24 July
2020
|
Significant disruption due to COVID-19, June showing improving
trends
|
Highlights
|
Underlying revenue down 17% on prior year largely due to
COVID-19
● Group sales decline
largely reflects test centre and school closures in Global
Assessment and International. After deterioration from March to May
we saw improving sales trends in June.
● Global Online
Learning sales grew 5% due to strong enrolments in new and existing
schools in Virtual Schools and slight revenue growth in OPM with
good growth in continuing programs offset by discontinued
programs.
● Global Assessment
declined 27% due to the impact of test centre closures in
Professional Certification (Pearson VUE), cancellation of spring
testing in Student Assessment and school closures impacting
Clinical Assessments.
● North American
Courseware declined 14% with US Higher Education Courseware
declining in line with expectations due to
the continuation of
trends seen in 2019, and a modest impact from the closure of
campus-based bookstores. We saw a weaker
performance in courseware in Canada largely as a result of school
and bookstore closures.
● International
declined 23% due to the disruption in businesses which rely on
physical locations including school and test centre
closures.
Adjusted operating loss of £(23)m with COVID-19 impact
partially offset by cost savings
● Adjusted operating
profit declined £167m to a loss of £(23)m (H1 2019:
£144m) with a profit impact of c.£140m from COVID-19
trading pressures after cost mitigations. There was an expected
trading decline of £20m, with impact from inflation of
£15m, other operating factors of £15m, disposals of
£14m partially offset by restructuring savings of £35m
and FX of £2m.
Strong balance sheet with H1 net debt at £982m (H1 2019:
£1,376m) including leases of £662m
● Interim dividend
6.0p (H1 2019: 6.0p).
● Available liquidity
of approximately £1.6bn at the end of the
period.
Statutory results
● Sales decreased by
18% or £337m in headline terms due to trading and disposals
partially offset by FX.
● Statutory operating
profit from continuing operations was £107m in the first half
of 2020 (H1 2019: £37m) with adjusted operating profit impact
offset by profit on disposal of Penguin Random House and reduced
restructuring costs.
● Statutory EPS 6.3p
(H1 2019: 6.1p).
Strategic progress
● In Virtual Schools
we saw a 61% increase in applications for the 2020/2021 academic
year compared to the first half last year.
● Growth in the VUE
Online Proctoring offering, where testing volumes grew to 580,000
compared to 66,000 in H1 2019.
● In OPM, in H1
improving learner net promoter scores (NPS) are leading to higher
retention rates. We are in discussion with some of our biggest
university partners about the integration of Pearson courseware and
other assets, to deliver continuing improvements in the learning
experience. We are investing in the digitisation of recruitment and
enrolment processes which are starting to deliver productivity
gains. Applications for continuing courses in OPM are up
significantly versus H1 last year.
● We are working
towards a Fall release of Pearson Pathways, an engine to help
learners understand the skills they need for the job they want and
recommend the right courses and credentials.
● The digital roadmap
is on track with the launch of additional Revel titles on the
Pearson Learning Platform (PLP) for back to school, enhancing the
faculty and student experience. We are also launching a
direct to learner storefront offering that will enable learners to
easily find, subscribe to, and access their digital texts directly
from Pearson.
● We have accelerated
the shift to digital in Higher Education Courseware with digital
registrations including eBooks up by 5% showing signs of secondary
market recapture.
● Our recently
completed simplification programme has enabled the identification
of a further c.£50m of cost savings to be realised in 2021
through further cost efficiencies.
2020 outlook - anticipate recovery but uncertainty
remains
● Global Online
Learning - will benefit from higher Virtual Schools revenue
following strong growth in applications with OPM in line with
expectations.
● Global Assessment -
Pearson VUE recovery is expected through the delivery of pent-up
demand, assuming test centres remain open; potential further modest
impact in H2 for US Student Assessment and US Clinical
Assessment.
● North American
Courseware - continuing print declines and modest digital growth,
uncertainty on enrolments, and school closures which could impact
our Advanced Placement sales.
● International - H2
is expected to recover as lockdowns ease and schools, private
language schools and test centres reopen. The UK Government has now
approved Pearson to open bookings and start delivering Secure
English Language Tests (SELT) for UK Visas & Immigration
(UKVI).
● We now expect our
full year net interest charge to be c.£60m after issuing a
10-year Education Bond of £350m in June
2020.
● At this stage, it
remains difficult to predict the ultimate disruptive impact of the
COVID-19 pandemic on Pearson's performance for the full year.
However, the second quarter performed in line with our expectations
and, while risks remain, particularly around enrolments in the
back to school period and local lockdowns impacting schools
reopenings, based on our current assessment of these trends we are
on track to deliver adjusted operating profit broadly consistent
with market expectations.
|
Financial summary
|
|
|
|||||
£m
|
H1 2020
|
H1
2019
|
Headline
growth
|
CER
growth
|
Underlying
growth
|
||
Business performance
|
|
|
|
|
|
||
Sales
|
1,492
|
1,829
|
(18)%
|
(20)%
|
(17)%
|
||
Adjusted
operating (loss)/profit
|
(23)
|
144
|
(116)%
|
(117)%
|
(119)%
|
||
Operating
cash flow
|
(214)
|
(129)
|
|
|
|
||
Adjusted
(loss)/earnings per share (basic)
|
(5.1)p
|
13.2p
|
|
|
|
||
Dividend
per share
|
6.0p
|
6.0p
|
|
|
|
||
Net
debt
|
(982)
|
(1,376)
|
|
|
|
||
Statutory results
|
|
|
|
|
|
||
Sales
|
1,492
|
1,829
|
|
|
|
||
Operating
profit
|
107
|
37
|
|
|
|
||
Cash
used in operations
|
(117)
|
(117)
|
|
|
|
||
Basic
earnings per share
|
6.3p
|
6.1p
|
|
|
|
Investor Relations
|
Jo
Russell
Anjali
Kotak
|
+44
(0) 7785 451 266
+44
(0) 7802 890 724
|
Media
|
Tom
Steiner
Gemma
Terry
|
+44
(0) 7787 415 891
+44
(0) 7841 363 216
|
Brunswick
|
Charles
Pretzlik, Nick Cosgrove, Simone Selzer
|
+44
(0) 207 404 5959
|
Webcast details
|
Pearson’s
results presentation for investors and analysts will be audiocast
live today from 0830 (BST) via www.pearson.com.
Audience
URL:
https://www.speakservecloud.com/register-for-call/778920eb-312b-458a-b95e-9fa068d64e3d
|
Financial overview
|
Profit & loss statement. Pearson’s sales decreased
by 18% in headline terms to £1,492m (H1 2019: £1,829m)
with portfolio adjustments reducing sales by £53m, and
currency movements increasing revenue by £25m. Stripping out
the impact of portfolio changes and currency movements, revenue was
down 17% in underlying terms due to 5% growth in Global Online
Learning, more than offset by a 27% decline in Global Assessment, a
23% decline in our International segment and a 14% decline in North
American Courseware. COVID-19 impacted sales by c.£260m in the
period. After deterioration from March to May we saw improving
sales trends in June. Underlying sales for the month of April
declined 35% versus April 2019, with a decline of 32% in May and
19% in June.
Adjusted
operating profit declined to a loss of £(23)m (H1 2019:
£144m) with a profit impact of c.£140m from COVID-19
trading pressures after cost mitigations. There was an expected
trading decline of £20m, with impact from inflation of
£15m, other operating factors of £15m, disposals of
£14m partially offset by restructuring savings of £35m
and FX of £2m.
Net
interest payable to 30 June 2020 was £27m (H1 2019:
£18m). The increase is mainly due to interest on tax, with
credits recorded in 2019 not being repeated in 2020.
Our
adjusted tax benefit was £11m (H1 2019: charge of
£23m).
Adjusted
losses for the period were £(39)m (H1 2019: earnings of
£102m) and adjusted losses per share were (5.1)p (H1 2019:
earnings of 13.2p).
Cash generation. Net cash used in operations was £117m
in both 2019 and 2020, with higher operating cash outflow
offsetting lower restructuring costs paid. Operating cash
outflow increased by £85m from £129m in 2019 to
£214m. This increase is largely due to lower adjusted
operating profit partly offset by reduced bonus
payments.
Statutory results. Our statutory operating profit of
£107m in H1 2020 compares to a profit of £37m in H1 2019,
the increase was largely due to the gain on sale of Penguin Random
House.
Capital allocation. Our disciplined approach to capital
allocation and to maintaining a strong balance sheet will play a
major part in driving long-term growth. We will create further
value through investing in the business, whilst being disciplined
about returns on investment, delivering a sustainable and
progressive dividend and returning any surplus cash to our
shareholders.
Balance sheet. H1 net debt at £982m
(H1 2019: £1,376m) including leases of
£662m.
Dividend. In line with our policy, the Board is declaring an
interim dividend of 6.0p (2019: 6.0p) payable on 21 September
2020.
|
£ millions
|
H1 2020
|
H1
2019
|
Headline
growth
|
CER
growth
|
Underlying
growth
|
Sales
|
|
|
|
|
|
Global
Online Learning
|
316
|
288
|
10%
|
6%
|
5%
|
Global
Assessment
|
397
|
525
|
(24)%
|
(27)%
|
(27)%
|
North
American Courseware
|
375
|
475
|
(21)%
|
(24)%
|
(14)%
|
International
|
404
|
541
|
(25)%
|
(23)%
|
(23)%
|
Total sales
|
1,492
|
1,829
|
(18)%
|
(20)%
|
(17)%
|
|
|
|
|
|
|
Adjusted operating (loss)/profit
|
|
|
|
|
|
Global
Online Learning
|
24
|
41
|
(41)%
|
(44)%
|
(41)%
|
Global
Assessment
|
71
|
174
|
(59)%
|
(61)%
|
(61)%
|
North
American Courseware
|
36
|
28
|
29%
|
21%
|
(11)%
|
International
|
46
|
120
|
(62)%
|
(60)%
|
(60)%
|
Enabling
Functions
|
(201)
|
(244)
|
18%
|
19%
|
19%
|
Penguin
Random House
|
1
|
25
|
(96)%
|
(96)%
|
-
|
Total adjusted operating (loss)/profit
|
(23)
|
144
|
(116)%
|
(117)%
|
(119)%
|
Global Online Learning (21% of revenue)
|
|
Underlying
revenue in Global Online Learning grew 5% due to strong enrolments
in new and existing schools in Virtual Schools and slight revenue
growth in OPM, with good growth in continuing programs offset by
discontinued programs. Headline revenue grew 10% due to FX and the
acquisition of Lumerit.
Adjusted
underlying and headline operating profit declined 41% due to sales
growth more than offset by the investment in our Virtual Schools
learning platform and enrolment and customer care support and
margin impact in OPM due to discontinued programs, severance as we
digitise our recruitment and enrolment processes, and investment in
new programs.
|
|
Virtual Schools
|
In
Connections Academy, our Virtual Schools business, revenue grew
strongly due to growth in enrolments in existing and new schools.
We have seen a surge in applications, up 61% in the first half
compared to 2019, as many explore full time digital learning for
the first time. We expect a portion of these applications to
translate into increased enrolments for the 2020/2021 school year.
Pearson is well placed to benefit from the increased interest in
and appetite for online learning. We are increasing the capacity in
our existing schools as well as seeing potential interest from new
states which have not previously considered virtual schooling as a
choice for students.
Three
new full-time online, state-wide partner schools will open in the
2020-21 school year. Combined with two contract exits this will
bring the total partner schools to 43 in 29 states. Additionally,
the online private school, Pearson Online Academy continues to
serve students across the globe.
|
Online Program Management
|
In
Online Program Management, revenue grew slightly. As detailed in
our full year results, we have deliberately slowed the rate of
growth in this business in order to transition to a new operating
model. Overall course enrolments declined by 12% at the half year
with strong enrolment growth in undergraduate and international
markets and good enrolment growth in postgraduate more than offset
by discontinued programs. Student numbers increased 17% excluding
discontinued programs and declined 5% including discontinued
programs.
In H1,
improving learner net promoter scores (NPS) are leading to higher
retention rates. We are in discussion with some of our biggest
university partners about the integration of Pearson courseware and
other assets, to deliver continuing improvements in the learning
experience. We are investing in the digitisation of recruitment and
enrolment processes which are starting to deliver productivity
gains. Applications for courses in OPM are up significantly versus
half year last year.
We
continue to refine our portfolio and focus on programs linked to
employability. At the half year we have launched 52 new programs
and discontinued 20 programs and have a total of 33 partners and
418 programs globally.
With
growing demand from universities to support online learning and
unemployment rising rapidly, we are launching a range of
initiatives that provide learners with high quality, flexible and
affordable options to acquire new skills and knowledge that will
enhance their employability.
This
includes the May launch of UK Learns - an online portal which
contains free, digital, skills-based courses to help re-skill and
broaden employability prospects for employees who have been
impacted by COVID-19. Building on the launch of UK Learns, we are
working towards a Fall release of Pearson Pathways, an engine to
help learners understand the skills they need for the job they want
and recommend the right courses and credentials. It will serve as
the umbrella platform for our premier degree and alternative
credential offerings, enabling learners to find the right certified
learning pathways and degrees for them.
|
|
|
Global Assessment (27% of revenue)
|
|
Underlying
revenue declined 27% due to COVID-19 with a similar performance
across all three divisions. Headline revenue declined slightly less
at 24% due to FX.
Adjusted
operating profit declined 61% on an underlying basis and 59% in
headline terms due to the COVID-19 impact on trading, partially
offset by mitigating actions.
|
|
US Student Assessment
|
In Student Assessment, revenue declined with the cancellation of
spring 2020 testing, impacting adjusted operating profit by
£20m in the first half after mitigating actions.
Student Assessment won new contracts or signed renewals in several
key incumbent states including Arizona, Minnesota, New Jersey,
Tennessee and Virginia, as well as with the District of Columbia
and Puerto Rico which will benefit us in 2021.
|
Pearson VUE
|
In Pearson VUE, underlying revenue declined as a result of the
COVID-19 outbreak leading to the closure of test centres from
March, with most centres being reopened to all customers by the end
of May but at reduced capacity to enable social distancing,
offering longer hours to recover pent-up demand. The closures
impacted H1 adjusted operating profit by £74m after mitigating
actions.
We worked with clients who were able to take advantage of our VUE
Online Proctoring offering, where testing volumes grew to 580,000
compared to 66,000 in H1 2019. There was particularly strong uptake
in our IT segment where total volumes were up 20% on H1
2019.
In H1, Pearson VUE continued to win new business remotely, signing
22 new agreements as well as renewing 38 existing
contracts.
|
US Clinical Assessment
|
In Clinical Assessment, revenue declined as a result of school
closures and disruption in the delivery of routine medical
procedures, partially mitigated by an increase in use of our
telepractice digital service, supported by a 33% increase in the
number of users accessing our Q-interactive digital
platform.
|
North American Courseware (25% of revenue)
|
|
Underlying
revenue declined 14% with an expected decline in US Higher
Education Courseware due to the continuation of trends seen in
2019, and a modest impact from the closure of campus-based
bookstores. Revenue also declined in courseware in Canada largely
as a result of school and bookstore closures. Headline revenue
declined 21% due to this and the disposal of our US K12 courseware
business in 2019 partially offset by FX.
Adjusted
operating profit declined 11% on an underlying basis due to the
impact of trading partly offset by restructuring and discretionary
savings. Adjusted operating profit grew 29% on a headline basis
mainly due to the disposal of our US K12 courseware business in
2019.
|
|
US Higher Education Courseware
|
US
Higher Education Courseware declined in line with expectations in
the first half due to the continuation of trends seen in US Higher
Education in 2019, including further expected declines in print
revenue, and a modest impact from the closure of campus -based
bookstores and schools. Product returns are trending lower, in line
with our expectations.
The
pandemic has accelerated trends in moving to digital and
subscription models. Although the first half is a smaller part of
the business, we saw a 5% increase in digital registrations
including eBooks. Digital sales increased slightly on a net actual
basis as demand for higher priced print product shifts to more
affordable digital options.
We
continue to make good progress with our strategy of shifting from
ownership to access, signing 94 new institutions in Inclusive
Access in the first half of the year. This takes the total number
of not for profit institutions signed to 873 with Inclusive Access
sales up by c.28% from H1 2019.
In the
seasonally weighted second half of the year, we expect trends seen
in 2019 to continue with further unbundling of packages, growth in
digital volumes and later purchase of product as we move to a
digital first model for back to school 2020. Uncertainty remains
around college enrolments, and school closures which could also
impact our Advanced Placement sales.
Our PLP
development and digital roadmap are on track for a Fall back to
school launch of a direct to learner storefront offering that will
enable learners to easily find, subscribe to, and access their
digital texts directly from Pearson. Additionally, we will launch
feature improvements and additional titles to our Revel product
that will enable educators to organise their classes and receive
insights about students' progress whilst also providing students
with an improved learning experience.
|
|
|
International (27% of revenue)
|
|
Underlying
revenue declined 23% and 25% in headline terms due to school and
test centre closures impacting trading across our markets in the
UK, APAC, Continental Europe, Latin America, China and India, and
Middle East and Africa.
Adjusted
operating profit declined 60% in underlying terms and 62% in
headline terms due to the impact of trading partially offset by
mitigating actions.
|
|
School & HE Courseware
|
School
& HE courseware underlying sales were down significantly due to
school and bookstore closures impacting purchases across Greater
China, APAC and Middle East as well as in the wider
markets.
|
Assessment
|
In the
UK, qualifications revenue was down with a modest impact on
operating profit due to the cancellation of GCSE, A level and
vocational exams, as well as the end of the NCT contract, partially
offset by underlying price and volume growth.
Clinical
Assessment declined due to the impact of social distancing and
lockdown measures on face-to-face assessments in
Europe.
|
English
|
Pearson
Test of English volumes were down 43% due to the closure of testing
centres across key markets from March. In May, centres began
reopening with reduced capacity and June bookings showed signs of
recovery. The UK Government has now approved Pearson to open
bookings and start delivering Secure English Language Tests (SELT)
for UK Visas & Immigration (UKVI).
English
Courseware declined significantly, largely due to the temporary
closure of private language schools in Greater China as well as
across other markets. In some markets these schools have started to
reopen.
In
Brazil, English Services were substantially down as the English
Language School franchise premises were closed and enrolments
impacted, however the business quickly switched to offering virtual
classes.
|
School & HE
Services
|
School
services were down slightly due to our Sistemas business in Brazil,
where schools were closed from March through June, with June
showing a slight recovery.
In
South Africa, HE services revenue declined slightly as the
temporary closure of Pearson Institute of Higher Education was
mitigated by conversion to online teaching, with students able to
continue their studies virtually.
|
Enabling Functions
|
|
Enabling
Functions costs are 18% lower in headline terms and 19% in
underlying terms due to restructuring and discretionary
savings.
|
|
Penguin Random House
|
|
On 1
April 2020, Pearson completed the sale of its remaining 25% in
Penguin Random House for £531m to Bertelsmann SE & Co
KGaA.
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Operating
profit
|
|
107
|
37
|
275
|
Add
back: Cost of major restructuring
|
|
-
|
64
|
159
|
Add
back: Intangible charges
|
|
51
|
49
|
163
|
Add
back: Other net gains and losses
|
|
(181)
|
(6)
|
(16)
|
Adjusted
operating (loss) / profit
|
|
(23)
|
144
|
581
|
|
|
|
|
|
all figures in £ millions
|
note
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
Sales
|
2
|
1,492
|
1,829
|
3,869
|
Cost of
goods sold
|
|
(848)
|
(904)
|
(1,858)
|
Gross
profit
|
|
644
|
925
|
2,011
|
|
|
|
|
|
Operating
expenses
|
|
(720)
|
(912)
|
(1,806)
|
Other
net gains and losses
|
2
|
181
|
6
|
16
|
Share
of results of joint ventures and associates
|
|
2
|
18
|
54
|
Operating
profit
|
2
|
107
|
37
|
275
|
|
|
|
|
|
Finance
costs
|
3
|
(88)
|
(46)
|
(84)
|
Finance
income
|
3
|
16
|
22
|
41
|
Profit
before tax
|
4
|
35
|
13
|
232
|
Income
tax
|
5
|
13
|
35
|
34
|
Profit
for the period
|
|
48
|
48
|
266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the company
|
|
48
|
47
|
264
|
Non-controlling
interest
|
|
-
|
1
|
2
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (in pence per
share)
|
|
|
|
|
Basic
|
6
|
6.3p
|
6.1p
|
34.0p
|
Diluted
|
6
|
6.3p
|
6.1p
|
34.0p
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Profit
for the period
|
|
48
|
48
|
266
|
|
|
|
|
|
Items
that may be reclassified to the income statement
|
|
|
|
|
Net
exchange differences on translation of foreign
operations
|
|
154
|
25
|
(115)
|
Currency
translation adjustment on disposals
|
|
(70)
|
4
|
4
|
Attributable
tax
|
|
|
(1)
|
5
|
|
|
|
|
|
Items
that are not reclassified to the income statement
|
|
|
|
|
Fair
value gain on other financial assets
|
|
-
|
18
|
20
|
Attributable
tax
|
|
(2)
|
(3)
|
(4)
|
|
|
|
|
|
Remeasurement of
retirement benefit obligations
|
|
4
|
(141)
|
(149)
|
Attributable
tax
|
|
(1)
|
23
|
22
|
Other
comprehensive income / (expense) for the period
|
|
85
|
(75)
|
(217)
|
|
|
|
|
|
Total
comprehensive income / (expense) for the period
|
|
133
|
(27)
|
49
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the company
|
|
133
|
(28)
|
47
|
Non-controlling
interest
|
|
-
|
1
|
2
|
|
|
|
|
|
all figures in £ millions
|
note
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Property, plant and
equipment
|
|
637
|
642
|
618
|
Intangible
assets
|
11
|
3,008
|
3,062
|
2,900
|
Investments in
joint ventures and associates
|
|
6
|
426
|
7
|
Deferred income tax
assets
|
|
56
|
65
|
59
|
Financial assets
– derivative financial instruments
|
|
47
|
59
|
29
|
Retirement benefit
assets
|
|
438
|
433
|
429
|
Other financial
assets
|
|
133
|
118
|
122
|
Trade and other
receivables
|
|
312
|
422
|
313
|
Non-current
assets
|
|
4,637
|
5,227
|
4,477
|
|
|
|
|
|
Intangible assets
– pre-publication
|
|
917
|
834
|
870
|
Inventories
|
|
174
|
212
|
169
|
Trade and other
receivables
|
|
1,087
|
1,273
|
1,275
|
Financial assets
– derivative financial instruments
|
|
15
|
2
|
25
|
Cash and cash
equivalents (excluding overdrafts)
|
|
687
|
417
|
437
|
Current
assets
|
|
2,880
|
2,738
|
2,776
|
|
|
|
|
|
Assets classified
as held for sale
|
10
|
-
|
-
|
397
|
Total
assets
|
|
7,517
|
7,965
|
7,650
|
|
|
|
|
|
Financial
liabilities – borrowings
|
|
(1,550)
|
(1,869)
|
(1,572)
|
Financial
liabilities – derivative financial instruments
|
|
(65)
|
(46)
|
(24)
|
Deferred income tax
liabilities
|
|
(43)
|
(107)
|
(48)
|
Retirement benefit
obligations
|
|
(103)
|
(96)
|
(92)
|
Provisions for
other liabilities and charges
|
|
(12)
|
(17)
|
(13)
|
Other
liabilities
|
12
|
(67)
|
(134)
|
(86)
|
Non-current
liabilities
|
|
(1,840)
|
(2,269)
|
(1,835)
|
|
|
|
|
|
Trade and other
liabilities
|
12
|
(1,048)
|
(1,209)
|
(1,278)
|
Financial
liabilities – borrowings
|
|
(292)
|
(141)
|
(92)
|
Financial
liabilities – derivative financial instruments
|
|
(22)
|
(12)
|
(15)
|
Current income tax
liabilities
|
|
(83)
|
(26)
|
(55)
|
Provisions for
other liabilities and charges
|
|
(39)
|
(16)
|
(52)
|
Current
liabilities
|
|
(1,484)
|
(1,404)
|
(1,492)
|
|
|
|
|
|
Liabilities
classified as held for sale
|
10
|
-
|
-
|
-
|
Total
liabilities
|
|
(3,324)
|
(3,673)
|
(3,327)
|
|
|
|
|
|
Net
assets
|
|
4,193
|
4,292
|
4,323
|
|
|
|
|
|
Share
capital
|
|
188
|
195
|
195
|
Share
premium
|
|
2,616
|
2,610
|
2,614
|
Treasury
shares
|
|
(17)
|
(58)
|
(24)
|
Reserves
|
|
1,396
|
1,535
|
1,528
|
Total equity
attributable to equity holders of the company
|
|
4,183
|
4,282
|
4,313
|
Non-controlling
interest
|
|
10
|
10
|
10
|
Total
equity
|
|
4,193
|
4,292
|
4,323
|
|
|
|
|
|||||||
|
Equity
attributable to equity holders of the company
|
|
|
|||||||
all figures in £ millions
|
Share
capital
|
Share
premium
|
Treasury
shares
|
Capital
redemption reserve
|
Fair
value reserve
|
Translation
reserve
|
Retained
earnings
|
Total
|
Non-controlling
interest
|
Total
equity
|
|
|
|
|
|
|
|
|
|
|
|
2020
half year
|
||||||||||
At
1 January 2020
|
195
|
2,614
|
(24)
|
11
|
39
|
567
|
911
|
4,313
|
10
|
4,323
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
48
|
48
|
|
48
|
Other
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
-
|
84
|
1
|
85
|
-
|
85
|
Total
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
-
|
84
|
49
|
133
|
-
|
133
|
Equity-settled
transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
12
|
12
|
-
|
12
|
Tax on
equity settled transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Issue
of ordinary shares under share option schemes
|
-
|
2
|
-
|
-
|
-
|
-
|
-
|
2
|
-
|
2
|
Buyback
of equity
|
(7)
|
-
|
-
|
7
|
-
|
-
|
(176)
|
(176)
|
-
|
(176)
|
Purchase of
treasury shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Release
of treasury shares
|
-
|
-
|
7
|
-
|
-
|
-
|
(7)
|
-
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(101)
|
(101)
|
-
|
(101)
|
At
30 June 2020
|
188
|
2,616
|
(17)
|
18
|
39
|
651
|
688
|
4,183
|
10
|
4,193
|
|
|
|
|
|
|||||||||
|
Equity
attributable to equity holders of the company
|
|
|
|
|||||||||
all figures in £ millions
|
Share
capital
|
Share
premium
|
Treasury
shares
|
Capital
redemption reserve
|
Fair
value reserve
|
Translation
reserve
|
Retained
earnings
|
Total
|
Non-controlling
interest
|
Total
equity
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||
2019
half year
|
|
||||||||||||
At 1
January 2019
|
195
|
2,607
|
(33)
|
11
|
19
|
678
|
958
|
4,435
|
9
|
4,444
|
|||
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
47
|
47
|
1
|
48
|
|||
Other
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
18
|
29
|
(122)
|
(75)
|
-
|
(75)
|
|||
Total
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
18
|
29
|
(75)
|
(28)
|
1
|
(27)
|
|||
Equity-settled
transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
14
|
14
|
-
|
14
|
|||
Tax on
equity settled transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
(1)
|
-
|
(1)
|
|||
Issue
of ordinary shares under share option schemes
|
-
|
3
|
-
|
-
|
-
|
-
|
-
|
3
|
-
|
3
|
|||
Buyback
of equity
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||
Purchase of
treasury shares
|
-
|
-
|
(40)
|
-
|
-
|
-
|
-
|
(40)
|
-
|
(40)
|
|||
Release
of treasury shares
|
-
|
-
|
15
|
-
|
-
|
-
|
(15)
|
-
|
-
|
-
|
|||
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(101)
|
(101)
|
-
|
(101)
|
|||
At 30
June 2019
|
195
|
2,610
|
(58)
|
11
|
37
|
707
|
780
|
4,282
|
10
|
4,292
|
|
|
|
|
|||||||
|
Equity
attributable to equity holders of the company
|
|
|
|||||||
all figures in £ millions
|
Share
capital
|
Share
premium
|
Treasury
shares
|
Capital
redemption reserve
|
Fair
value reserve
|
Translation
reserve
|
Retained
earnings
|
Total
|
Non-controlling
interest
|
Total
equity
|
|
|
|
|
|
|
|
|
|
|
|
2019
full year
|
||||||||||
At 1
January 2019
|
195
|
2,607
|
(33)
|
11
|
19
|
678
|
961
|
4,438
|
9
|
4,447
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
264
|
264
|
2
|
266
|
Other
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
20
|
(111)
|
(126)
|
(217)
|
-
|
(217)
|
Total
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
20
|
(111)
|
138
|
47
|
2
|
49
|
Equity-settled
transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
25
|
25
|
-
|
25
|
Tax on
equity settled transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
(5)
|
(5)
|
-
|
(5)
|
Issue
of ordinary shares under share option schemes
|
-
|
7
|
-
|
-
|
-
|
-
|
-
|
7
|
-
|
7
|
Buyback
of equity
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Purchase of
treasury shares
|
-
|
-
|
(52)
|
-
|
-
|
-
|
-
|
(52)
|
-
|
(52)
|
Release
of treasury shares
|
-
|
-
|
61
|
-
|
-
|
-
|
(61)
|
-
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(147)
|
(147)
|
(1)
|
(148)
|
At 31
December 2019
|
195
|
2,614
|
(24)
|
11
|
39
|
567
|
911
|
4,313
|
10
|
4,323
|
|
|
|
|
|
all figures in £ millions
|
note
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
Net
cash (used in) / generated from operations
|
17
|
(117)
|
(117)
|
480
|
Interest
paid
|
|
(46)
|
(42)
|
(81)
|
Tax
received / (paid)
|
|
20
|
(8)
|
(30)
|
Net
cash (used in) / generated from operating activities
|
|
(143)
|
(167)
|
369
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
13
|
(6)
|
(5)
|
(45)
|
Additional capital
invested in associates
|
13
|
-
|
(40)
|
(40)
|
Purchase of
investments
|
|
(4)
|
(7)
|
(12)
|
Purchase of
property, plant and equipment
|
|
(30)
|
(38)
|
(55)
|
Purchase of
intangible assets
|
|
(48)
|
(57)
|
(138)
|
Disposal of
subsidiaries, net of cash disposed
|
14
|
58
|
(100)
|
(101)
|
Proceeds from sale
of joint ventures and associates
|
14
|
531
|
-
|
-
|
Proceeds from sale
of investments
|
|
-
|
2
|
5
|
Proceeds from sale
of property, plant and equipment
|
|
-
|
-
|
1
|
Lease
receivables repaid
|
|
13
|
11
|
26
|
Loans
repaid by / (advanced to) related parties
|
|
49
|
(10)
|
(49)
|
Interest
received
|
|
13
|
11
|
17
|
Investment
income
|
|
-
|
-
|
2
|
Dividends received
from joint ventures and associates
|
|
3
|
15
|
64
|
Net
cash generated from / (used in) investing activities
|
|
579
|
(218)
|
(325)
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
Proceeds from issue
of ordinary shares
|
|
2
|
3
|
7
|
Buyback
of equity
|
|
(176)
|
-
|
-
|
Purchase of
treasury shares
|
|
-
|
(40)
|
(52)
|
Proceeds from
borrowings
|
|
350
|
510
|
230
|
Repayment of
borrowings
|
|
(230)
|
(58)
|
(48)
|
Repayment of lease
liabilities
|
|
(43)
|
(49)
|
(91)
|
Dividends paid to
company’s shareholders
|
|
(101)
|
(101)
|
(147)
|
Dividends paid to
non-controlling interest
|
|
-
|
-
|
(1)
|
Net
cash (used in) / generated from financing activities
|
|
(198)
|
265
|
(102)
|
|
|
|
|
|
Effects
of exchange rate changes on cash and cash equivalents
|
|
12
|
(2)
|
(33)
|
Net
increase / (decrease) in cash and cash equivalents
|
|
250
|
(122)
|
(91)
|
|
|
|
|
|
Cash
and cash equivalents at beginning of period
|
|
434
|
525
|
525
|
Cash
and cash equivalents at end of period
|
|
684
|
403
|
434
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Sales
|
|
|
|
|
Global
Online Learning
|
|
316
|
288
|
586
|
Global
Assessments
|
|
397
|
525
|
1,031
|
North
American Courseware
|
|
375
|
475
|
1,091
|
International
|
|
404
|
541
|
1,161
|
Total
sales
|
|
1,492
|
1,829
|
3,869
|
|
|
|
|
|
Adjusted
operating profit
|
|
|
|
|
Global
Online Learning
|
|
24
|
41
|
84
|
Global
Assessments
|
|
71
|
174
|
351
|
North
American Courseware
|
|
36
|
28
|
231
|
International
|
|
46
|
120
|
299
|
Enabling
Functions
|
|
(201)
|
(244)
|
(449)
|
PRH
|
|
1
|
25
|
65
|
Total
adjusted operating (loss) / profit
|
|
(23)
|
144
|
581
|
all figures in £ millions
|
Global
Online Learning
|
Global
Assessments
|
North
American Courseware
|
International
|
Total
|
|
|
|
|
|
|
2020
half year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
-
|
-
|
80
|
141
|
221
|
Products
transferred at a point in time (other)
|
-
|
-
|
-
|
6
|
6
|
Products and
services transferred over time
|
-
|
-
|
288
|
20
|
308
|
|
-
|
-
|
368
|
167
|
535
|
Assessments
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
39
|
-
|
22
|
61
|
Products and
services transferred over time
|
-
|
358
|
-
|
164
|
522
|
|
-
|
397
|
-
|
186
|
583
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
-
|
-
|
4
|
4
|
Products and
services transferred over time
|
316
|
-
|
7
|
47
|
370
|
|
316
|
-
|
7
|
51
|
374
|
|
|
|
|
|
|
Total
sales
|
316
|
397
|
375
|
404
|
1,492
|
|
|
|
|
|
|
2019
half year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
-
|
-
|
133
|
186
|
319
|
Products
transferred at a point in time (other)
|
-
|
-
|
-
|
16
|
16
|
Products and
services transferred over time
|
-
|
-
|
335
|
30
|
365
|
|
-
|
-
|
468
|
232
|
700
|
Assessments
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
53
|
-
|
24
|
77
|
Products and
services transferred over time
|
-
|
472
|
-
|
212
|
684
|
|
-
|
525
|
-
|
236
|
761
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
-
|
-
|
11
|
11
|
Products and
services transferred over time
|
288
|
-
|
7
|
62
|
357
|
|
288
|
-
|
7
|
73
|
368
|
|
|
|
|
|
|
Total
sales
|
288
|
525
|
475
|
541
|
1,829
|
all figures in £ millions
|
Global
Online Learning
|
Global
Assessments
|
North
American Courseware
|
International
|
Total
|
|
|
|
|
|
|
2019
full year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
-
|
-
|
448
|
469
|
917
|
Products
transferred at a point in time (other)
|
-
|
-
|
-
|
37
|
37
|
Products and
services transferred over time
|
-
|
-
|
627
|
69
|
696
|
|
-
|
-
|
1,075
|
575
|
1,650
|
Assessments
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
113
|
-
|
61
|
174
|
Products and
services transferred over time
|
-
|
918
|
-
|
372
|
1,290
|
|
-
|
1,031
|
-
|
433
|
1,464
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
-
|
-
|
-
|
26
|
26
|
Products and
services transferred over time
|
586
|
-
|
16
|
127
|
729
|
|
586
|
-
|
16
|
153
|
755
|
|
|
|
|
|
|
Total
sales
|
586
|
1,031
|
1,091
|
1,161
|
3,869
|
|
Global
Online Learning
|
Global
Assessments
|
North
American Courseware
|
International
|
Enabling
Functions
|
PRH
|
Total
|
all figures in £ millions
|
|||||||
|
|||||||
|
|||||||
2020
half year
|
|||||||
Adjusted operating
profit / (loss)
|
24
|
71
|
36
|
46
|
(201)
|
1
|
(23)
|
Cost of
major restructuring
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Intangible
charges
|
(15)
|
(26)
|
-
|
(10)
|
-
|
-
|
(51)
|
Other
net gains and losses
|
-
|
-
|
1
|
-
|
-
|
180
|
181
|
Operating
profit / (loss)
|
9
|
45
|
37
|
36
|
(201)
|
181
|
107
|
|
|
|
|
|
|
|
|
2019
half year
|
|||||||
Adjusted operating
profit / (loss)
|
41
|
174
|
28
|
120
|
(244)
|
25
|
144
|
Cost of
major restructuring
|
-
|
-
|
(38)
|
(5)
|
(20)
|
(1)
|
(64)
|
Intangible
charges
|
(18)
|
(13)
|
-
|
(12)
|
-
|
(6)
|
(49)
|
Other
net gains and losses
|
-
|
-
|
6
|
-
|
-
|
-
|
6
|
Operating profit /
(loss)
|
23
|
161
|
(4)
|
103
|
(264)
|
18
|
37
|
|
|
|
|
|
|
|
|
2019
full year
|
|||||||
Adjusted operating
profit / (loss)
|
84
|
351
|
231
|
299
|
(449)
|
65
|
581
|
Cost of
major restructuring
|
-
|
(7)
|
(51)
|
(24)
|
(75)
|
(2)
|
(159)
|
Intangible
charges
|
(35)
|
(27)
|
-
|
(89)
|
-
|
(12)
|
(163)
|
Other
net gains and losses
|
-
|
-
|
13
|
3
|
-
|
-
|
16
|
Operating profit /
(loss)
|
49
|
317
|
193
|
189
|
(524)
|
51
|
275
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Net
interest payable
|
|
(27)
|
(18)
|
(41)
|
Net
finance income in respect of retirement benefits
|
|
3
|
7
|
13
|
Fair
value re-measurement of disposal proceeds
|
|
(14)
|
-
|
-
|
Net
foreign exchange losses
|
|
(6)
|
(3)
|
(5)
|
Derivatives not in
a hedge relationship
|
|
(28)
|
(10)
|
(10)
|
Net
finance costs
|
|
(72)
|
(24)
|
(43)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Finance
costs
|
|
(88)
|
(46)
|
(84)
|
Finance
income
|
|
16
|
22
|
41
|
Net
finance costs
|
|
(72)
|
(24)
|
(43)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Net
interest payable reflected in adjusted earnings
|
|
(27)
|
(18)
|
(41)
|
Other
net finance costs
|
|
(45)
|
(6)
|
(2)
|
Net
finance costs
|
|
(72)
|
(24)
|
(43)
|
|
|
|
|
|
all figures in £ millions
|
note
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Profit
before tax
|
|
35
|
13
|
232
|
Cost of
major restructuring
|
2
|
-
|
64
|
159
|
Other
net gains and losses
|
2
|
(181)
|
(6)
|
(16)
|
Intangible
charges
|
2
|
51
|
49
|
163
|
Other
net finance costs
|
3
|
45
|
6
|
2
|
Adjusted
(loss) / profit before tax
|
|
(50)
|
126
|
540
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Income
tax benefit
|
|
13
|
35
|
34
|
Tax
benefit on cost of major restructuring
|
|
-
|
(13)
|
(35)
|
Tax
benefit on other net gains and losses
|
|
-
|
(37)
|
(68)
|
Tax
charge / (benefit) on intangible charges
|
|
7
|
(12)
|
(48)
|
Tax
benefit on other net finance costs
|
|
(9)
|
(1)
|
-
|
Tax
amortisation benefit on goodwill and intangibles
|
|
-
|
5
|
28
|
Adjusted
income tax benefit / (charge)
|
|
11
|
(23)
|
(89)
|
|
|
|
|
|
Tax
rate reflected in statutory earnings
|
|
(37.1)%
|
(269.2)%
|
(14.7)%
|
Tax
rate reflected in adjusted earnings
|
|
21.0
%
|
18.0
%
|
16.5
%
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Earnings for the
period
|
|
48
|
48
|
266
|
Non-controlling
interest
|
|
-
|
(1)
|
(2)
|
Earnings
attributable to equity shareholders
|
|
48
|
47
|
264
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares (millions)
|
|
759.2
|
775.6
|
777.0
|
Effect
of dilutive share options (millions)
|
|
-
|
0.5
|
0.5
|
Weighted average
number of shares (millions) for diluted earnings
|
|
759.2
|
776.1
|
777.5
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
Basic
|
|
6.3p
|
6.1p
|
34.0p
|
Diluted
|
|
6.3p
|
6.1p
|
34.0p
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
note
|
Statutory
income statement
|
Cost of
major restructuring
|
Other
net gains and losses
|
Intangible
charges
|
Other
net finance costs
|
Tax
amortisation benefit
|
Adjusted
income statement
|
|
|
|
|
|
|
|
|
|
2020 half year
|
||||||||
Operating
profit / (loss)
|
2
|
107
|
-
|
(181)
|
51
|
-
|
-
|
(23)
|
Net
finance costs
|
3
|
(72)
|
-
|
-
|
-
|
45
|
-
|
(27)
|
Profit
/ (loss) before tax
|
4
|
35
|
-
|
(181)
|
51
|
45
|
-
|
(50)
|
Income
tax
|
5
|
13
|
-
|
-
|
7
|
(9)
|
-
|
11
|
Profit
/ (loss) for the year
|
|
48
|
-
|
(181)
|
58
|
36
|
-
|
(39)
|
Non-controlling
interest
|
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Earnings
/ (loss)
|
|
48
|
-
|
(181)
|
58
|
36
|
-
|
(39)
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions)
|
|
|
759.2
|
|||||
Weighted
average number of shares (millions) for diluted
earnings
|
|
|
759.2
|
|||||
|
|
|
|
|||||
Adjusted loss per share (basic)
|
|
|
(5.1)p
|
|||||
Adjusted
loss per share (diluted)
|
|
|
(5.1)p
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
note
|
Statutory
income statement
|
Cost of
major restructuring
|
Other
net gains and losses
|
Intangible
charges
|
Other
net finance costs
|
Tax
amortisation benefit
|
Adjusted
income statement
|
|
|
|
|
|
|
|
|
|
2019
half year
|
||||||||
Operating
profit
|
2
|
37
|
64
|
(6)
|
49
|
-
|
-
|
144
|
Net
finance costs
|
3
|
(24)
|
-
|
-
|
-
|
6
|
-
|
(18)
|
Profit
before tax
|
4
|
13
|
64
|
(6)
|
49
|
6
|
-
|
126
|
Income
tax
|
5
|
35
|
(13)
|
(37)
|
(12)
|
(1)
|
5
|
(23)
|
Profit
for the year
|
|
48
|
51
|
(43)
|
37
|
5
|
5
|
103
|
Non-controlling
interest
|
|
(1)
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Earnings
|
|
47
|
51
|
(43)
|
37
|
5
|
5
|
102
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions)
|
|
|
775.6
|
|||||
Weighted
average number of shares (millions) for diluted
earnings
|
|
|
776.1
|
|||||
|
|
|
|
|||||
Adjusted
earnings per share (basic)
|
|
|
13.2p
|
|||||
Adjusted
earnings per share (diluted)
|
|
|
13.1p
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
note
|
Statutory
income statement
|
Cost of
major restructuring
|
Other
net gains and losses
|
Intangible
charges
|
Other
net finance costs
|
Tax
amortisation benefit
|
Adjusted
income statement
|
|
|
|
|
|
|
|
|
|
2019
full year
|
||||||||
Operating
profit
|
2
|
275
|
159
|
(16)
|
163
|
-
|
-
|
581
|
Net
finance costs
|
3
|
(43)
|
-
|
-
|
-
|
2
|
-
|
(41)
|
Profit
before tax
|
4
|
232
|
159
|
(16)
|
163
|
2
|
-
|
540
|
Income
tax
|
5
|
34
|
(35)
|
(68)
|
(48)
|
-
|
28
|
(89)
|
Profit
for the year
|
|
266
|
124
|
(84)
|
115
|
2
|
28
|
451
|
Non-controlling
interest
|
|
(2)
|
-
|
-
|
-
|
-
|
-
|
(2)
|
Earnings
|
|
264
|
124
|
(84)
|
115
|
2
|
28
|
449
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions)
|
|
|
777.0
|
|||||
Weighted
average number of shares (millions) for diluted
earnings
|
|
|
777.5
|
|||||
|
|
|
|
|||||
Adjusted earnings per share (basic)
|
|
|
57.8p
|
|||||
Adjusted
earnings per share (diluted)
|
|
|
57.7p
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Amounts
recognised as distributions to equity shareholders in the
period
|
|
101
|
101
|
147
|
|
|
|
|
|
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Average
rate for profits
|
|
1.24
|
1.29
|
1.28
|
Period
end rate
|
|
1.23
|
1.27
|
1.32
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Investments in
joint ventures and associates
|
|
-
|
-
|
397
|
Non-current
assets
|
|
-
|
-
|
397
|
|
|
|
|
|
Total
assets
|
|
-
|
-
|
397
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Goodwill
|
|
2,253
|
2,189
|
2,139
|
Other
intangibles
|
|
755
|
873
|
761
|
Non-current
intangible assets
|
|
3,008
|
3,062
|
2,900
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Trade
payables
|
|
(216)
|
(234)
|
(358)
|
Sales
return liability
|
|
(78)
|
(90)
|
(122)
|
Accruals
|
|
(305)
|
(356)
|
(295)
|
Deferred
income
|
|
(324)
|
(398)
|
(360)
|
Other
liabilities
|
|
(192)
|
(265)
|
(229)
|
Trade
and other liabilities
|
|
(1,115)
|
(1,343)
|
(1,364)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Trade
and other liabilities – current
|
|
(1,048)
|
(1,209)
|
(1,278)
|
Other
liabilities – non-current
|
|
(67)
|
(134)
|
(86)
|
Total
trade and other liabilities
|
|
(1,115)
|
(1,343)
|
(1,364)
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Intangible
assets
|
|
-
|
-
|
23
|
Trade and other
receivables
|
|
-
|
-
|
1
|
Trade
and other liabilities
|
|
-
|
-
|
(2)
|
Net
assets acquired
|
|
-
|
-
|
22
|
Goodwill
|
|
-
|
-
|
18
|
Total
|
|
-
|
-
|
40
|
|
|
|
|
|
Satisfied
by:
|
|
|
|
|
Cash
|
|
-
|
-
|
40
|
Total
consideration
|
|
-
|
-
|
40
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Cash –
current year acquisitions
|
|
-
|
-
|
(40)
|
Deferred payments
for prior year acquisitions
|
|
(6)
|
(5)
|
(5)
|
Net
cash outflow on acquisitions
|
|
(6)
|
(5)
|
(45)
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Intangible
assets
|
|
-
|
(101)
|
(101)
|
Investments in
joint ventures and associates
|
|
(418)
|
-
|
-
|
Intangible assets
– pre-publication
|
|
-
|
(238)
|
(238)
|
Inventories
|
|
-
|
(64)
|
(64)
|
Trade and other
receivables
|
|
-
|
(71)
|
(70)
|
Cash and cash
equivalents (excluding overdrafts)
|
|
-
|
(105)
|
(104)
|
Net deferred income
tax liabilities
|
|
-
|
(100)
|
(100)
|
Trade
and other liabilities
|
|
-
|
521
|
520
|
Cumulative
translation adjustment
|
|
70
|
(4)
|
(4)
|
Net
assets disposed
|
|
(348)
|
(162)
|
(161)
|
|
|
|
|
|
Cash
proceeds
|
|
531
|
20
|
20
|
Deferred
proceeds
|
|
-
|
172
|
180
|
Costs of
disposal
|
|
(2)
|
(24)
|
(23)
|
Gain
on disposal
|
|
181
|
6
|
16
|
|
|
|
|
|
Cash
flow from disposals
|
|
|
|
|
Proceeds –
current year disposals
|
|
531
|
20
|
20
|
Proceeds –
prior year disposals
|
|
61
|
-
|
-
|
Cash and cash
equivalents disposed
|
|
-
|
(105)
|
(104)
|
Costs and other
disposal liabilities paid
|
|
(3)
|
(15)
|
(17)
|
Net
cash inflow / (outflow) from disposals
|
|
589
|
(100)
|
(101)
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Derivative
financial instruments
|
|
47
|
59
|
29
|
Trade
and other receivables – investment in finance
lease
|
|
166
|
184
|
171
|
Current
assets
|
|
|
|
|
Derivative
financial instruments
|
|
15
|
2
|
25
|
Trade
and other receivables – investment in finance
lease
|
|
32
|
30
|
25
|
Cash
and cash equivalents (excluding overdrafts)
|
|
687
|
417
|
437
|
Non-current
liabilities
|
|
|
|
|
Borrowings
|
|
(1,550)
|
(1,869)
|
(1,572)
|
Derivative
financial instruments
|
|
(65)
|
(46)
|
(24)
|
Current
liabilities
|
|
|
|
|
Borrowings
|
|
(292)
|
(141)
|
(92)
|
Derivative
financial instruments
|
|
(22)
|
(12)
|
(15)
|
Net
debt
|
|
(982)
|
(1,376)
|
(1,016)
|
|
Level
1
|
Level
2
|
---Level
3---
|
Total
fair value
|
|
all figures in £ millions
|
FVTPL
– Cash and cash equivalents
|
Derivatives
|
FVOCI
Investments
|
FVTPL -
Other
receivables
|
|
|
|
|
|
|
|
2020
half year
|
|||||
|
|
|
|
|
|
Investments in
unlisted securities
|
-
|
-
|
133
|
-
|
133
|
Other
receivables
|
-
|
-
|
-
|
120
|
120
|
Cash
and cash equivalents
|
47
|
-
|
-
|
-
|
47
|
Derivative
financial instruments
|
-
|
62
|
-
|
-
|
62
|
Total
financial assets held at fair value
|
47
|
62
|
133
|
120
|
362
|
|
|
|
|
|
|
Derivative
financial instruments
|
-
|
(87)
|
-
|
-
|
(87)
|
Total
financial liabilities held at fair value
|
-
|
(87)
|
-
|
-
|
(87)
|
|
|
|
|
|
|
2019
half year
|
|||||
|
|
|
|
|
|
Investments in
unlisted securities
|
-
|
-
|
118
|
-
|
118
|
Other
receivables
|
-
|
-
|
-
|
181
|
181
|
Cash
and cash equivalents
|
13
|
-
|
-
|
-
|
13
|
Derivative
financial instruments
|
-
|
61
|
-
|
-
|
61
|
Total
financial assets held at fair value
|
13
|
61
|
118
|
181
|
373
|
|
|
|
|
|
|
Derivative
financial instruments
|
-
|
(58)
|
-
|
-
|
(58)
|
Total
financial liabilities held at fair value
|
-
|
(58)
|
-
|
-
|
(58)
|
|
|
|
|
|
|
2019
full year
|
|||||
|
|
|
|
|
|
Investments in
unlisted securities
|
-
|
-
|
122
|
-
|
122
|
Other
receivables
|
-
|
-
|
-
|
182
|
182
|
Cash
and cash equivalents
|
51
|
-
|
-
|
-
|
51
|
Derivative
financial instruments
|
-
|
54
|
-
|
-
|
54
|
Total
financial assets held at fair value
|
51
|
54
|
122
|
182
|
409
|
|
|
|
|
|
|
Derivative
financial instruments
|
-
|
(39)
|
-
|
-
|
(39)
|
Total
financial liabilities held at fair value
|
-
|
(39)
|
-
|
-
|
(39)
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
FVTPL
– other receivables
|
|
|
|
|
At
beginning of period / at acquisition
|
|
182
|
176
|
176
|
Exchange
differences - OCI
|
|
13
|
5
|
(1)
|
Repayments
|
|
(61)
|
-
|
-
|
Fair
value movements – income statement
|
|
(14)
|
-
|
7
|
At
end of period
|
|
120
|
181
|
182
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Investments
in unlisted securities
|
|
|
|
|
At
beginning of period
|
|
122
|
93
|
93
|
Exchange
differences - OCI
|
|
7
|
-
|
(3)
|
Additions
|
|
4
|
7
|
12
|
Fair
value movements - OCI
|
|
-
|
18
|
20
|
At
end of period
|
|
133
|
118
|
122
|
|
|
|
|
|
all figures in £ millions
|
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Reconciliation
of profit for the period to net cash (used in) / generated from
operations
|
|
|
|
|
|
|
|
|
|
Profit
for the period
|
|
48
|
48
|
266
|
Income
tax
|
|
(13)
|
(35)
|
(34)
|
Depreciation,
amortisation and impairment charges
|
|
165
|
158
|
389
|
Net
profit on disposal of businesses
|
|
(181)
|
(6)
|
(16)
|
Net
loss on disposal of fixed assets
|
|
2
|
2
|
7
|
Net
profit on disposal of right of use assets held under
leases
|
|
-
|
(12)
|
(4)
|
Net
finance costs
|
|
72
|
24
|
43
|
Share
of results of joint ventures and associates
|
|
(2)
|
(18)
|
(54)
|
Net
foreign exchange adjustment
|
|
1
|
4
|
(21)
|
Investment
income
|
|
-
|
-
|
(2)
|
Share-based payment
costs
|
|
12
|
14
|
25
|
Pre-publication
|
|
(29)
|
(24)
|
(55)
|
Inventories
|
|
(1)
|
(58)
|
(20)
|
Trade
and other receivables
|
|
100
|
1
|
59
|
Trade
and other liabilities
|
|
(274)
|
(227)
|
(157)
|
Retirement benefit
obligations
|
|
4
|
2
|
5
|
Provisions for
other liabilities and charges
|
|
(21)
|
10
|
49
|
Net
cash (used in) / generated from operations
|
|
(117)
|
(117)
|
480
|
|
|
|
|
|
all figures in £ millions
|
note
|
2020
|
2019
|
2019
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Reconciliation
of net cash (used in) / generated from operations to closing net
debt
|
|
|
|
|
|
|
|
|
|
Net
cash (used in) / generated from operations
|
|
(117)
|
(117)
|
480
|
Dividends from
joint ventures and associates
|
|
3
|
15
|
64
|
Purchase of
PPE
|
|
(30)
|
(38)
|
(55)
|
Acquisition of new
right-of-use lease assets
|
|
(46)
|
(6)
|
(64)
|
Proceeds from sale
of PPE
|
|
-
|
-
|
1
|
Disposal of
right-of-use lease assets
|
|
-
|
14
|
17
|
Purchase of
intangible assets
|
|
(48)
|
(57)
|
(138)
|
Investment
income
|
|
-
|
-
|
2
|
Costs
paid for major restructuring
|
|
24
|
60
|
111
|
Operating
cash flow
|
|
(214)
|
(129)
|
418
|
Operating tax
received / (paid)
|
|
16
|
(8)
|
(9)
|
Net
operating finance costs paid
|
|
(33)
|
(31)
|
(64)
|
Operating
free cash flow
|
|
(231)
|
(168)
|
345
|
Non-operating tax
received / (paid)
|
|
4
|
-
|
(21)
|
Cost
paid for major restructuring
|
|
(24)
|
(60)
|
(111)
|
Free
cash flow
|
|
(251)
|
(228)
|
213
|
Dividends paid
(including to non-controlling interest)
|
|
(101)
|
(101)
|
(148)
|
Net
movement of funds from operations
|
|
(352)
|
(329)
|
65
|
Acquisitions and
disposals
|
|
579
|
(150)
|
(193)
|
Loans
repaid / (advanced)
|
|
49
|
(10)
|
(49)
|
New
equity
|
|
2
|
3
|
7
|
Buyback
of equity
|
|
(176)
|
-
|
-
|
Purchase of
treasury shares
|
|
-
|
(40)
|
(52)
|
Other
movements on financial instruments
|
|
(29)
|
(10)
|
(9)
|
Net
movement of funds
|
|
73
|
(536)
|
(231)
|
Exchange movements
on net debt
|
|
(39)
|
(9)
|
24
|
Movement
in net debt
|
|
34
|
(545)
|
(207)
|
Opening
net debt
|
|
(1,016)
|
(143)
|
(143)
|
Adjustment on
initial application of IFRS 16
|
|
-
|
(688)
|
(666)
|
Closing
net debt
|
15
|
(982)
|
(1,376)
|
(1,016)
|
|
PEARSON
plc
|
|
|
Date: 24
July 2020
|
|
|
By: /s/
NATALIE WHITE
|
|
|
|
------------------------------------
|
|
Natalie
White
|
|
Deputy
Company Secretary
|