20 7010 2310