Pearson attacks Apple over new subscription policy
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Your support makes all the difference.Pearson, the owner of the Financial Times and Penguin, yesterday hit out at Apple's controversial changes to its subscription policy, slamming its plans to block sharing of customer data.
Dame Marjorie Scardino, chief executive of Pearson, said she was "unclear" how Apple's plan to take a 30 per cent cut of magazine and newspaper subscriptions would work, adding: "We are still talking to them."
A significant sticking point, she said, is Apple's decision not to share customer data. She said that if the position on the data did not change "maybe we will get it somewhere else".
The comments came as the company revealed a robust performance in 2010 with pre-tax profits up 28 per cent to £670m over the previous year, saying there was growth across its different operations. About 80 per cent of the profits now come from its education business.
Despite potential threats to the education market as governments tighten their purse strings, Dame Marjorie said the company was well positioned. "All indications are that we can sustain our growth," she said. "We have a lot of ideas. We are ready for the future."
Pearson completed a series of deals in 2010, and said its war chest remained in tact to hit the acquisition trail again this year. The group also slashed its debt to £430m in 2010 from £1.1bn following the sale of International Data Corporation and raised its dividend by almost a tenth to 38.7p.
Penguin's operating profit rose a quarter to £106m as sales of ebooks rose, but the company said the market for physical books remained challenging. Dame Marjorie said that at the end of the financial year there would be fewer printed books than last year. The division was boosted by bestsellers including Jamie's 30 Minute Meals.
Profits at the FT group rose 54 per cent to £60m thanks to good advertising growth and a rise in print and digital circulation.
Pearson's lawyers are currently working out what the UK's freezing order on Libyan assets means for the company. The Libyan InvestmentAuthority has a 3 per cent holding in the group, and the company is "uncomfortable" about the investment. "We are in a terrible position," Dame Marjorie said. "This is abhorrent to everyone in Pearson."
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