Scardino bows out of Pearson after 16 years

Marjorie Scardino, the chief executive who transformed Pearson (PSON.L) from a rag bag media and entertainment conglomerate into a global education and information provider, is to leave the company at the end of the year.

Scardino was the first woman to become chief executive of a FTSE 100 company 16 years ago. Her departure leaves women at the helm of just three companies in the index of the UK's biggest listed businesses, the others being Angela Ahrendts at fashion group Burberry (BRBY.L), Cynthia Carroll at miner Anglo American (AAL.L) and Alison Cooper at Imperial Tobacco (IMT.L).

Her decision to step down has revived uncertainty about the future of the Financial Times and Penguin books, which do not sit comfortably in the group's strategy of focused on building online learning busineses around the world.

Her successor is John Fallon, who has been chief executive of Pearson's rapidly growing international education division since 2008 and who is viewed as not so attached to the group's non-education assets. In a video interview released by the company he described them as 'valuable and highly valued parts of Pearson'.

Pearson shares dropped 7p or 0.6% to £12.30 at the news. Although there has been speculation about when Scardino, 65, would step down, the announcement did come as a surprise.

Ian Whittaker, analyst at Liberum Capital, reiterated his 'sell' stance on the group, linking the announcement to Pearson's difficulties in its US education business, which has been hit by government spending cuts. 'We think Marjorie Scardino may be exiting while the going is good - possibly a harsh verdict but our view is that, if the turnaround was close, MS would be staying to see it through,' he said in a note to clients.

Whittaker is one of only two analysts saying 'sell' matched by two saying 'buy' and the majority sitting on the fence with 'hold', although slightly more rate the stock as 'outperform' than put it down as 'underperform', according to Reuters data.

Pearson paid tribute to Scardino pointing out that during her tenure sales had trebled to nearly £6 billion and that profits had more than trebled to £942 millionin 2011. 'At a time of profound change in the media and publishing industries, she has overseen the successful movement of the company from traditional print publishing businesses to digital and services businesses. This year, Pearson expects to generate more than half its revenues from digital and services business for the first time in its history.'

Chairman Glen Moreno said Scardino had told him of her wish to leave earlier in the year. He said the company had considered external candidates but that Fallon had been the obvious choice given his achievement in expanding the education business into emerging markets such as Brazil, China and sub-Saharan Africa.

Pearson fell out of Citywire Top Stocks after it slipped out of the top holdings in Nigel Thomas's AXA Framlington UK Select Opportunities fund. However, it remains popular with investors and is held by the Invesco Perpetual Global Equity Income fund run by Citywire A-rated Paul Boyne, as well as investment trusts such as Finsbury Growth & Income , managed by Nick Train, and Murray Income run by Charles Luke. The shares are up just 1.5% this year but have risen by 125% in the past 10 years.

US jobs growth offsets Spanish fears

On the broader markets the FTSE 100 closed 19 points or 0.3% up at 5,829 after a positive start on Wall Street following better than expected jobs figures.

The S&P 500 added five points or 0.4% to 13,532 after the ADP report showed the US added 162,000 private sector jobs last month, strengthening a feeling that the US economy is gradually recovering. Federal Reserve chairman Ben Bernanke has pledged to keep 'printing' money to stimulate the economy until there is a significant decline in unemployment. However, key to sentiment is the government jobs data due on Friday.

The non-manufacturing ISM index provided further comfort as it rose to 55.1 in September from 53.7 in August, its highest level since March. As with all these indices any reading over 50 is positive and shows growth. BNP Paribas said the figure was another sign that the economic weakness over the summer had run its course, although it cautioned that surveys like this had been volatile of late.

The dollar gained on currency markets with the pound falling 0.3% to $1.6077 and the euro declining 0.11% to $1.2905 against the greenback. The euro also fell against the pound to trade at 80.28p.

In Europe the Euronext 100 dipped a point to 652 amid continuing uncertainty over whether Spain will ask for a bailout and kick start bond purchases by the European Central Bank.