26 July 2019
|
Good
progress in the first half of the year, continued momentum in our
structural growth opportunities.
|
Highlights
|
Underlying revenue up 2% with growth across all three
segments
● North America up
1%, Core up 6% and Growth up 2%.
● Continued momentum
in our structural growth opportunities and stabilisation in other
parts of our business more than offsets expected declines in US
Higher Education Courseware and US Student Assessment.
● Strong performance
in our structural growth opportunities driven by good enrolment
growth in Online Program Management (OPM) and Connections Academy,
a continuing ramp-up of contracts in our Professional Certification
business (VUE) and strong test volumes in Pearson Test of English
Academic.
● Pearson’s
sales decreased by 2% in headline terms largely due to disposals of
non core businesses.
● As in previous
years, Pearson’s sales and profits are weighted towards the
second half of the year.
Adjusted operating profit up 30% in underlying terms
● Reflecting sales
growth and savings from the 2017-2019 restructuring programme,
partially offset by cost inflation and other operational
factors.
Strong balance sheet with H1 net debt at £726m (H1 2018:
£775m) pre IFRS 161
● On a post IFRS 16
basis net debt at the end of H1 2019 was £1,376m.
● Interim dividend 6p
(H1 2018: 5.5p).
Statutory results
● Statutory operating
profit from continuing operations was £37m in the first half
of 2019 (H1 2018: £233m). The decrease in 2019 is largely due
to the lower profit on disposal of businesses and higher
restructuring charges in 2019, partly offset by improved trading
and additional restructuring savings.
● Statutory EPS 6.1p
(H1 2018: 24.1p) reflects lower profit on disposal of
businesses.
Simplification on track to deliver over £330m annualised cost
savings by end of 2019
● Incremental cost
savings of £60m delivered in the first half.
● Completed our
Enterprise Resource Planning (ERP) implementation in the US with
over 75% of the company by revenue now operating on a single ERP
system.
● On track to launch
the Global Learning Platform (GLP) and a suite of new digital
products over the coming months.
FY 2019 adjusted operating profit guidance unchanged; adjusted EPS
upgraded
● We continue to
expect Pearson to deliver underlying profit growth and stabilise
revenue in 2019, and for revenue to grow in 2020.
● For 2019 we are
upgrading our adjusted earnings per share guidance to be between
57.5p to 63.0p reflecting improvements in the finance charge and
taxation at exchange rates prevailing on 31st December
2018.
|
John Fallon, Chief Executive said:
“We've
had a good first half, with underlying growth across all divisions,
as we start to benefit from accelerating our shift to digital. We
are on track to at least stabilise revenue this year and return the
company to top line growth from 2020. We are excited by the new
digital products and platforms we're now launching, and our ability
to help millions more people prepare for, develop in, and change
careers through a lifetime of learning.”
|
Financial summary
|
|||||
£m
|
H1 2019
|
H1
2018
|
Headline
growth
|
CER
growth
|
Underlying
growth
|
Business performance
|
|
|
|
|
|
Sales
|
1,829
|
1,865
|
(2)%
|
(6)%
|
2%
|
Adjusted
operating profit
|
144
|
107
|
35%
|
26%
|
30%
|
Operating
cash flow
|
(129)
|
(202)
|
|
|
|
Adjusted
earnings per share (basic)
|
13.2p
|
8.2p
|
|
|
|
Dividend
per share
|
6.0p
|
5.5p
|
|
|
|
Net
debt
|
(1,376)
|
(775)
|
|
|
|
Statutory results
|
|
|
|
|
|
Sales
|
1,829
|
1,865
|
|
|
|
Operating
profit
|
37
|
233
|
|
|
|
Cash
generated from operations
|
(117)
|
(131)
|
|
|
|
Basic
earnings per share
|
6.1p
|
24.1p
|
|
|
|
Continuing good progress on our strategic priorities.
During the first half of 2019 we continued to make good progress on
our strategic priorities of digital transformation, investing in
structural growth and simplification, making us a leaner, more
agile and more sustainable business.
|
|
Digital transformation
|
●
We recently
announced that all future releases of Pearson’s 1,500 active
US Higher Education Courseware titles will be “digital
first” and updated on an ongoing basis. This drives benefits
in content delivery, speed and cost, and further facilitates our
move from ownership to subscription based access models. It also
allows the communication of a simpler and more transparent
marketing strategy for pricing.
●
We continue to make
good progress with our strategy of shifting from ownership to
subscription based access models, signing 84 new institutions in
Inclusive Access in the first half of the year. This takes the
total number of institutions that have signed to 781 representing
c.16% of US Higher Education Courseware revenue, up over 40% from
H1 2018. We will continue to expand our access based models adding
a further 200 titles in our Partner Print Rental programme
resulting in over 330 titles this Fall with a further 80 titles
available in digital format only.
●
US Higher Education
Courseware digital revenue grew moderately on a like for like
basis, while registrations, including ebooks, declined 1%. Good
registration growth in Revel, up 22% was offset by continued market
pressure in Developmental Mathematics and the planned retirement
and deprioritisation of long tail products in advance of our launch
of GLP and the digital first model. We expect this to continue
during the transition to the digital first and GLP enabled model,
before growth in registrations resumes in 2021.
●
US Student
Assessment declined 5% in online tests to K12 students, due to
contract exits and reductions in scope. TestNav8, our digital
testing platform, operated with 100% up-time across all customers
with a peak load of 1.3m students in a single day.
●
Our Core Assessment
business benefited from the delivery of a new contract in Egypt to
run the national high school assessment programme. This will
deliver 125m digital tests over a four year lifecycle making it
Pearson’s biggest assessment contract by volume.
|
Invest in structural growth markets
|
●
In Online Program
Management (OPM) revenue grew well with enrolment growth of 13% on
a global basis and the launch of new programs.
●
In Connections
Academy, our K12 virtual school business, enrolment growth of 11%
across existing schools and new schools led to strong revenue
growth.
●
Both OPM and
Connections continue to benefit from strong pipelines underpinning
revenue growth going forward.
●
In Professional
Certification, revenue grew well as we continued to benefit from
the ramp-up of new contracts and the renewal of existing
contracts. Pearson’s Professional Certification business
partners with more than 450 credential owners across the
globe.
●
Pearson Test of
English Academic grew global test volumes by 18% with a strong
performance in Australia, India and China.
|
Simpler and more efficient
|
●
We completed the
sale of our US K12 Courseware business in March 2019.
●
We are on track to
deliver incremental cost savings under our transformation plan of
more than £330m per annum, with the full benefits accruing
from the end of 2019 onwards2.
●
In the first half
of the year, we achieved incremental cost savings of £60m,
closing two offices and completing 80% of our headcount reduction
as well as the implementation of our new ERP system in the
US.
●
During the second
half of the year we expect to deliver further incremental savings
of £70m and an additional £55m or more in 2020.
Restructuring costs in the first half were £64m.
|
2019 outlook
|
Our
guidance for 2019 adjusted operating profit remains unchanged and
we continue to expect to deliver adjusted operating profit of
between £590m to £640m.
We
continue to expect to stabilise revenue in 2019 and to return to
top line growth in 2020. Our guidance for US Higher Education
Courseware remains unchanged with net sales expected to be flat to
down 5% for the full year, driven by ongoing underlying market
pressures.
For the
full year, we are updating our guidance for improvements in the
finance charge and taxation. We now expect our finance charge to be
£45m for the full year due to favourable interest outcomes
from settlements of historical tax positions. We expect our tax
rate to be in the range of 17% - 19% following further review of
detailed regulations published regarding US tax
reform.
The
impact of these changes increases our adjusted earnings per share
to be between 57.5p to 63.0p at exchange rates prevailing on 31st
December 2018.
We
calculate that a 5c move in the US Dollar exchange rate to Sterling
would impact adjusted EPS by around 2.0p to 2.5p.
|
Investor Relations
|
Jo
Russell, Tom Waldron, Anjali Kotak
|
+44
(0) 207 010 2310
|
Media
|
Tom
Steiner, Gemma Terry
|
+44
(0) 207 010 2310
|
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.
Dial in
details:
United
Kingdom Toll-Free: 08003589473United Kingdom Toll: +44
3333000804
PIN:
45472957#
Audience
URL: http://pear.sn/Y1aL30pdcvV
|
Financial overview
|
Profit & loss statement. Pearson’s sales decreased
by 2% in headline terms to £1,829m (H1 2018: £1,865m)
with portfolio adjustments reducing sales by £141m, and
currency movements increasing revenue by £69m. Stripping out
the impact of portfolio changes and currency movements, revenue was
up 2% in underlying terms due to 1% growth in our North America
segment, a 6% increase in our Core segment and a 2% increase in our
Growth segment.
The
2019 adjusted operating profit of £144m (H1 2018: £107m)
reflects sales growth and savings from the ongoing transformation
plan, the impact of FX and a modest benefit from the adoption of
IFRS 16, partially offset by cost inflation, other operational
factors and disposals. Excluding the impact of FX, IFRS 16 and
portfolio items, underlying adjusted operating profit grew
30%.
Net
interest payable to 30 June 2019 was £18m, (H1 2018:
£26m). The decrease is primarily due to lower levels of net
debt together with favourable movements in interest on tax and the
absence of one off costs relating to the redemption of bonds in the
first half of 2018 which were more than enough to offset the impact
of net interest payable on leases. The increase in interest on
leases is due to the adoption of IFRS 16 which resulted in an
additional £16m of net interest payable in H1
2019.
Our
adjusted tax charge was £23m (H1 2018:
£16m).
Adjusted
earnings for the period were £102m (H1 2018: £64m) and
adjusted earnings per share were 13.2p (H1 2018:
8.2p).
Cash generation. Net cash used in operations was £117m
compared to £131m in 2018 reflecting an increase in
restructuring spend of £27m to £60m in the first half of
2019. Operating cash outflow decreased by £73m from
£202m in 2018 to £129m. This decrease includes the impact
of the adoption of IFRS 16 and the divestment of our US K12
Courseware business in March 2019 which would have seen a seasonal
cash outflow in the first half.
Statutory results. Our statutory operating profit of
£37m in H1 2019 compares to a profit of £233m in H1 2018
which included the profit on disposals of WSE and
Utel.
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, delivering a sustainable
and progressive dividend and will return any surplus cash to our
shareholders.
Balance sheet. H1 net debt of £726m
(H1 2018: £775m) on a pre IFRS 16 basis. Post IFRS 16, net
debt at the end of H1 2019 was £1,376m.
Dividend. In line with our policy, the Board is proposing an
interim dividend of 6.0p (2018: 5.5p) payable on 13 September
2019.
|
Notes:
1 IFRS
16 – Leases is the new accounting standard which has
replaced IAS 17 and is applicable for financial years commencing on
or after 1 January 2019, and which the Group adopted on the 1
January 2019. The standard results in the operating lease expense
being replaced by finance costs and depreciation which will reflect
the corresponding lease liabilities and right of use assets which
will now be recognised on the balance sheet.
2 Based
on December 2018 exchange rates, a significant part of costs and
savings from the restructuring programme are US Dollar denominated
and in other non-Sterling currencies and are therefore subject to
exchange rate movements over the implementation
timeframe.
|
£ millions
|
H1 2019
|
H1
2018
|
Headline
growth
|
CER
growth
|
Underlying
growth
|
Sales
|
|
|
|
|
|
North
America
|
1,209
|
1,223
|
(1)%
|
(7)%
|
1%
|
Core
|
403
|
383
|
5%
|
5%
|
6%
|
Growth
|
217
|
259
|
(16)%
|
(15)%
|
2%
|
Total sales
|
1,829
|
1,865
|
(2)%
|
(6)%
|
2%
|
|
|
|
|
|
|
Adjusted operating profit
|
|
|
|
|
|
North
America
|
79
|
64
|
23%
|
13%
|
11%
|
Core
|
31
|
10
|
210%
|
200%
|
190%
|
Growth
|
9
|
11
|
(18)%
|
(18)%
|
50%
|
Penguin
Random House
|
25
|
22
|
14%
|
9%
|
9%
|
Total adjusted operating profit
|
144
|
107
|
35%
|
26%
|
30%
|
North America (66% of revenue)
|
|
Underlying
revenue rose 1% reflecting good growth in OPM, Connections Academy
and Professional Certification, more than offsetting expected
modest declines in US Higher Education Courseware and Student
Assessment. In headline terms, revenue declined 1% as the factors
above and currency benefits were more than offset by a reduction in
revenue related to the US K12 Courseware disposal.
Adjusted
operating profit grew 11% in underlying terms due primarily to the
benefits of the restructuring programme. In headline terms adjusted
operating profit rose 23% due to the benefits of the restructuring
programme, currency benefits and a positive impact from changes
related to the adoption of IFRS 16.
|
|
Courseware
|
In
School Courseware, the US K12 Courseware business contributed
£53m of revenue in the first quarter before it was sold at the
end of March.
In
Higher Education Courseware, we continue to reshape the business,
breaking away from the traditional education publishing model built
around three year edition cycles towards a “digital
first” product model, allowing us to accelerate the shift
from ownership to access. This will enable simpler and more
affordable pricing for students and allow us to regain share from
the secondary market and drive up our average revenue per course
enrolment over time.
During
the first half of the year, Higher Education Courseware net revenue
was down in line with the middle of our full year guidance range,
against a strong comparative in H1 2018, which benefited from the
absence of the additional returns provision we took in H1 2017.
This performance was consistent with our expectations and we
continue to expect revenue in this segment in 2019 to be in line
with our previous forecast of flat to down 5%.
Total
US College Spring enrolments fell 1.4%, similar to the decline in
Fall 2018, with combined two-year public and four-year for-profit
enrolments declining 5.8%, affected by rising employment rates,
regulatory change impacting the for-profit and developmental
learning sectors, and by the transfer of a large college from the
For Profit sector to Private Not For Profit.
US
Higher Education Courseware digital revenue grew moderately on a
like for like basis while registrations, including ebooks, declined
1%. Good registration growth in Revel, up 22%, was offset by
continued market pressure in Developmental Mathematics and the
planned retirement and deprioritisation of long tail products in
advance of our launch of GLP and the digital first model. We expect
this to continue during the transition to the digital first and GLP
enabled model, before growth resumes in 2021.
Our GLP
development and digital roadmap are on track to deliver new digital
products with greater personalisation and enhanced engagement. We
are launching 18 Revel titles on the GLP in the second half of this
year with the remaining 300 titles migrating by the end of 2020
underpinning expected registration growth in Revel for the next two
years.
We
continue to make good progress with our strategy of shifting from
ownership to access, signing 84 new institutions in Inclusive
Access in the first half of the year. This takes the total number
of institutions that have signed to 781 representing c.16% of US
Higher Education Courseware revenue, up over 40% from H1 2018. We
will continue to expand our access based models adding a further
200 titles in our Partner Print Rental programme resulting in over
330 titles this Fall with a further 80 titles available in digital
format only.
|
Assessment
|
In
Student Assessment, revenue declined as expected due to the
contraction in revenue associated with contracts exits, the loss of
a contract in Indiana for assessment in grades 3-8 and reductions
in scope. In Kentucky, Maryland, and New Jersey, states where
we were the existing testing vendor, we won new, competitively bid
contracts. In addition, we won a new contract to deliver
assessments in Tennessee and were awarded the contract to
administer the federal National Center for Educational Statistics
(NCES) National Assessment of Educational Progress (NAEP) in
2019.
We
delivered 20.7 million standardised online tests to K12 students, a
decrease of 5% from the same period in 2018 due to contract exits
and reductions in scope. Paper-based standardised test volumes fell
12% to 8.0 million. Digital tests on Pearson’s TestNav
platform accounted for 72% of our testing volumes (H1 2018:
70%).
In
Professional Certification, revenue grew well benefiting from
growth in IT certification and nursing and the continued ramp-up of
new contracts in networking, online retail and teaching. In total
Pearson VUE signed 17 new agreements in the period and renewed 30
existing contracts. Our renewal rate on existing contracts
continues to be over 90%. Global test volumes increased 8% to 8.7m.
Pearson VUE partners with more than 450 credential owners across
the globe.
Clinical
Assessment sales declined on the phasing of new product releases
which are weighted to the second half. Q-Interactive,
Pearson’s digital solution for Clinical Assessment
administration, saw continued strong growth in licence sales with
sub-test administrations up over 30% over the same period last
year.
|
Services
|
Revenue
in Connections Academy, our K12 online school business, grew
strongly. Connections Academy served 70,000 Full Time Equivalent
(FTE) students through 37 continuing full-time virtual partner
schools in 28 states, up 11% on last year. Total FTE virtual school
students declined 3% to 73,000 as expected due to contract exits at
Commonwealth Charter Academy in Pennsylvania and Florida Virtual
School in 2018.
Six new
full-time online, state-wide partner schools will open in the
2019-20 school year. Combined with a contract exit in North
Carolina this will bring the total partner schools to 42 in 28
states. Additionally, the online private school, International
Connections Academy continues to serve students across the
globe.
The
Connections Academy Parent Satisfaction Survey continues to show
strong support for the schools with 2019 results showing 94% of
families with enrolled students stating they would recommend the
virtual schools to others and 95% agreeing that the curriculum is
of high quality.
In
Pearson Online Services, revenue increased on good growth in OPM
enrolment with only a small drag from Learning Studio revenue, a
learning management system, which will be fully retired in
2019.
In our
OPM business, course enrolments grew 11% to over 216,000. Our
programs increased to 335 with 33 new programs launched, and 23
programs discontinued.
|
|
We
continue to build our pipeline of future program launches and
during the first half, we signed 10 new programs and renewed seven
programs.
We are
continuing to refine our portfolio and focus on programs linked to
employability and expect to continue to launch new programs as well
as discontinue non-strategic programs over the next 12
months.
Our
comprehensive employer-education business, Accelerated Pathways,
continues to add more corporate partners offering foundational
education, GED and online degree programs to employees across the
US.
In
July, ManpowerGroup (NYSE: MAN), the leading global workforce
solutions company, announced the launch of its MyPath™
General Education Developmental (GED) Program in partnership with
Pearson. The GED program is an extension of Manpower’s
MyPath™ offering that helps actively assigned US associates
earn their high school equivalency diploma and future-proof their
careers through accelerated learning programs, on-the-job training
and certification.
|
Core (22% of revenue)
|
|
Revenue
rose 6% in underlying terms and 5% in headline terms, primarily due
to growth in OPM, Pearson Test of English Academic (PTEA),
Professional Certification and growth helped by phasing in UK
Student Assessment and Qualifications, School and Higher Education
Courseware and the delivery of a new digital assessment contract in
Egypt.
Adjusted
operating profit was up £19m in underlying terms and £21m
in headline terms primarily due to trading and the benefits of
restructuring.
|
|
Courseware
|
Courseware
revenue was up moderately with timing of orders helping Higher
Education Courseware in the UK and Australia.
|
Assessment
|
In
Student Assessment and Qualifications, revenue grew, helped by
phasing, with good growth in GCSEs, A-levels, BTEC Firsts and
Higher Nationals and the delivery of a new digital assessment
contract in Egypt. This was partially offset by continued declines
in Apprenticeships which will continue to impact the business in
the second half of the year.
We
successfully delivered the National Curriculum Test for 2019,
marking 3.8 million scripts, up slightly from 2018. We will
continue to administer the NCT test until September
2019.
In
Professional Certification business, revenue was up due to good
volume growth in the DVSA test in the UK, higher IT test volumes in
Australia and good volume growth in the MOI (French driving test)
which launched in late 2017.
PTEA
saw continued strong growth in test volumes in Australia during the
first half, up 18% from 2018. This was driven primarily by its use
to support visa applications to the Australian Department of Home
Affairs as well as good growth in New Zealand.
|
Services
|
In
Higher Education Services, our OPM revenue grew strongly with 41%
growth in course enrolments across eight university partners and 29
programs in Australia and the UK.
|
Growth (12% of revenue)
|
|
In
Growth, revenue grew 2% in underlying terms primarily due to good
performance in School Courseware in the Middle East and growth in
PTEA and Professional Certification.
Revenue
declined 16% in headline terms primarily due to the disposal of
WSE.
Adjusted
operating profit grew £2m in underlying terms primarily
reflecting the benefits of restructuring and declined 18% in
headline terms due to disposals partially offset by a positive
impact from changes related to the adoption of IFRS
16.
|
|
Courseware
|
Courseware
revenue grew slightly with growth in School Courseware due to
timing of orders in the Middle East.
|
Assessment
|
PTEA
saw strong growth in revenue with over 16% test volume growth in
India and China. Professional Certification grew well due to IT
infrastructure and accounting certification contracts.
|
Services
|
Services
revenue was flat with a slight increase in Higher Education
Services due to changes in prices at Pearson Institute of Higher
Education offset by slight declines in English Services due to
later phasing of franchise campaigns in our English Language
Schools in Brazil.
|
Penguin Random House
|
|
Pearson
owns 25% of Penguin Random House, the first truly global consumer
book publishing company.
Penguin
Random House performed in line with our expectations with revenue
growth on an underlying basis due to a rise in print and audio
sales, which were partially offset by lower ebook sales. The
business benefited from bestsellers by Michelle Obama, Delia Owen,
Tara Westover, E L James, Jeff Kinney, and Dr. Seuss.
Our
stake in Penguin Random House contributed £25m to our adjusted
operating profit, up 9% in underlying terms.
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Operating
profit
|
|
37
|
233
|
553
|
Add
back: Cost of major restructuring
|
|
64
|
24
|
102
|
Add
back: Intangible charges
|
|
49
|
57
|
113
|
Add
back: Other net gains and losses
|
|
(6)
|
(207)
|
(230)
|
Add
back: UK pension GMP equalisation
|
|
-
|
-
|
8
|
Adjusted
operating profit
|
|
144
|
107
|
546
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
Sales
|
2
|
1,829
|
1,865
|
4,129
|
Cost of
goods sold
|
|
(904)
|
(912)
|
(1,943)
|
Gross
profit
|
|
925
|
953
|
2,186
|
|
|
|
|
|
Operating
expenses
|
|
(912)
|
(942)
|
(1,907)
|
Other
net gains and losses
|
2
|
6
|
207
|
230
|
Share
of results of joint ventures and associates
|
|
18
|
15
|
44
|
Operating
profit
|
2
|
37
|
233
|
553
|
|
|
|
|
|
Finance
costs
|
3
|
(46)
|
(63)
|
(91)
|
Finance
income
|
3
|
22
|
32
|
36
|
Profit
before tax
|
4
|
13
|
202
|
498
|
Income
tax
|
5
|
35
|
(13)
|
92
|
Profit
for the period
|
|
48
|
189
|
590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the company
|
|
47
|
188
|
588
|
Non-controlling
interest
|
|
1
|
1
|
2
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (in pence per
share)
|
|
|
|
|
Basic
|
6
|
6.1p
|
24.1p
|
75.6p
|
Diluted
|
6
|
6.1p
|
24.1p
|
75.5p
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Profit
for the period
|
|
48
|
189
|
590
|
|
|
|
|
|
Items
that may be reclassified to the income statement
|
|
|
|
|
Net
exchange differences on translation of foreign
operations
|
|
25
|
(15)
|
90
|
Currency
translation adjustment on disposals
|
|
4
|
(4)
|
(4)
|
Attributable
tax
|
|
(1)
|
(2)
|
(4)
|
|
|
|
|
|
Items
that are not reclassified to the income statement
|
|
|
|
|
Fair
value gain on other financial assets
|
|
18
|
2
|
8
|
Attributable
tax
|
|
(3)
|
(1)
|
-
|
|
|
|
|
|
Remeasurement of
retirement benefit obligations
|
|
(141)
|
122
|
25
|
Attributable
tax
|
|
23
|
(25)
|
9
|
Other
comprehensive (expense) / income for the period
|
|
(75)
|
77
|
124
|
|
|
|
|
|
Total
comprehensive (expense) / income for the period
|
|
(27)
|
266
|
714
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the company
|
|
(28)
|
265
|
712
|
Non-controlling
interest
|
|
1
|
1
|
2
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Property, plant and
equipment
|
|
642
|
268
|
237
|
Intangible
assets
|
11
|
3,062
|
3,067
|
3,009
|
Investments in
joint ventures and associates
|
|
426
|
385
|
392
|
Deferred income tax
assets
|
|
65
|
51
|
60
|
Financial assets
– derivative financial instruments
|
|
59
|
72
|
67
|
Retirement benefit
assets
|
|
433
|
670
|
571
|
Other financial
assets
|
|
118
|
86
|
93
|
Trade and other
receivables
|
|
422
|
103
|
100
|
Non-current
assets
|
|
5,227
|
4,702
|
4,529
|
|
|
|
|
|
Intangible assets
– pre-publication
|
|
834
|
771
|
817
|
Inventories
|
|
212
|
167
|
164
|
Trade and other
receivables
|
|
1,273
|
1,059
|
1,178
|
Financial assets
– derivative financial instruments
|
|
2
|
-
|
1
|
Cash and cash
equivalents (excluding overdrafts)
|
|
417
|
330
|
568
|
Current
assets
|
|
2,738
|
2,327
|
2,728
|
|
|
|
|
|
Assets classified
as held for sale
|
10
|
-
|
607
|
648
|
Total
assets
|
|
7,965
|
7,636
|
7,905
|
|
|
|
|
|
Financial
liabilities – borrowings
|
|
(1,869)
|
(1,069)
|
(674)
|
Financial
liabilities – derivative financial instruments
|
|
(46)
|
(58)
|
(36)
|
Deferred income tax
liabilities
|
|
(107)
|
(137)
|
(136)
|
Retirement benefit
obligations
|
|
(96)
|
(100)
|
(100)
|
Provisions for
other liabilities and charges
|
|
(17)
|
(53)
|
(145)
|
Other
liabilities
|
12
|
(134)
|
(117)
|
(155)
|
Non-current
liabilities
|
|
(2,269)
|
(1,534)
|
(1,246)
|
|
|
|
|
|
Trade and other
liabilities
|
12
|
(1,209)
|
(1,173)
|
(1,400)
|
Financial
liabilities – borrowings
|
|
(141)
|
(33)
|
(46)
|
Financial
liabilities – derivative financial instruments
|
|
(12)
|
(17)
|
(23)
|
Current income tax
liabilities
|
|
(26)
|
(243)
|
(72)
|
Provisions for
other liabilities and charges
|
|
(16)
|
(21)
|
(20)
|
Current
liabilities
|
|
(1,404)
|
(1,487)
|
(1,561)
|
|
|
|
|
|
Liabilities
classified as held for sale
|
10
|
-
|
(518)
|
(573)
|
Total
liabilities
|
|
(3,673)
|
(3,539)
|
(3,380)
|
|
|
|
|
|
Net
assets
|
|
4,292
|
4,097
|
4,525
|
|
|
|
|
|
Share
capital
|
|
195
|
195
|
195
|
Share
premium
|
|
2,610
|
2,604
|
2,607
|
Treasury
shares
|
|
(58)
|
(59)
|
(33)
|
Reserves
|
|
1,535
|
1,348
|
1,747
|
Total equity
attributable to equity holders of the company
|
|
4,282
|
4,088
|
4,516
|
Non-controlling
interest
|
|
10
|
9
|
9
|
Total
equity
|
|
4,292
|
4,097
|
4,525
|
|
|
|
|
|||||||
|
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
|
1,039
|
4,516
|
9
|
4,525
|
Adjustment on
initial application of IFRS 16 net of tax (see note
1b)
|
-
|
-
|
-
|
-
|
-
|
-
|
(86)
|
(86)
|
-
|
(86)
|
Adjustment on
initial application of IFRIC 23 (see note 1c)
|
-
|
-
|
-
|
-
|
-
|
-
|
5
|
5
|
-
|
5
|
At
1 January 2019 (restated)
|
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)
|
-
|
-
|
-
|
Transfer of gain on
disposal of FVOCI investment
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
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
|
|
|
|
|
|
|
|
|
|
|
|
2018
half year
|
||||||||||
At 1
January 2018
|
200
|
2,602
|
(61)
|
5
|
13
|
592
|
544
|
3,895
|
8
|
3,903
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
188
|
188
|
1
|
189
|
Other
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
2
|
(19)
|
94
|
77
|
-
|
77
|
Total
comprehensive income / (expense)
|
-
|
-
|
-
|
-
|
2
|
(19)
|
282
|
265
|
1
|
266
|
Equity-settled
transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
19
|
19
|
-
|
19
|
Issue
of ordinary shares under share option schemes
|
1
|
2
|
-
|
-
|
-
|
-
|
-
|
3
|
-
|
3
|
Buyback
of equity
|
(6)
|
-
|
-
|
6
|
-
|
-
|
(1)
|
(1)
|
-
|
(1)
|
Purchase of
treasury shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Release
of treasury shares
|
-
|
-
|
2
|
-
|
-
|
-
|
(2)
|
-
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(93)
|
(93)
|
-
|
(93)
|
At 30
June 2018
|
195
|
2,604
|
(59)
|
11
|
15
|
573
|
749
|
4,088
|
9
|
4,097
|
|
|
|
|
|||||||
|
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
|
|
|
|
|
|
|
|
|
|
|
|
2018
full year
|
||||||||||
At 1
January 2018
|
200
|
2,602
|
(61)
|
5
|
13
|
592
|
544
|
3,895
|
8
|
3,903
|
Profit
for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
588
|
588
|
2
|
590
|
Other
comprehensive income
|
-
|
-
|
-
|
-
|
8
|
86
|
30
|
124
|
-
|
124
|
Total
comprehensive income
|
-
|
-
|
-
|
-
|
8
|
86
|
618
|
712
|
2
|
714
|
Equity-settled
transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
37
|
37
|
-
|
37
|
Tax on
equity settled transactions
|
-
|
-
|
-
|
-
|
-
|
-
|
4
|
4
|
-
|
4
|
Issue
of ordinary shares under share option schemes
|
1
|
5
|
-
|
-
|
-
|
-
|
-
|
6
|
-
|
6
|
Buyback
of equity
|
(6)
|
-
|
-
|
6
|
-
|
-
|
(2)
|
(2)
|
-
|
(2)
|
Purchase of
treasury shares
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Release
of treasury shares
|
-
|
-
|
28
|
-
|
-
|
-
|
(28)
|
-
|
-
|
-
|
Transfer of gain on
disposal of FVOCI investment
|
-
|
-
|
-
|
-
|
(2)
|
-
|
2
|
-
|
-
|
-
|
Dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
(136)
|
(136)
|
(1)
|
(137)
|
At 31
December 2018
|
195
|
2,607
|
(33)
|
11
|
19
|
678
|
1,039
|
4,516
|
9
|
4,525
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Cash
flows from operating activities
|
|
|
|
|
Net
cash (used in) / generated from operations
|
17
|
(117)
|
(131)
|
547
|
Interest
paid
|
|
(42)
|
(34)
|
(42)
|
Tax
paid
|
|
(8)
|
(8)
|
(43)
|
Net
cash (used in) / generated from operating activities
|
|
(167)
|
(173)
|
462
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
Acquisition of
subsidiaries, net of cash acquired
|
13
|
(5)
|
(5)
|
(5)
|
Additional capital
invested in associates
|
13
|
(40)
|
-
|
-
|
Purchase of
investments
|
|
(7)
|
(3)
|
(10)
|
Purchase of
property, plant and equipment
|
|
(38)
|
(32)
|
(70)
|
Purchase of
intangible assets
|
|
(57)
|
(80)
|
(130)
|
Disposal of
subsidiaries, net of cash disposed
|
14
|
(100)
|
84
|
83
|
Proceeds from sale
of joint ventures and associates
|
|
-
|
18
|
18
|
Proceeds from sale
of investments
|
|
2
|
-
|
6
|
Proceeds from sale
of property, plant and equipment
|
|
-
|
-
|
128
|
Proceeds from sale
of liquid resources
|
|
-
|
10
|
10
|
Lease
receivables repaid
|
|
11
|
-
|
-
|
Loans
(advanced to) / repaid by related parties
|
|
(10)
|
46
|
46
|
Investment in
liquid resources
|
|
-
|
(2)
|
(2)
|
Interest
received
|
|
11
|
16
|
20
|
Dividends received
from joint ventures and associates
|
|
15
|
66
|
117
|
Net
cash (used in) / generated from investing activities
|
|
(218)
|
118
|
211
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
3
|
3
|
6
|
|
Buyback
of equity
|
|
-
|
(153)
|
(153)
|
Purchase of
treasury shares
|
|
(40)
|
-
|
-
|
Proceeds from
borrowings
|
|
510
|
389
|
-
|
Repayment of
borrowings
|
|
(58)
|
(417)
|
(441)
|
Repayment of lease
liabilities
|
|
(49)
|
(1)
|
(4)
|
Dividends paid to
company’s shareholders
|
|
(101)
|
(93)
|
(136)
|
Dividends paid to
non-controlling interest
|
|
-
|
-
|
(1)
|
Net
cash generated from / (used in) financing activities
|
|
265
|
(272)
|
(729)
|
|
|
|
|
|
Effects
of exchange rate changes on cash and cash equivalents
|
|
(2)
|
(3)
|
(49)
|
Net
decrease in cash and cash equivalents
|
|
(122)
|
(330)
|
(105)
|
|
|
|
|
|
Cash
and cash equivalents at beginning of period
|
|
525
|
630
|
630
|
Cash
and cash equivalents at end of period
|
|
403
|
300
|
525
|
|
|
|
|
all figures in £ millions
|
|
|
2019
|
|
|
|
1
January
|
|
|
|
|
Non-current
assets
|
|
|
|
Property, plant and
equipment (right-of-use assets)
|
|
|
435
|
Investment in joint
ventures and associates
|
|
|
(8)
|
Deferred income tax
assets
|
|
|
4
|
Trade
and other receivables
|
|
|
186
|
Current
assets
|
|
|
|
Trade
and other receivables
|
|
|
30
|
Non-current
liabilities
|
|
|
|
Financial
liabilities – borrowings
|
|
|
(792)
|
Deferred income tax
liabilities
|
|
|
13
|
Provisions for
other liabilities and charges
|
|
|
101
|
Other
liabilities
|
|
|
47
|
Current
liabilities
|
|
|
|
Financial
liabilities – borrowings
|
|
|
(112)
|
Trade
and other liabilities
|
|
|
10
|
Total
decrease in retained earnings at 1 January 2019
|
|
|
(86)
|
|
|
|
|
all figures in £ millions
|
|
|
2019
|
|
|
|
1
January
|
|
|
|
|
Operating lease
commitments disclosed at 31 December 2018
|
|
|
1,175
|
Discounted using
the lessee’s incremental borrowing rate at the date of
initial application
|
|
|
(267)
|
(Less):
commitments relating to short-term leases
|
|
|
(7)
|
Add:
adjustments relating to the different treatment of extension and
termination options
|
|
|
3
|
Additional
lease liability recognised at 1 January 2019
|
|
|
904
|
Analysed
as:
|
|
|
|
Current
lease liabilities
|
|
|
112
|
Non-current lease
liabilities
|
|
|
792
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Sales
by geography
|
|
|
|
|
North
America
|
|
1,209
|
1,223
|
2,784
|
Core
|
|
403
|
383
|
806
|
Growth
|
|
217
|
259
|
539
|
Total
sales
|
|
1,829
|
1,865
|
4,129
|
|
|
|
|
|
Adjusted
operating profit by geography
|
|
|
|
|
North
America
|
|
79
|
64
|
362
|
Core
|
|
31
|
10
|
57
|
Growth
|
|
9
|
11
|
59
|
PRH
|
|
25
|
22
|
68
|
Total
adjusted operating profit
|
|
144
|
107
|
546
|
|
|
|
|
|
|
all figures in £ millions
|
|
North
|
Core
|
Growth
|
Total
|
|
|
America
|
|
|
|
|
|
|
|
|
|
2019
half year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
|
133
|
110
|
76
|
319
|
Products
transferred at a point in time (other)
|
|
-
|
-
|
16
|
16
|
Products and
services transferred over time
|
|
335
|
9
|
21
|
365
|
|
|
468
|
119
|
113
|
700
|
Assessments
|
|
|
|
|
|
Products
transferred at a point in time
|
|
53
|
22
|
2
|
77
|
Products and
services transferred over time
|
|
400
|
240
|
44
|
684
|
|
|
453
|
262
|
46
|
761
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
|
-
|
11
|
-
|
11
|
Products and
services transferred over time
|
|
288
|
11
|
58
|
357
|
|
|
288
|
22
|
58
|
368
|
|
|
|
|
|
|
Total
sales
|
|
1,209
|
403
|
217
|
1,829
|
|
|
|
|
|
|
all figures in £ millions
|
|
North
|
Core
|
Growth
|
Total
|
|
|
America
|
|
|
|
|
|
|
|
|
|
2018
half year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
|
276
|
81
|
105
|
462
|
Products
transferred at a point in time (other)
|
|
-
|
-
|
15
|
15
|
Products and
services transferred over time
|
|
265
|
25
|
8
|
298
|
|
|
541
|
106
|
128
|
775
|
Assessments*
|
|
|
|
|
|
Products
transferred at a point in time
|
|
49
|
26
|
-
|
75
|
Products and
services transferred over time
|
|
376
|
228
|
29
|
633
|
|
|
425
|
254
|
29
|
708
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
|
-
|
13
|
13
|
26
|
Products and
services transferred over time
|
|
257
|
10
|
89
|
356
|
|
|
257
|
23
|
102
|
382
|
|
|
|
|
|
|
Total
sales
|
|
1,223
|
383
|
259
|
1,865
|
|
|
|
|
|
|
2018
full year
|
|||||
Courseware
|
|
|
|
|
|
Products
transferred at a point in time (sale or return)
|
|
718
|
313
|
197
|
1,228
|
Products
transferred at a point in time (other)
|
|
-
|
-
|
35
|
35
|
Products and
services transferred over time
|
|
718
|
4
|
54
|
776
|
|
|
1,436
|
317
|
286
|
2,039
|
Assessments*
|
|
|
|
|
|
Products
transferred at a point in time
|
|
106
|
52
|
-
|
158
|
Products and
services transferred over time
|
|
710
|
390
|
87
|
1,187
|
|
|
816
|
442
|
87
|
1,345
|
Services
|
|
|
|
|
|
Products
transferred at a point in time
|
|
-
|
26
|
38
|
64
|
Products and
services transferred over time
|
|
532
|
21
|
128
|
681
|
|
|
532
|
47
|
166
|
745
|
|
|
|
|
|
|
Total
sales
|
|
2,784
|
806
|
539
|
4,129
|
|
|
|
|
|
|
* The analysis
of Assessment revenues for 2018 has been
re-presented to better reflect the nature of
sales.
|
|
|
|
|
|
|
all figures in £ millions
|
North
America
|
Core
|
Growth
|
PRH
|
Total
|
|
|
|
|
|
|
2019
half year
|
|||||
Adjusted operating
profit
|
79
|
31
|
9
|
25
|
144
|
Cost of
major restructuring
|
(52)
|
(7)
|
(4)
|
(1)
|
(64)
|
Intangible
charges
|
(31)
|
(3)
|
(9)
|
(6)
|
(49)
|
Other
net gains and losses
|
6
|
-
|
-
|
-
|
6
|
UK
pension GMP equalisation
|
-
|
-
|
-
|
-
|
-
|
Operating
profit
|
2
|
21
|
(4)
|
18
|
37
|
|
|
|
|
|
|
2018
half year
|
|||||
Adjusted operating
profit
|
64
|
10
|
11
|
22
|
107
|
Cost of
major restructuring
|
(18)
|
(4)
|
(2)
|
-
|
(24)
|
Intangible
charges
|
(35)
|
(4)
|
(11)
|
(7)
|
(57)
|
Other
net gains and losses
|
4
|
-
|
203
|
-
|
207
|
UK
pension GMP equalisation
|
-
|
-
|
-
|
-
|
-
|
Operating
profit
|
15
|
2
|
201
|
15
|
233
|
|
|
|
|
|
|
2018
full year
|
|||||
Adjusted operating
profit
|
362
|
57
|
59
|
68
|
546
|
Cost of
major restructuring
|
(78)
|
(16)
|
-
|
(8)
|
(102)
|
Intangible
charges
|
(72)
|
(8)
|
(19)
|
(14)
|
(113)
|
Other
net gains and losses
|
4
|
-
|
226
|
-
|
230
|
UK
pension GMP equalisation
|
-
|
(8)
|
-
|
-
|
(8)
|
Operating
profit
|
216
|
25
|
266
|
46
|
553
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Net
interest payable
|
|
(18)
|
(26)
|
(24)
|
Net
finance income in respect of retirement benefits
|
|
7
|
5
|
11
|
Finance
costs associated with transactions
|
|
-
|
(1)
|
(1)
|
Net
foreign exchange losses
|
|
(3)
|
(13)
|
(36)
|
Derivatives in a
hedge relationship
|
|
-
|
-
|
(4)
|
Derivatives not in
a hedge relationship
|
|
(10)
|
4
|
(1)
|
Net
finance costs
|
|
(24)
|
(31)
|
(55)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Finance
costs
|
|
(46)
|
(63)
|
(91)
|
Finance
income
|
|
22
|
32
|
36
|
Net
finance costs
|
|
(24)
|
(31)
|
(55)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Net
interest payable reflected in adjusted earnings
|
|
(18)
|
(26)
|
(24)
|
Other
net finance costs
|
|
(6)
|
(5)
|
(31)
|
Net
finance costs
|
|
(24)
|
(31)
|
(55)
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Profit
before tax
|
|
13
|
202
|
498
|
Cost of
major restructuring
|
2
|
64
|
24
|
102
|
Other
net gains and losses
|
2
|
(6)
|
(207)
|
(230)
|
Intangible
charges
|
2
|
49
|
57
|
113
|
Other
net finance costs
|
3
|
6
|
5
|
31
|
UK
pension GMP equalisation
|
2
|
-
|
-
|
8
|
Adjusted
profit before tax
|
|
126
|
81
|
522
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Income
tax benefit / (charge)
|
|
35
|
(13)
|
92
|
Tax
benefit on cost of major restructuring
|
|
(13)
|
(6)
|
(37)
|
Tax
(benefit) / charge on other net gains and losses
|
|
(37)
|
15
|
(31)
|
Tax
benefit on intangible charges
|
|
(12)
|
(14)
|
(18)
|
Tax
benefit on other net finance costs
|
|
(1)
|
(1)
|
(6)
|
Tax
benefit on UK pension GMP equalisation
|
|
-
|
-
|
(2)
|
Tax
amortisation benefit on goodwill and intangibles
|
|
5
|
3
|
29
|
Adjusted
income tax (charge) / benefit
|
|
(23)
|
(16)
|
27
|
|
|
|
|
|
Tax
rate reflected in statutory earnings
|
|
(269.2)%
|
6.4%
|
(18.5)%
|
Tax
rate reflected in adjusted earnings
|
|
18.0%
|
20.0%
|
(5.2)%
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Earnings for the
period
|
|
48
|
189
|
590
|
Non-controlling
interest
|
|
(1)
|
(1)
|
(2)
|
Earnings
attributable to equity shareholders
|
|
47
|
188
|
588
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares (millions)
|
|
775.6
|
779.0
|
778.1
|
Effect
of dilutive share options (millions)
|
|
0.5
|
0.6
|
0.6
|
Weighted average
number of shares (millions) for diluted earnings
|
776.1
|
779.6
|
778.7
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share
|
|
|
|
|
Basic
|
|
6.1p
|
24.1p
|
75.6p
|
Diluted
|
|
6.1p
|
24.1p
|
75.5p
|
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
note
|
Statutory
income statement
|
Cost of
major restructuring
|
Other
net gains and losses
|
Intangible
charges
|
Other
net finance costs
|
Impact
of GMP equalisation
|
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 period
|
|
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
|
Impact
of GMP equalisation
|
Tax
amortisation benefit
|
Adjusted
income statement
|
|
|
|
|
|
|
|
|
|
|
2018
half year
|
|||||||||
Operating
profit
|
2
|
233
|
24
|
(207)
|
57
|
-
|
-
|
-
|
107
|
Net
finance costs
|
3
|
(31)
|
-
|
-
|
-
|
5
|
-
|
-
|
(26)
|
Profit
before tax
|
4
|
202
|
24
|
(207)
|
57
|
5
|
-
|
-
|
81
|
Income
tax
|
5
|
(13)
|
(6)
|
15
|
(14)
|
(1)
|
-
|
3
|
(16)
|
Profit
for the period
|
|
189
|
18
|
(192)
|
43
|
4
|
-
|
3
|
65
|
Non-controlling
interest
|
|
(1)
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Earnings
|
|
188
|
18
|
(192)
|
43
|
4
|
-
|
3
|
64
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions)
|
|
|
|
779.0
|
|||||
Weighted
average number of shares (millions) for diluted
earnings
|
|
|
|
779.6
|
|||||
|
|
|
|
|
|||||
Adjusted
earnings per share (basic)
|
|
|
|
8.2p
|
|||||
Adjusted
earnings per share (diluted)
|
|
|
|
8.2p
|
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
note
|
Statutory
income statement
|
Cost of
major restructuring
|
Other
net gains and losses
|
Intangible
charges
|
Other
net finance costs
|
Impact
of GMP equalisation
|
Tax
amortisation benefit
|
Adjusted
income statement
|
|
|
|
|
|
|
|
|
|
|
2018
full year
|
|||||||||
Operating
profit
|
2
|
553
|
102
|
(230)
|
113
|
-
|
8
|
-
|
546
|
Net
finance costs
|
3
|
(55)
|
-
|
-
|
-
|
31
|
-
|
-
|
(24)
|
Profit
before tax
|
4
|
498
|
102
|
(230)
|
113
|
31
|
8
|
-
|
522
|
Income
tax
|
5
|
92
|
(37)
|
(31)
|
(18)
|
(6)
|
(2)
|
29
|
27
|
Profit
for the period
|
|
590
|
65
|
(261)
|
95
|
25
|
6
|
29
|
549
|
Non-controlling
interest
|
|
(2)
|
-
|
-
|
-
|
-
|
-
|
-
|
(2)
|
Earnings
|
|
588
|
65
|
(261)
|
95
|
25
|
6
|
29
|
547
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (millions)
|
|
|
|
778.1
|
|||||
Weighted
average number of shares (millions) for diluted
earnings
|
|
|
|
778.7
|
|||||
|
|
|
|
|
|||||
Adjusted
earnings per share (basic)
|
|
|
|
70.3p
|
|||||
Adjusted
earnings per share (diluted)
|
|
|
|
70.2p
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Amounts
recognised as distributions to equity shareholders in the
period
|
|
101
|
93
|
136
|
|
|
|
|
|
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Average
rate for profits
|
|
1.29
|
1.38
|
1.34
|
Period
end rate
|
|
1.27
|
1.32
|
1.27
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Intangible
assets
|
|
-
|
72
|
168
|
Deferred income tax
assets
|
|
-
|
86
|
98
|
Trade
and other receivables
|
|
-
|
33
|
25
|
Non-current
assets
|
|
-
|
191
|
291
|
|
|
|
|
|
Intangible assets
– pre-publication
|
|
-
|
239
|
242
|
Inventories
|
|
-
|
58
|
55
|
Trade
and other receivables
|
|
-
|
119
|
60
|
Current
assets
|
|
-
|
416
|
357
|
|
|
|
|
|
Total
assets
|
|
-
|
607
|
648
|
|
|
|
|
|
Other
liabilities
|
|
-
|
(335)
|
(371)
|
Non-current
liabilities
|
|
-
|
(335)
|
(371)
|
|
|
|
|
|
Trade
and other liabilities
|
|
-
|
(183)
|
(202)
|
Current
liabilities
|
|
-
|
(183)
|
(202)
|
|
|
|
|
|
Total
liabilities
|
|
-
|
(518)
|
(573)
|
|
|
|
|
|
Net
assets
|
|
-
|
89
|
75
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Goodwill
|
|
2,189
|
2,156
|
2,111
|
Other
intangibles
|
|
873
|
911
|
898
|
Non-current
intangible assets
|
|
3,062
|
3,067
|
3,009
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Trade
payables
|
|
(234)
|
(205)
|
(311)
|
Sales
return liability
|
|
(90)
|
(122)
|
(173)
|
Accruals
|
|
(356)
|
(375)
|
(397)
|
Deferred
income
|
|
(398)
|
(304)
|
(387)
|
Other
liabilities
|
|
(265)
|
(284)
|
(287)
|
Trade
and other liabilities
|
|
(1,343)
|
(1,290)
|
(1,555)
|
|
|
|
|
|
Analysed
as:
|
|
|
|
|
Trade
and other liabilities – current
|
|
(1,209)
|
(1,173)
|
(1,400)
|
Other
liabilities – non-current
|
|
(134)
|
(117)
|
(155)
|
Total
trade and other liabilities
|
|
(1,343)
|
(1,290)
|
(1,555)
|
|
|
|
|
|
|
all figures in £ millions
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Intangible
assets
|
|
|
|
|
(101)
|
Intangible assets
– pre-publication
|
|
|
|
|
(238)
|
Inventories
|
|
|
|
|
(64)
|
Trade and other
receivables
|
|
|
|
|
(71)
|
Cash and cash
equivalents (excluding overdrafts)
|
|
|
|
|
(105)
|
Net deferred income
tax liabilities
|
|
|
|
|
(100)
|
Trade and
other liabilities
|
|
|
|
|
521
|
Cumulative
translation adjustment
|
|
|
|
|
(4)
|
Net
assets disposed
|
|
|
|
|
(162)
|
|
|
|
|
|
|
Cash
proceeds
|
|
|
|
|
20
|
Deferred
proceeds
|
|
|
|
|
172
|
Costs of
disposal
|
|
|
|
|
(24)
|
Gain
on disposal
|
|
|
|
|
6
|
|
|
|
|
|
|
Cash
flow from disposals
|
|
|
|
|
|
Proceeds –
current year disposals
|
|
|
|
|
20
|
Cash and cash
equivalents disposed
|
|
|
|
|
(105)
|
Costs and other
disposal liabilities paid
|
|
|
|
|
(15)
|
Net
cash outflow from disposals
|
|
|
|
|
(100)
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
Derivative
financial instruments
|
|
59
|
72
|
67
|
Trade
and other receivables – investment in finance
lease
|
|
184
|
-
|
-
|
Current
assets
|
|
|
|
|
Derivative
financial instruments
|
|
2
|
-
|
1
|
Trade
and other receivables – investment in finance
lease
|
|
30
|
-
|
-
|
Cash
and cash equivalents (excluding overdrafts)
|
|
417
|
330
|
568
|
Non-current
liabilities
|
|
|
|
|
Borrowings
|
|
(1,869)
|
(1,069)
|
(674)
|
Derivative
financial instruments
|
|
(46)
|
(58)
|
(36)
|
Current
liabilities
|
|
|
|
|
Borrowings
|
|
(141)
|
(33)
|
(46)
|
Derivative
financial instruments
|
|
(12)
|
(17)
|
(23)
|
Net
debt
|
|
(1,376)
|
(775)
|
(143)
|
|
Level
2
|
---Level
3---
|
Total
fair value
|
|
all figures in £ millions
|
Derivatives
|
FVOCI
investments
|
FVTPL -
Other
receivables
|
|
2019
half year
|
||||
|
|
|
|
|
Investments in
unlisted securities
|
-
|
118
|
-
|
118
|
Other
receivables
|
-
|
-
|
181
|
181
|
Derivative
financial instruments
|
61
|
-
|
-
|
61
|
Total
financial assets held at fair value
|
61
|
118
|
181
|
360
|
|
|
|
|
|
Derivative
financial instruments
|
(58)
|
-
|
-
|
(58)
|
Total
financial liabilities held at fair value
|
(58)
|
-
|
-
|
(58)
|
|
|
|
|
|
2018
half year
|
||||
|
|
|
|
|
Investments in
unlisted securities
|
-
|
86
|
-
|
86
|
Other
receivables
|
-
|
-
|
-
|
-
|
Derivative
financial instruments
|
72
|
-
|
-
|
72
|
Total
financial assets held at fair value
|
72
|
86
|
-
|
158
|
|
|
|
|
|
Derivative
financial instruments
|
(75)
|
-
|
-
|
(75)
|
Total
financial liabilities held at fair value
|
(75)
|
-
|
-
|
(75)
|
|
|
|
|
|
2018
full year
|
||||
|
|
|
|
|
Investments in
unlisted securities
|
-
|
93
|
-
|
93
|
Other
receivables
|
-
|
-
|
-
|
-
|
Derivative
financial instruments
|
68
|
-
|
-
|
68
|
Total
financial assets held at fair value
|
68
|
93
|
-
|
161
|
|
|
|
|
|
Derivative
financial instruments
|
(59)
|
-
|
-
|
(59)
|
Total
financial liabilities held at fair value
|
(59)
|
-
|
-
|
(59)
|
|
|
|
|
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
half
year
|
half
year
|
full
year
|
|
|
|
|
|
Investments
in unlisted securities
|
|
|
|
|
At
beginning of year
|
|
93
|
77
|
77
|
Exchange
differences - OCI
|
|
-
|
2
|
3
|
Additions
|
|
7
|
5
|
13
|
Fair
value movements - OCI
|
|
18
|
2
|
8
|
Disposals
|
|
-
|
-
|
(8)
|
At
end of period
|
|
118
|
86
|
93
|
|
|
|
|
|
all figures in £ millions
|
|
2019
|
2018
|
2018
|
|
|
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
|
189
|
590
|
Income
tax
|
|
(35)
|
13
|
(92)
|
Depreciation,
amortisation and impairment charges
|
|
158
|
123
|
253
|
Net
profit on disposal of businesses
|
|
(6)
|
(207)
|
(230)
|
Charges
relating to GMP equalisation
|
|
-
|
-
|
8
|
Net
loss / (profit) on disposal of fixed assets
|
|
2
|
6
|
(85)
|
Disposal of right
of use assets held under leases
|
|
(12)
|
-
|
-
|
Net
finance costs
|
|
24
|
31
|
55
|
Share
of results of joint ventures and associates
|
|
(18)
|
(15)
|
(44)
|
Net
foreign exchange adjustment
|
|
4
|
8
|
28
|
Share-based payment
costs
|
|
14
|
19
|
37
|
Pre-publication
|
|
(24)
|
(13)
|
(37)
|
Inventories
|
|
(58)
|
(19)
|
(10)
|
Trade
and other receivables
|
|
1
|
(16)
|
(15)
|
Trade
and other liabilities
|
|
(227)
|
(241)
|
35
|
Retirement benefit
obligations
|
|
2
|
(4)
|
(9)
|
Provisions for
other liabilities and charges
|
|
10
|
(5)
|
63
|
Net
cash (used in) / generated from operations
|
|
(117)
|
(131)
|
547
|
|
|
|
|
|
all figures in £ millions
|
note
|
2019
|
2018
|
2018
|
|
|
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)
|
(131)
|
547
|
Dividends from
joint ventures and associates
|
|
15
|
66
|
117
|
Less:
re-capitalisation dividends from PRH
|
|
-
|
(51)
|
(50)
|
Purchase of
PPE
|
|
(38)
|
(33)
|
(74)
|
Acquisition of new
right-of-use lease assets
|
|
(6)
|
-
|
-
|
Proceeds from sale
of PPE
|
|
-
|
-
|
128
|
Disposal of
right-of-use lease assets
|
|
14
|
-
|
-
|
Purchase of
intangible assets
|
|
(57)
|
(80)
|
(130)
|
Add
back: net costs paid for / (proceeds from) major
restructuring
|
|
60
|
27
|
(25)
|
Operating
cash flow
|
|
(129)
|
(202)
|
513
|
Operating tax
paid
|
|
(8)
|
(8)
|
(43)
|
Net
operating finance costs paid
|
|
(31)
|
(18)
|
(22)
|
Operating
free cash flow
|
|
(168)
|
(228)
|
448
|
Net
(cost paid for) / proceeds from major restructuring
|
|
(60)
|
(27)
|
25
|
Free
cash flow
|
|
(228)
|
(255)
|
473
|
Dividends paid
(including to non-controlling interest)
|
|
(101)
|
(93)
|
(137)
|
Net
movement of funds from operations
|
|
(329)
|
(348)
|
336
|
Acquisitions and
disposals
|
|
(150)
|
94
|
92
|
Re-capitalisation
dividends from PRH
|
|
-
|
51
|
50
|
Loans
(advanced) / repaid
|
|
(10)
|
46
|
46
|
New
equity
|
|
3
|
3
|
6
|
Buyback
of equity
|
|
-
|
(153)
|
(153)
|
Purchase of
treasury shares
|
|
(40)
|
-
|
-
|
Other
movements on financial instruments
|
|
(10)
|
1
|
(6)
|
Net
movement of funds
|
|
(536)
|
(306)
|
371
|
Exchange movements
on net debt
|
|
(9)
|
(37)
|
(82)
|
Movement
in net debt
|
|
(545)
|
(343)
|
289
|
Opening
net debt
|
|
(143)
|
(432)
|
(432)
|
Adjustment on
initial application of IFRS 16
|
|
(688)
|
-
|
-
|
Closing
net debt
|
15
|
(1,376)
|
(775)
|
(143)
|
|
PEARSON
plc
|
|
|
Date: 26
July 2019
|
|
|
By: /s/
NATALIE WHITE
|
|
|
|
------------------------------------
|
|
Natalie
White
|
|
Deputy
Company Secretary
|