Evidence of the improvements being made at Lucas should be revealed in today’s interim results

Evidence of the improvements being made at Lucas should be revealed in today’s interim results.Some analysts believe that Mr Simpson’s inside knowledge of BAe, a long- rumoured GEC bid target, was a key to his appointment. It is possible that GEC may have to buy out the remainder of Mr Simpson’s Lucas contract.GEC has consistently underperformed the market in recent years, and investors have long wanted a new managing director to re-energise the diverse group. One GEC insider said: “There has been a lot of marking time around here while we wait for things to change at the top.”Although Mr Simpson has been the frontrunner to succeed Lord Weinstock, his appointment is not without its critics who consider that he may find the transition from the motor industry difficult. Lord Weinstock, 71, will stay on as honorary chairman, an appointment that was greeted with a mixed response from analysts who fear he may be tempted to interfere.
But Mr Simpson, 53, whose Lucas contract does not expire until March 1997, is thought to have secured assurances from the GEC board about his right to manage.Lord Weinstock’s role will be a non-board post, though the company said GEC would “have available the benefit of his long experience and profound knowledge of the company.”In a short statement GEC said that Mr Simpson would join “as soon as he is free to take up the appointment”, giving Lucas time to find a replacement to ensure an orderly transition.Speculation about Mr Simpson’s future has been a cloud over Lucas’s shares and is likely to remain so until uncertainty about his successor is clarified, analysts believe.

GEC yesterday ended months of speculation by announcing that George Simpson, the Lucas chief executive, would replace Lord Weinstock, who has ruled the defence and electronics giant for 33 years. Lazard Brothers, the investment bank, also turned in a superior performance, and stands to do even better this year once it takes in fees due on its work for Granada on the pounds 3.8bn Forte bid.Mr Barlow said that future acquisitions were likely to come in the television and media sectors, where management attention has been concentrated in recent years.A recent restructuring has led to firmer lines of management control and the appointment to the main board of key executives, including Mr Dyke from Pearson Television and John Makinson, formerly managing director of the Financial Times, who replaces James Joll as group financing director on 1 April.Mr Barlow dismissed reports, first published in the Independent, that Granada had contemplated a break-up bid for Pearson last year.. The company has hired the consultants McKinsey to undertake a review of the operations and recently announced the appointment of John Moore, formerly head of Penguin US, as chief executive.The losses were linked in part to a high rate of return in the new year of product shipped in December for the all-important Christmas season.”What we must do now is a detailed market study to decide where we should concentrate,” Mr Barlow said.The company’s television operations, which include Thames Television and Grundy Worldwide, the independent producers, both performed strongly. Despite criticism last year of the pounds 175m paid for Grundy, Greg Dyke, chief executive of Pearson Televison, told analysts that the acquisition had been a great success.Westminister Press, the company’s regional publishing arm, was also a bright spot, helped by a cost-cutting programme.

It’s got some tremendous brands and you can see those shining through.”But other analysts were concerned about the losses of pounds 6.9m at Mindscape, the US publisher of games and “infotainment” titles on CD-Rom, cartridges and floppy discs, bought for pounds 312m nearly two years ago.Last December, the company warned analysts that operating profits would be down year-on-year in 1995, although no mention was made of Mindscape.”Clearly, the results at Mindscape are unacceptable,” Frank Barlow, chief executive, said. Henderson Crosthwaite reiterated yesterday its breakup estimate of pounds 9 a share.Analysts were of mixed view on the results Neil Blackley, at Goldman Sachs, said: “I like the company. “These are two separate markets, and we believe they should be considered separately,” he said.”Only commercial television can deliver mass audiences, while cable and satellite can address narrow markets.”. Pearson, the media, publishing and leisure company, yesterday failed to shed its reputation as a potential takeover target, unveiling mixed results from its range of publishing, entertainment and television assets.

Despite posting pre-tax profits up 23 per cent to pounds 365.1m in 1995, the company, publishers of the Financial Times and a leading television programmer, detailed unexpected losses at its US CD-Rom publisher, Mindscape. It also had to rely on an extraordinary profit of pounds 131m from its sale last year of a stake in BSkyB, the satellite broadcaster, to shield a 5 per cent drop in its underlying performance.
The shares rose 7p on the day, to close at 664p. A shortlist of two candidates is currently being reviewed internally, and it is expected that Duncan Lewis, formerly chief executive of Mercury Communications, the telephone company, will be named to the position.Granada, which operates ITV licences Granada and LWT, also holds 25 per cent of Yorkshire-Tyne Tees, the ITV franchise holder, and is a large supplier of programming for the ITV network. It earned profits of pounds 140m last year from its television operations.Charles Allen, chief executive-designate of the company, said in an exclusive interview that “television is clearly a priority for us now. It’s inherently a good business and highly cash-generative”.He added that the joint venture with BSkyB was a natural route for expansion.