Pearson Announced Board Changes And Earnings Warnings

Pearson yesterday warned that earnings per share for this year would be “modestly below the current range of outside estimates.” Whilst pre-tax profits for 1995 will exceed those of any prior year, the statement says, this is due largely to the non-operating profit on the sale of Pearson’s direct stake of 9.75% in BSkyB in September.

Reorganisation costs, up from £12m to £45m will also affect operating profits. In terms of trading, Pearson has “made excellent headway”. Television results for Grundy will exceed expectations and newspapers had a “satisfactory year”. Profits before reorganisation at the FT will be in line with 1994, despite “higher paper prices and a slightly disappointing UK advertising climate”. Operating margins at Westminster Press have doubled over the year.

Board changes to take effect next year include John Makinson, currently managing director of the FT, becoming finance director; Greg Dyke, currently chief executive of Pearson Television will join as executive director as will David Bell, chief executive of the Financial Times group. Frank Barlow will continue as managing director at least until the AGM in May 1997.