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    Pearson Interim Results for the six months to 30th June 2025 (Unaudited)

    8/1/25 2:10:00 AM ET
    $PSO
    Books
    Consumer Discretionary
    Get the next $PSO alert in real time by email

    Continued strategic and operational progress against medium term strategy. On track to deliver 2025 guidance with stronger growth expected in H2.

    LONDON, Aug. 1, 2025 /PRNewswire/ --

    (PRNewsfoto/Pearson Education, Inc.)

    Financial Highlights

    £m

    H1

    2025

    vs H1

    2024



    £m

    H1

    2025

    H1

    2024

    Business performance

    Statutory results

    Sales

    1,722

    +2% 1

    Sales

    1,722

    1,754

    Adjusted operating profit

    242

    +2% 1

    Operating profit

    240

    219

    Operating cash flow

    126

    £(3)m

    Profit for the period

    166

    158

    Free cash flow

    156

    +£129m

    Net cash generated from operations

    188

    185

    Adjusted earnings per share

    24.5p

    (4)%2

    Basic earnings per share

    24.8p

    23.1p

    Highlights
    • Group sales1 up 2% underlying with each business unit performing broadly in line with our expectations.
    • Adjusted operating profit1 up 2% underlying to £242m.
    • Strong free cash performance up £129m to £156m, including the receipt of £114m State Aid tax recovery.
    • Interim dividend up 5% and £350m share buyback well underway, with ongoing balance sheet strength.
    • On track to deliver 2025 guidance with stronger growth expected in H2.
    • Continued strategic and operational progress, including:
      • Strategic partnerships with Microsoft, AWS, and most recently, Google Cloud, progressing AI transformation agenda (link here);
      • Enterprise business building momentum, with new partners such as HCLTech (link here);
      • Continuing to develop product suite and apply innovative technologies including new "Go Deeper" feature within our AI-powered study tools and launch of Pearson English Express Test (link here);
      • Accelerating access to adjacent markets, with a strategic collaboration with McGraw Hill in formative assessments (link here);
      • Completed the acquisition of eDynamic Learning, adding a core pillar to our Early Careers strategy (link here).

    Omar Abbosh, Pearson's Chief Executive, said:

    "We are on track to deliver the three priorities we set out for the year, with performance to date in line with our expectations, and are confident of stronger growth in the second half. We are making rapid progress with bringing AI-powered products to market and are scaling and enhancing our enterprise business with a range of new partnerships and deals. Our sharp focus on rigorous execution and continuous innovation is driving progress against our strategy, improving Pearson's agility, efficiency and resilience, and positioning us to deliver consistent mid-single digit sales growth over the medium term." 

    Group sales1 up 2% underlying in H1 2025
    • Assessment & Qualifications sales were up 2% with strong growth in Clinical Assessments and UK & International Qualifications, partially offset by declines in Pearson VUE and US Student Assessment. Pearson VUE decline was driven by the pause in a contract delivered in 2024 which will recommence in H2 2025, and headwinds in PDRI, which has been impacted by US federal government hiring and spend reductions which we expect to continue in the second half.
    • Virtual Learning sales were down 1%, as expected, due to the final portion of the impact of previously announced school losses. 2024/25 academic year enrolments increased 5% in the Spring semester on a same school basis, with favourable retention trends, underpinning our confidence in returning to growth in H2.
    • Higher Education sales were up 4%, benefiting from growth in Inclusive Access of 21% and US digital subscriptions of 3%. We continued to see good monetisation of our Study Prep tool, formerly known as Channels, and ongoing engagement with our AI-powered study tools.
    • English Language Learning sales were down 3%, in line with expectations, with Institutional impacted by a strong comparator period in H1 2024. Pearson Test of English (PTE) was flat against the prior period, performing well against a tough market backdrop.
    • Enterprise Learning & Skills sales were up 4%, with another solid performance in Vocational Qualifications and Enterprise Solutions building momentum.
    Adjusted operating profit1 up 2% on an underlying basis to £242m
    • Underlying performance driven by operating leverage on sales growth partially offset by inflation.
    • On a headline basis, profit was down 3% with positive underlying performance more than offset by translation currency headwinds. First half adjusted profit margin was flat against the prior period at 14% (H1 2024: 14%).
    • Adjusted net finance costs increased to £24m (H1 2024: £21m). The effective tax rate on adjusted profit before tax increased to 24.5% (H1 2024: 23.6%).
    • Adjusted earnings per share declined to 24.5p (H1 2024: 25.6p) with positive underlying trading performance, and a reduction in share count due to the share buyback programmes, more than offset by currency headwinds and increased interest.
    Good cash performance
    • Operating cash flow was in line with the prior period at £126m (H1 2024: £129m) with continued good working capital management offsetting currency headwinds.
    • Free cash flow was again strong up £129m to £156m (H1 2024: £27m) given the operating cash performance and the receipt of £114m State Aid tax recovery, inclusive of interest, in the period.
    Strong balance sheet supporting continued investment and shareholder returns
    • Net debt decreased £0.2bn to £1.0bn at 30th June 2025 (H1 2024: £1.2bn) as free cash flow was partially offset by dividends and the share buyback.
    • Proposed interim dividend of 7.8p (H1 2024: 7.4p), represents an increase of 5%.
    • Previously announced £350m share buyback programme well underway and is expected to complete in H2. As at 30th June 2025, £169m of shares had been repurchased representing 48% of the total programme.
    • Secured new three-year, $800m revolving credit facility, enhancing our liquidity and strategic flexibility.
    Statutory results
    • Sales decreased 2% on a headline basis to £1,722m (H1 2024: £1,754m) with currency movements partially offset by positive underlying business performance.
    • Statutory operating profit increased 10% on a headline basis to £240m (H1 2024: £219m) driven by operating leverage on sales growth, gains on disposals and the reversal of impairments on property assets, partially offset by inflation and currency headwinds.
    • Net cash generated from operations of £188m (H1 2024: £185m).
    • Statutory earnings per share of 24.8p (H1 2024: 23.1p).
    Continued operational and strategic progress
    Driving performance in the core business
    • In Assessment & Qualifications, Pearson VUE won several new contracts with continued strong customer retention supporting future growth. US Student Assessment also successfully renewed and extended several key contracts in the period. In UK & International Qualifications we continued to scale internationally. In Clinical Assessments we expanded our customer set with our first statewide adoption of our digital offering. The application of AI across our products continued with the launch of an AI-powered GCSE Exam Practice Assistant, as part of our collaboration with AWS.
    • In Virtual Learning, we completed the rollout of our new enrolment portal which we expect to support sales growth in the second half of the year. We are also embedding our career academies across the network ahead of fall back to school and are on track to open two new schools in H2 taking our total number of schools up to 42. We also successfully secured all six of our long term school contracts being renewed in H1. We continue to apply innovative technologies through integrating AI into our study tools, driving higher course scores and end-of-semester pass rates.
    • In Higher Education, we continued to build upon the successful monetisation of our Study Prep tool which we expanded into international markets in the first half of this year. We continue to rollout our AI-powered study tools across disciplines – including our new "Go Deeper" feature, which further supports students with engagement, new cognitive skills and higher order learning outcomes.
    • In English Language Learning, we announced a partnership with BorderPass, expanding our PTE go-to-market reach for international students and skilled migrants in Canada. We are also launching our new Pearson English Express Test which expands our addressable market, responding to demand for a trusted, accessible test for US-bound learners. Within Institutional we continue to expand internationally with customer wins in LATAM. We continue to make progress on the application of innovative technologies with the recent launch of AI-powered Smart Lesson Generator and Digital Language Tutor.
    • In Enterprise Learning & Skills, Vocational Qualifications delivered a solid performance in the period with several new contract wins supporting pipeline growth, including apprenticeship courses with the UK Ministry of Defence, T Levels in Health and Science, and International BTEC expansion. Within Enterprise Solutions we announced strategic partnerships with Microsoft, AWS and Google Cloud and are building momentum in our Enterprise approach, with new partners such as HCLTech. We have made enhancements to our talent assessment platform, TalentLens, through combining capabilities with PDRI's secure and scalable Palladium offering. We have also enabled third party credential uploads onto the Credly platform, to advance our goal of Credly becoming the most complete source of verified learning and skills data globally.
    Progress in unlocking faster growth adjacent market opportunities
    • Higher Education recently completed the acquisition of eDynamic Learning, a leading Career and Technical Education (CTE) curriculum solutions provider for an enterprise value of $225m, enabling us to broaden capabilities and scale our position in the fast-growing Early Careers space.
    • We have operationalised our dedicated K-12 sales team within Higher Education, enabling us to expand and strengthen customer relationships with US school administrators as the demand for college and career readiness programmes grows.
    • Pearson VUE successfully launched the Pearson Skilling Suite and continues to make progress building out its test prep business.
    • Within US Student Assessment we announced an exclusive partnership with McGraw Hill to integrate our leading interim assessment capabilities directly into McGraw Hill's K-12 curriculum solutions, unlocking go-to-market opportunities in formative assessment.
    Outlook
    Reaffirm 2025 guidance
    • We continue to expect sales growth and adjusted operating profit in line with market expectations4 for 2025 with stronger sales growth in H2, in particular in Q4. We outline our 2025 guidance later in this release.
    • The acquisition of eDynamic Learning is not expected to have a material impact to 2025 guidance given near term integration costs and the acquisition accounting for deferred revenue.
    Medium term outlook
    • Beyond 2025, Pearson is positioned to deliver a mid-single digit underlying sales growth CAGR, sustained margin improvement that will equate to an average increase of 40 basis points per annum and strong free cash conversion5, in the region of 90% to 100%, on average, across the period.
    Contacts

    Investor Relations

    Alex Shore

    Steph Crinnegan

     +44 (0) 7720 947 853

     +44 (0) 7780 555 351



    Gemma Terry

    Brennan Matthews

     +44 (0) 7841 363 216

     +1 (332) 238-8785

    Media

    Teneo

    Pearson

     

    Ed Cropley

    Laura Ewart

     

     +44 (0) 7492 949 346

     +44 (0) 7798 846 805

    Results event

    Pearson's Interim Results presentation will

    be held today at 08:30 (BST).Register to join

    session virtually (link here).



    About Pearson

    At Pearson, our purpose is simple: to help people realise the life they imagine through learning. We believe that every learning opportunity is a chance for a personal breakthrough. That's why our Pearson employees are committed to creating vibrant and enriching learning experiences designed for real-life impact. We are the world's lifelong learning company, serving customers with digital content, assessments, qualifications, and data. For us, learning isn't just what we do. It's who we are. Visit us at pearsonplc.com.

    Notes

    Forward looking statements: Except for the historical information contained herein, the matters discussed in this statement include forward-looking statements. In particular, all statements that express forecasts, expectations and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability of financing, anticipated cost savings and synergies and the execution of Pearson's strategy, are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in future. They are based on numerous assumptions regarding Pearson's present and future business strategies and the environment in which it will operate in the future. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including a number of factors outside Pearson's control. These include international, national and local conditions, as well as competition. They also include other risks detailed from time to time in Pearson's publicly-filed documents and you are advised to read, in particular, the risk factors set out in Pearson's latest annual report and accounts, which can be found on its website (www.pearsonplc.com). Any forward-looking statements speak only as of the date they are made, and Pearson gives no undertaking to update forward-looking statements to reflect any changes in its expectations with regard thereto or any changes to events, conditions or circumstances on which any such statement is based. Readers are cautioned not to place undue reliance on such forward-looking statements.

    Operational review

     

    £m

     

    H1 2025

     

    H1 20243

    Headline

    growth

    Underlying

    growth1

    Sales

    Assessment & Qualifications

    802

    811

    (1) %

    2 %

    Virtual Learning

    242

    254

    (5) %

    (1) %

    Higher Education

    337

    336

    0 %

    4 %

    English Language Learning

    171

    188

    (9) %

    (3) %

    Enterprise Learning & Skills

    170

    165

    3 %

    4 %

    Total

    1,722

    1,754

    (2) %

    2 %











    Adjusted operating profit/(loss)

    Assessment & Qualifications

    170

    187

    (9) %

    (6) %

    Virtual Learning

    39

    31

    26 %

    32 %

    Higher Education

    (3)

    (7)

    57 %

    75 %

    English Language Learning

    (7)

    4

    (275) %

    (200) %

    Enterprise Learning & Skills

    43

    35

    23 %

    20 %

    Total

    242

    250

    (3) %

    2 %



    1Throughout this announcement: a) Growth rates are stated on an underlying basis unless otherwise stated. Underlying growth rates exclude currency movements, and portfolio changes. b) The 'business performance' measures are non-GAAP measures and reconciliations to the equivalent statutory heading under IFRS are included in notes to the attached condensed consolidated financial statements 2, 3, 4, 6 and 12.

    2 Headline growth rate.

    3In January 2025, the Group announced that Workforce Skills would evolve to become Enterprise Learning & Skills, incorporating our IT Pro business which was previously in Higher Education. Comparative figures have been restated to reflect the move between segments, resulting in £22m of sales and £6m of adjusted operating profit being transferred from Higher Education to Enterprise Learning & Skills for the six months ended 30 June 2024. The full year 2024 impact is £45m of sales and £12m of adjusted operating profit.

     

    Assessment & Qualifications

    In Assessment & Qualifications, sales increased 2% on an underlying basis and declined 1% on a headline basis due to currency movements offsetting trading. Adjusted operating profit decreased 6% in underlying terms due to operating leverage on sales growth more than offset by cost phasing, and 9% in headline terms due to this and currency movements.

    Pearson VUE sales declined 3% on an underlying basis driven by the pause in a contract delivered in 2024 which will recommence in H2 2025, and headwinds in PDRI, which has been impacted by US federal government hiring and spend reductions which we expect to continue in the second half.

    In US Student Assessment, sales decreased 1% in underlying terms due to changes in timing of delivery.

    In Clinical Assessment, sales increased 11% in underlying terms due to the continued traction of our products in the market, pricing and digital product growth.

    In UK and International Qualifications, sales increased 10% in underlying terms driven by volume, pricing and strong International growth.

    Virtual Learning

    Virtual Learning sales were down 1% on an underlying basis, as expected, due to the final portion of the impact of previously announced school losses. On a headline basis sales were down 5% due to this and currency movements. 2024/25 academic year enrolments increased 5% in the Spring semester on a same school basis and grew 7% including new school openings. We have also seen favorable retention trends in H1. Adjusted operating profit increased 32% in underlying terms driven by cost savings and phasing partially offset by trading, and increased 26% in headline terms due to this and currency movements.

    Higher Education

    In Higher Education, sales increased 4% on an underlying basis, benefitting from growth in Inclusive Access of 21% and US digital subscriptions of 3%. We continued to see good monetisation of our Study Prep tool and ongoing engagement with our AI study tools. Sales were flat on a headline basis as underlying growth was offset by currency movements. Adjusted operating profit increased in underlying terms driven by operating leverage on sales growth, with the headline result also reflecting currency movements.

    English Language Learning

    In English Language Learning, sales were down 3% on an underlying basis, in line with expectations, with our Institutional business performing well in Q2 but impacted by a strong comparator period in H1 last year. PTE sales were flat, performing well against a tough market backdrop, with volumes decreasing 10%. Sales were down 9% on a headline basis due to this and currency movements. Adjusted operating profit decreased due to the decline in trading and decreased in headline terms due to this and currency movements.

    Enterprise Learning & Skills

    In Enterprise Learning & Skills, sales were up 4% on an underlying basis and 3% on a headline basis. Adjusted operating profit increased by 20% in underlying terms due to operating leverage on sales and increased 23% in headline terms due to this and currency movements.

    Vocational Qualifications delivered solid growth while Enterprise Solutions improved quarter on quarter as we build momentum in our Enterprise approach and related sales capability, including new wins such as HCLTech.

    2025 guidance summary

    Underlying Sales growth

     

    Group

    In line with market expectations4with stronger sales growth in H2, in particular in Q4.

    Assessment & Qualifications

    Sales to grow low to mid-single digit. Growth will be H2 weighed, in particular to Q4, due to new and renewed contracts and the new test prep business.

    Virtual Learning

    Return to growth in H2, and for the full year, driven by enrolment increases, partially from new school openings, for the 25/26 academic year.

    Higher Education

    Sales growth in 2025 will be higher than in 2024 as we build on the successful results of our sales team transformation and product innovations, particularly using AI.

    English Language Learning

    Sales growth will moderate given the impacts of elections on immigration rates in 2025 affecting our PTE business, which is expected to decline in the year. We expect growth to be H2 weighted, in particular to Q4. We remain confident in the medium term outlook given demographic projections.  

    Enterprise Learning & Skills

    Sales to grow high single digit with Vocational Qualifications seeing solid growth and the addition of several new contracts for Enterprise Solutions. Growth will increase quarter on quarter supported by recent customer annoucements and pipeline activity.

    Group Profit

    Adjusted Operating Profit

    In line with market expectations4.

    Interest

    Adjusted net finance costs of c.£65m.

    Tax rate

    We expect the effective tax rate on adjusted profit before tax to be between 24% and 25%.

    Cash flow

    We expect a free cash flow conversion5 of 90-100% plus the £0.1bn State Aid repayment which was received in full during Q1 2025.

    FX

    Every 1c movement in GBP:USD rate equates to approximately £5m adjusted operating profit impact.



    42025 consensus on the Pearson website dated 27th January 2025; underlying sales growth 4.4%, adjusted operating profit of £656m at £:$ 1.23.  Taking the average FX rate for H1 2025 (£:$1.31) and assuming the July 2025 month end rate of (£:$1.32) for the rest of the year, results in an implied FX rate for the full year of £:$1.32. This results in an updated adjusted operating profit of c.£611m.   

    5Free cash flow conversion calculated as free cash flow divided by adjusted earnings.

     

    Exchange rates

    H1 2025

    H1 2024

    FY 2024

    £:$







    Average rate for profits

    1.31

    1.26

    1.28

    Period end rate

    1.37

    1.26

    1.25

     

    FINANCIAL REVIEW

    Operating result

    Sales for the six months to 30 June 2025 decreased on a headline basis by £32m or 2% from £1,754m for the six months to 30 June 2024 to £1,722m for the same period in 2025 and adjusted operating profit decreased by 3% on a headline basis to £242m in the first half of 2025 compared to £250m in the first half of 2024 (for a reconciliation of this measure see note 2 to the condensed consolidated financial statements).

    The headline basis simply compares the reported results for the six months to 30 June 2025 with those for the equivalent period in the prior year. We also present sales and profits on an underlying basis which excludes the effects of exchange, the effect of portfolio changes arising from acquisitions and disposals and the impact of adopting new accounting standards that are not retrospectively applied, when relevant. Our portfolio change is calculated by excluding sales and profits made by businesses disposed in 2024 or 2025 and by ensuring the contribution from acquisitions is comparable year on year. For prior year acquisitions, the corresponding pre-acquisition period is excluded from the current year. Portfolio changes mainly relate to the disposal of Copp Clark in 2025.

    On an underlying basis, sales increased by 2% in the first six months of 2025 compared to the equivalent period in 2024 and adjusted operating profit increased by 2%. Currency movements decreased sales by £58m and adjusted operating profit by £11m, and portfolio changes had no impact on sales and decreased adjusted operating profit by £1m. There were no new accounting standards adopted in the first half of 2025 that impacted sales or profits.

    Adjusted operating profit includes the results from discontinued operations when relevant but excludes charges for acquired intangible amortisation and impairment, acquisition related costs, gains and losses arising from disposals, the cost of major reorganisation, when relevant, property charges and one off-costs related to the UK pension scheme. A summary of these adjustments is included below and in note 2 to the condensed consolidated financial statements.











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Operating profit



    240

    219

    541

    Add back: Cost of major reorganisation



    -

    -

    (2)

    Add back: Intangible charges



    20

    20

    41

    Add back: UK pension discretionary increase



    -

    5

    13

    Add back: Other net gains and losses



    (7)

    6

    7

    Add back: Property charges



    (11)

    -

    -

    Adjusted operating profit



    242

    250

    600

    Costs of major reorganisation – In the first half of 2025 and 2024, there were no costs of major reorganisation. In the second half of 2024, there was a release of £2m relating to amounts previously accrued.

    Intangible amortisation charges to the end of June 2025 were £20m compared to a charge of £20m in the equivalent period in 2024.

    UK pension discretionary increases in 2024 relate to one-off pension increases awarded to certain cohorts of pensioners in response to the cost of living crisis. There were no such amounts in 2025.

    Other net gains and losses in 2025 relate to the gain on disposal of a business in our Higher Education division, a fair value gain relating to a previous disposal and costs relating to prior year acquisitions and disposals. Other net gains and losses in 2024 relate to costs related to prior year acquisitions and disposals, partially offset by a gain on the partial disposal of our investment in an associate.

    Property charges in 2025 are a gain of £11m, relating to reversals of impairments of property assets that were previously impaired through property charges. There are no such amounts in 2024.

    The reported operating profit of £240m in the first half of 2025 compares to a profit of £219m in the first half of 2024. The increase has been driven by operating leverage on sales growth, gains on disposals and the reversal of impairments on property assets, partially  offset by inflation and unfavourable foreign exchange movements.

    Due to seasonal bias in some of the Group's businesses, Pearson typically makes a higher proportion of its profits and operating cash flows in the second half of the year.

    Net finance costs

    Net finance costs increased on a headline basis from a net cost of £7m in the first half of 2024 to a net cost of £22m in the same period in 2025. The increase is primarily due to increased borrowing costs as a result of the bond issued in September 2024 and losses on derivatives held at fair value through profit and loss (FVTPL) compared to gains in 2024, offset by reduced fees related to drawings on the revolving credit facility and an increase in returns on cash deposits.

    Adjusted net finance costs reflected in adjusted earnings to 30 June 2025 was £24m, compared to a net cost of £21m in the first half of 2024. The increase is primarily due to increased borrowing costs as a result of the bond issued in September 2024, offset by reduced fees related to drawings on the revolving credit facility and an increase in returns on cash deposits.

    In the period to 30 June 2025, the total of items excluded from adjusted earnings was net income of £2m compared to net income of £14m in the first half of 2024. For a reconciliation of the adjusted measure see note 3 to the condensed consolidated financial statements.

    Taxation

    The reported tax on statutory earnings for the six months to 30 June 2025 was a charge of £52m compared to a charge of £54m in the period to 30 June 2024. This equates to an effective tax rate of 23.9% (2024: 25.5%), with the reduction from prior year principally being due to an impairment reversal which is not taxable.

    The total adjusted tax charge for the period was £54m (2024: £54m), corresponding to an effective tax rate on adjusted profit before tax of 24.5% (2024: 23.6%). For a reconciliation of the adjusted measure see note 4 to the condensed consolidated financial statements.

    In the first half of 2025, there was a net tax receipt of £35m (2024: £69m net tax payment). This includes a £97m repayment from HMRC in respect of the State Aid matter, with an additional £17m of associated interest also received in the period, classified within interest received in the cash flow statement. This repayment is a result of the Court of Justice of the European Union ('CJEU') handing down its decision on 19 September 2024 determining that the United Kingdom controlled foreign company group financing partial exemption ('FCPE') did not constitute State Aid, thereby resulting in a refund of the £97m of tax paid (plus £17m of interest) under the Charging Notices issued by HMRC in 2021. The balance excluding the State Aid repayment, principally relates to tax payments in the US and the UK.

    Other comprehensive income

    Included in other comprehensive income are the net exchange differences on translation of foreign operations. The loss on translation of £263m at 30 June 2025 compares to a loss at 30 June 2024 of £9m. The loss in 2025 arises from an overall weakening of the majority of currencies to which the Group is exposed, in particular the US dollar. A significant proportion of the Group's operations are based in the US and the US dollar closing rate at 30 June 2025 was £1:$1.37 compared to the opening rate of £1:$1.25. At the end of June 2024, the US dollar rate was £1:$1.26 compared to the opening rate of £1:$1.27.

    Also included in other comprehensive income at 30 June 2025 is an actuarial loss of £12m in relation to retirement benefit obligations. The loss arises largely from losses on assets and experience losses, offset by a decrease in liabilities driven by lower long-term inflation rates. The loss in 2025 compares to an actuarial gain at 30 June 2024 of £1m.

    Fair value losses of £6m (2024: losses of £4m) have been recognised in other comprehensive income and relate to movements in the value of investments in unlisted securities held at fair value through other comprehensive income (FVOCI).

    Cash flow and working capital

    Our operating cash flow measure is used to align cash flows with our adjusted profit measures (see note 12 to the condensed consolidated financial statements). Operating cash flow decreased on a headline basis by £3m from an inflow of £129m in the first half of 2024 to an inflow of £126m in the first half of 2025. The decrease is largely explained by good working capital management offset by unfavourable FX movements. 

    The equivalent statutory measure, net cash generated from operations, was an inflow of £188m in 2025 compared to an inflow of £185m in 2024. Compared to operating cash flow, this measure includes reorganisation costs but does not include regular dividends from associates. It also excludes capital expenditure on property, plant, equipment and software, and additions to right of use assets as well as disposal proceeds from the sale of property, plant, equipment and right of use assets (including the impacts of transfers to/from investment in finance lease receivable). In the first half of 2025, reorganisation cash outflow was £nil compared to £5m in the same period in 2024. 

    Free cash flow increased on a headline basis by £129m from £27m in 2024 to £156m in 2025. When compared to operating cash flow, free cash flow includes tax paid/received, net finance costs paid and net costs paid for major reorganisation. The increase year on year is mainly due to the receipt of monies in respect of the State Aid tax matter.

    In the first half of 2025, there was an overall decrease of £196m in cash and cash equivalents from £543m at the end of 2024 to £347m at 30 June 2025. The decrease in 2025 is primarily due to the cash inflow from operations of £188m, net tax received of £35m and net proceeds from borrowings of £46m, offset by dividends paid of £110m, share buyback programme payments of £158m, own share purchases of £72m, capital expenditure on property, plant, equipment and software of £62m and payments of lease liabilities of £38m.

    Liquidity and capital resources

    The Group's net debt increased from £853m at the end of 2024 to £1,027m at the end of June 2025. The increase is largely due to free cash flow of £156m including the State Aid repayment which are more than offset by the share buyback programme, other own share purchases and dividend payments. In May 2025, the Group repaid its €300m bond and closed out various related derivatives. In June 2025, the Group secured a new three-year, $800 million revolving credit facility (RCF). This facility can be utilised for general corporate purposes, enhancing our liquidity, and is in addition to the Group's existing RCF. At 30 June 2025, the Group had drawn £300m on its Revolving Credit Facilities.

    At 30 June 2025, the Group had approximately £1.2bn in total liquidity immediately available from cash and its RCFs maturing February and June 2028. In assessing the Group's ability to continue as a going concern for the period until 31 December 2026, the Board analysed a variety of downside scenarios, including a severe but plausible scenario, where the Group is impacted by a combination of all principal risks from H2 2025, as well as reverse stress testing to identify what would be required to either breach covenants or run out of liquidity. The severe but plausible scenario modelled a severe reduction in revenue, profit and operating cash flow from risks continuing throughout 2026. In all scenarios, the Group would maintain comfortable liquidity headroom and sufficient headroom against covenant requirements during the period under assessment even before modelling the mitigating effect of actions that management would take in the event that these downside risks were to crystallise. The directors concluded that the likelihood of the reverse stress test scenario was remote.

    Post-retirement benefits

    Pearson operates a variety of pension and post-retirement plans. The UK Group pension plan has by far the largest defined benefit section. This plan has a strong funding position and a surplus with a very substantially de-risked investment portfolio including approximately 50% of the assets in buy-in contracts. We have some smaller defined benefit sections in the US and Canada but, outside the UK, most of the companies operate defined contribution plans.

    The charge to profit in respect of worldwide pensions and retirement benefits amounted to £21m in the period to 30 June 2025 (30 June 2024: £30m) of which a charge of £33m (30 June 2024: £41m) was reported in operating profit and income of £12m (30 June 2024: £11m) was reported against other net finance costs. In the period to 30 June 2024, a charge of £5m related to one-off discretionary pension increases was excluded from adjusted operating profit, with no such amounts in 2025.

    The overall surplus on UK Group pension plans of £484m at the end of 2024 has decreased to a surplus of £482m at the end of June 2025. The decrease has arisen principally due to asset returns being lower than expected  and inflation over the period being slightly higher than was expected at the beginning of the year. In total, our worldwide net position in respect of pensions and other post-retirement benefits increased from a net asset of £450m at the end of 2024 to a net asset of £453m at the end of June 2025.

    Businesses acquired and disposed

    The Group made no acquisitions of subsidiaries in the first half of 2025 or 2024. The cash outflow in the first half of 2025 relating to acquisition of subsidiaries was £4m arising from the payment of deferred consideration in respect of prior year acquisitions. The cash outflow in the first half of 2024 relating to acquisitions of subsidiaries was £38m, arising from the payment of deferred consideration in respect of prior year acquisitions, mainly Credly and Mondly, which were acquired in 2022. In addition, there was a cash outflow relating to investments of £5m (2024: £7m).

    The Group disposed of Copp Clark in the first half of 2025 for consideration of £9m, resulting in a gain on disposal of £8m, which has been recorded within other net gains and losses. There were no disposals of subsidiaries in the first half of 2024. In 2025, the cash inflow relating to the disposal of businesses was £9m (2024: outflow of £6m).

    On 24 July 2025, the Group completed the acquisition of 100% of eDynamic Holdings LP ('eDynamic Learning'), a leading Career and Technical Education (CTE) curriculum solutions provider, having obtained all necessary approvals. Since the acquisition closed subsequent to the half year date, it has not been reflected in the interim financial statements. For further details, see note 15 to the condensed consolidated financial statements.

    Dividends

    The dividend accounted for in the six months to 30 June 2025 is the final dividend in respect of 2024 of 16.6p. An interim dividend for 2025 of 7.8p was declared by the Board in July 2025 and will be accounted for in the second half of 2025. The interim dividend will be paid on 15 September 2025 to shareholders who are on the register of members at close of business on 15 August 2025 (the Record Date). Shareholders may elect to reinvest their dividend in the Dividend Reinvestment Plan (DRIP). The last date for receipt of DRIP elections and revocations will be 22 August 2025. A Dividend Reinvestment Plan (DRIP) is provided by our Registrar, Computershare Investor Services. The DRIP enables the Company's shareholders to elect to have their cash dividend payments used to purchase the Company's shares. More information can be found at www.computershare.com/Investor

    Share buyback

    On 27 February 2025, the Board approved a £350m share buyback programme in order to return capital to shareholders. In the first half of 2025, c15m shares have been bought back at a cash cost of £158m. A £18m liability for the remainder of the first tranche of the programme plus related costs has been accrued as at 30 June 2025. The nominal value of the cancelled shares of £3m has been transferred to the capital redemption reserve. In the period from 1 to 30 July 2025, an additional c4m of shares have been repurchased.

    Principal risks and uncertainties

    In the 2024 Annual Report and Accounts, we set out our assessment of the principal risk issues that face the business under the categories: accreditation risk, artificial intelligence, content and channel risks, capability risk, competitive marketplace, customer expectations, portfolio change, and reputation and responsibility. We also noted in our 2024 Annual Report and Accounts that the Group continues to closely monitor significant near-term and emerging risks which have been identified as climate transition, economic changes, tax, sanctions and geopolitics.

    The principal risks and uncertainties are summarised below. The selection of principal risks will be reviewed in the second half of the year alongside the Group's long-term strategic planning process. However, these risks have not changed materially from those detailed in the 2024 Annual Report.

    Accreditation Risk

    Termination or modification of accreditation due to policy changes or failure to maintain the accreditation of our courses and assessments by states, countries, and professional associations, reducing their eligibility for funding or attractiveness to learners. Awarding bodies may also require modification of tests to continue to receive accreditation which may reduce the convenience to learners or increase the cost of delivery.

    Artificial Intelligence, Content and Channel Risk

    The risk that our intellectual property is harder to protect as a result of increased content generation through artificial intelligence and that our content and method of delivery (channel) is, or is perceived to be, insufficiently differentiated in terms of outcomes or learner experience. 

    Capability Risk

    Inability to meet our contractual obligations or to transform as required by our strategy, due to infrastructure, systems or organisational challenges.

    Competitive Marketplace

    Significant changes in our target markets could make those markets less attractive. This could be due to significant changes in demand or in supply, which impact the addressable market, market share and margins (e.g. changes in enrolments, in-sourcing of learning and assessment by customers, open educational resources, a shift from in-person to virtual learning or vice versa, or innovations in areas such as generative AI).

    Customer Expectations

    Rising end-user expectations increase the need to offer differentiated value propositions, risking margin pressure to meet these expectations and potential loss of sales if not successful.

    Portfolio Change

    Failure to effectively execute desired or required portfolio changes to promote scale or capability and increase focus on key business units and geographic markets, due to either execution failures or inability to secure transactions at appropriate valuations.

    Reputation and Responsibility

    Reputational and responsibility risks involve failing to meet obligations and demands of key stakeholders, including legal, regulatory, ethical and behavioural expectations. These risks extend beyond direct consequences to include broader societal and cultural perceptions.

    CONDENSED CONSOLIDATED INCOME STATEMENT

    for the period ended 30 June 2025













    all figures in £ millions

    note

    2025

    2024

    2024





    half year

    half year

    full year











    Continuing operations



















    Sales

    2

    1,722

    1,754

    3,552

    Cost of goods sold



    (843)

    (875)

    (1,741)

    Gross profit



    879

    879

    1,811











    Operating expenses



    (645)

    (654)

    (1,265)

    Other net gains and losses

    2

    7

    (6)

    (7)

    Share of results of joint ventures and associates



    (1)

    -

    2

    Operating profit

    2

    240

    219

    541











    Finance costs

    3

    (47)

    (57)

    (112)

    Finance income

    3

    25

    50

    81

    Profit before tax



    218

    212

    510

    Income tax

    4

    (52)

    (54)

    (75)

    Profit for the period



    166

    158

    435































    Attributable to:









    Equity holders of the company



    164

    157

    434

    Non-controlling interest



    2

    1

    1





















    Earnings per share from continuing operations (in pence per share)









       Basic

    5

    24.8p

    23.1p

    64.5p

       Diluted

    5

    24.5p

    22.8p

    63.5p













    The accompanying notes to the condensed consolidated financial statements form an integral part of the financial information.

     

    CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    for the period ended 30 June 2025













    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Profit for the period



    166

    158

    435











    Items that may be reclassified to the income statement









    Net exchange differences on translation of foreign operations



    (263)

    (9)

    (35)

    Attributable tax



    (1)

    -

    2











    Items that are not reclassified to the income statement









    Fair value loss on other financial assets



    (6)

    (4)

    (2)

    Attributable tax



    -

    -

    -











    Remeasurement of retirement benefit obligations



    (12)

    1

    5

    Attributable tax



    3

    -

    (2)

    Other comprehensive expense



    (279)

    (12)

    (32)

    Total comprehensive (expense) / income



    (113)

    146

    403





















    Attributable to:









    Equity holders of the company



    (114)

    145

    402

    Non-controlling interest



    1

    1

    1

     

    CONDENSED CONSOLIDATED BALANCE SHEET

    as at 30 June 2025













    all figures in £ millions

    note

    2025

    2024

    2024





    half year

    half year

    full year











    Property, plant and equipment



    203

    207

    216

    Investment property



    74

    75

    77

    Intangible assets

    9

    2,809

    3,050

    3,026

    Investments in joint ventures and associates



    11

    11

    12

    Deferred income tax assets



    48

    34

    52

    Financial assets – derivative financial instruments



    16

    4

    20

    Retirement benefit assets



    488

    491

    491

    Other financial assets



    126

    141

    141

    Income tax assets



    -

    41

    4

    Trade and other receivables



    108

    134

    125

    Non-current assets



    3,883

    4,188

    4,164











    Intangible assets – product development



    873

    941

    947

    Inventories



    71

    89

    74

    Trade and other receivables



    999

    1,081

    1,030

    Financial assets – derivative financial instruments



    38

    55

    31

    Current income tax assets



    14

    23

    103

    Cash and cash equivalents (excluding overdrafts)



    347

    332

    543

    Current assets



    2,342

    2,521

    2,728











    Assets classified as held for sale



    -

    -

    -

    Total assets



    6,225

    6,709

    6,892











    Financial liabilities – borrowings

    10

    (1,426)

    (1,300)

    (1,157)

    Financial liabilities – derivative financial instruments



    (3)

    (3)

    (4)

    Deferred income tax liabilities



    (68)

    (56)

    (63)

    Retirement benefit obligations



    (35)

    (42)

    (41)

    Provisions for other liabilities and charges



    (11)

    (14)

    (13)

    Other liabilities



    (64)

    (65)

    (83)

    Non-current liabilities



    (1,607)

    (1,480)

    (1,361)











    Trade and other liabilities



    (902)

    (1,036)

    (1,054)

    Financial liabilities – borrowings

    10

    (62)

    (313)

    (315)

    Financial liabilities – derivative financial instruments



    (11)

    (44)

    (54)

    Current income tax liabilities



    (13)

    (15)

    (32)

    Provisions for other liabilities and charges



    (25)

    (10)

    (23)

    Current liabilities



    (1,013)

    (1,418)

    (1,478)











    Liabilities classified as held for sale



    -

    -

    -

    Total liabilities



    (2,620)

    (2,898)

    (2,839)











    Net assets



    3,605

    3,811

    4,053











    Share capital



    163

    167

    166

    Share premium



    2,652

    2,644

    2,649

    Treasury shares



    (22)

    (15)

    (7)

    Reserves



    796

    1,000

    1,230

    Total equity attributable to equity holders of the company



    3,589

    3,796

    4,038

    Non-controlling interest



    16

    15

    15

    Total equity



    3,605

    3,811

    4,053



    The condensed consolidated financial statements were approved by the Board on 31 July 2025.

     

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    for the period ended 30 June 2025













    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























    2025 half year



    At 1 January 2025

    166

    2,649

    (7)

    41

    (14)

    376

    827

    4,038

    15

    4,053

    Profit for the period

    -

    -

    -

    -

    -

    -

    164

    164

    2

    166

    Other comprehensive income / (expense)

    -

    -

    -

    -

    (6)

    (262)

    (10)

    (278)

    (1)

    (279)

    Total comprehensive income / (expense)

    -

    -

    -

    -

    (6)

    (262)

    154

    (114)

    1

    (113)

    Equity-settled transactions1

    -

    -

    -

    -

    -

    -

    14

    14

    -

    14

    Issue of ordinary shares

    -

    3

    -

    -

    -

    -

    -

    3

    -

    3

    Buyback of equity

    (3)

    -

    -

    3

    -

    -

    (178)

    (178)

    -

    (178)

    Purchase of treasury shares

    -

    -

    (64)

    -

    -

    -

    -

    (64)

    -

    (64)

    Release of treasury shares

    -

    -

    49

    -

    -

    -

    (49)

    -

    -

    -

    Dividends

    -

    -

    -

    -

    -

    -

    (110)

    (110)

    -

    (110)

    At 30 June 2025

    163

    2,652

    (22)

    44

    (20)

    114

    658

    3,589

    16

    3,605





























    1.

    Equity-settled transactions are presented net of withholding taxes that the Group is obligated to pay on behalf of employees. The payments to the tax authorities are accounted for as a deduction from equity for the shares withheld.

     

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    for the period ended 30 June 2025













    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























    2024 half year

    At 1 January 2024

    174

    2,642

    (19)

    33

    (12)

    411

    745

    3,974

    14

    3,988

    Profit for the period

    -

    -

    -

    -

    -

    -

    157

    157

    1

    158

    Other comprehensive income / (expense)

    -

    -

    -

    -

    (4)

    (9)

    1

    (12)

    -

    (12)

    Total comprehensive income / (expense)

    -

    -

    -

    -

    (4)

    (9)

    158

    145

    1

    146

    Equity-settled transactions1

    -

    -

    -

    -

    -

    -

    16

    16

    -

    16

    Issue of ordinary shares

    -

    2

    -

    -

    -

    -

    -

    2

    -

    2

    Buyback of equity

    (7)

    -

    -

    7

    -

    -

    (204)

    (204)

    -

    (204)

    Purchase of treasury shares

    -

    -

    (30)

    -

    -

    -

    -

    (30)

    -

    (30)

    Release of treasury shares

    -

    -

    34

    -

    -

    -

    (34)

    -

    -

    -

    Dividends

    -

    -

    -

    -

    -

    -

    (107)

    (107)

    -

    (107)

    At 30 June 2024

    167

    2,644

    (15)

    40

    (16)

    402

    574

    3,796

    15

    3,811





    1.

    Equity-settled transactions are presented net of withholding taxes that the Group is obligated to pay on behalf of employees. The payments to the tax authorities are accounted for as a deduction from equity for the shares withheld.

     

    CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

    for the period ended 30 June 2025













    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























    2024 full year

    At 1 January 2024

    174

    2,642

    (19)

    33

    (12)

    411

    745

    3,974

    14

    3,988

    Profit for the period

    -

    -

    -

    -

    -

    -

    434

    434

    1

    435

    Other comprehensive income / (expense)

    -

    -

    -

    -

    (2)

    (35)

    5

    (32)

    -

    (32)

    Total comprehensive income / (expense)

    -

    -

    -

    -

    (2)

    (35)

    439

    402

    1

    403

    Equity-settled transactions1

    -

    -

    -

    -

    -

    -

    37

    37

    -

    37

    Tax on equity-settled transactions

    -

    -

    -

    -

    -

    -

    11

    11

    -

    11

    Issue of ordinary shares

    -

    7

    -

    -

    -

    -

    -

    7

    -

    7

    Buyback of equity

    (8)

    -

    -

    8

    -

    -

    (204)

    (204)

    -

    (204)

    Purchase of treasury shares

    -

    -

    (33)

    -

    -

    -

    -

    (33)

    -

    (33)

    Release of treasury shares

    -

    -

    45

    -

    -

    -

    (45)

    -

    -

    -

    Dividends

    -

    -

    -

    -

    -

    -

    (156)

    (156)

    -

    (156)

    At 31 December 2024

    166

    2,649

    (7)

    41

    (14)

    376

    827

    4,038

    15

    4,053





    1.

    Equity-settled transactions are presented net of withholding taxes that the Group is obligated to pay on behalf of employees. The payments to the tax authorities are accounted for as a deduction from equity for the shares withheld. 

     

    CONDENSED CONSOLIDATED CASH FLOW STATEMENT

    for the period ended 30 June 2025













    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Cash flows from operating activities









    Profit before tax



    218

    212

    510

    Net finance costs



    22

    7

    31

    Depreciation and impairment – PPE, investment property and assets held for sale



    28

    40

    77

    Amortisation and impairment – software



    57

    61

    117

    Amortisation and impairment – acquired intangible assets



    20

    20

    41

    Other net gains and losses



    (7)

    5

    5

    Product development capital expenditure



    (125)

    (130)

    (284)

    Product development amortisation



    139

    144

    291

    Share-based payment costs



    22

    23

    44

    Change in inventories



    (1)

    1

    15

    Change in trade and other receivables



    (37)

    (34)

    32

    Change in trade and other liabilities



    (122)

    (164)

    (99)

    Change in provisions for other liabilities and charges



    2

    (12)

    (1)

    Other movements



    (28)

    12

    32

    Net cash generated from operations



    188

    185

    811

    Interest paid



    (31)

    (41)

    (65)

    Tax received / (paid)



    35

    (69)

    (119)

    Net cash generated from operating activities



    192

    75

    627

    Cash flows from investing activities









    Acquisition of subsidiaries, net of cash acquired



    (4)

    (38)

    (39)

    Purchase of investments



    (5)

    (7)

    (7)

    Purchase of property, plant and equipment



    (14)

    (18)

    (33)

    Purchase of intangible assets



    (48)

    (40)

    (91)

    Disposal of subsidiaries, net of cash disposed



    9

    (6)

    (7)

    Proceeds from sale of property, plant and equipment



    3

    6

    6

    Lease receivables repaid including disposals



    9

    9

    18

    Interest received



    26

    13

    20

    Dividends received



    -

    -

    2

    Net cash used in investing activities



    (24)

    (81)

    (131)

    Cash flows from financing activities









    Proceeds from issue of ordinary shares



    3

    2

    7

    Buyback of equity



    (158)

    (278)

    (318)

    Settlement of share based payments



    (72)

    (37)

    (40)

    Repayment of borrowings



    (304)

    -

    (921)

    Proceeds from borrowings



    350

    495

    1,265

    Repayment of lease liabilities



    (38)

    (39)

    (78)

    Dividends paid to company's shareholders



    (110)

    (107)

    (156)

    Net cash (used in) / generated from financing activities



    (329)

    36

    (241)

    Effects of exchange rate changes on cash and cash equivalents



    (35)

    (7)

    (21)

    Net (decrease) /  increase in cash and cash equivalents



    (196)

    23

    234

    Cash and cash equivalents at beginning of period



    543

    309

    309

    Cash and cash equivalents at end of period



    347

    332

    543

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    1.     Basis of preparation

    The condensed consolidated financial statements have been prepared in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the UK's Financial Conduct Authority and in accordance with UK-adopted IAS 34 'Interim Financial Reporting'. The condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2024, which were prepared in accordance with UK-adopted International Accounting Standards and with the requirements of the Companies Act 2006 and in accordance with IFRS accounting standards as issued by the International Accounting Standards Board (IASB). In respect of accounting standards applicable to the Group, there is no difference between UK-adopted IASs and IFRS accounting standards as issued by the IASB.

    The condensed consolidated financial statements have also been prepared in accordance with the accounting policies set out in the 2024 Annual Report and have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities (including derivative financial instruments) at fair value. No new standards and interpretations that apply to annual reporting periods beginning on or after 1 January 2025 have had a material impact on the financial position of the Group.

    In assessing the Group's ability to continue as a going concern for the period until 31 December 2026, the Board analysed a variety of downside scenarios, including a severe but plausible scenario, where the Group is impacted by a combination of all principal risks from H2 2024, as well as reverse stress testing to identify what would be required to either breach covenants or run out of liquidity. The severe but plausible scenario modelled a severe reduction in revenue, profit and operating cash flow from risks continuing throughout 2026. At 30 June 2025, the Group had available liquidity of c£1.2bn, comprising central cash balances and the undrawn element of its $1.8bn Revolving Credit Facilities (RCFs) maturing February and June 2028, but which have options to extend the maturities until 2030. Even under a severe downside case, the Group would maintain comfortable liquidity headroom and sufficient headroom against covenant requirements during the period under assessment even before modelling the mitigating effect of actions that management would take in the event that these downside risks were to crystallise. The directors concluded that the likelihood of the reverse stress test scenario was remote.

    The directors have confirmed that they have a reasonable expectation that the Group has adequate resources to continue in operational existence and to meet its liabilities as they fall due for the assessment period to 31 December 2026. The condensed consolidated financial statements have therefore been prepared on a going concern basis.

    The preparation of condensed consolidated financial statements requires the use of certain critical accounting assumptions. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas requiring a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the condensed consolidated financial statements, have been set out in the 2024 Annual Report.

    The financial information for the year ended 31 December 2024 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The independent auditors' report on the full financial statements for the year ended 31 December 2024 was unqualified and did not contain an emphasis of matter paragraph or any statement under section 498 of the Companies Act 2006. The condensed consolidated financial statements and related notes for the six months to 30 June 2025 are unaudited but have been reviewed by the auditors and their independent review opinion is included at the end of these condensed consolidated financial statements.

    Operating segments – In January 2025, the Group announced that Workforce Skills would evolve to become Enterprise Learning and Skills, incorporating our IT Pro business which was previously within Higher Education. Comparative figures for 2024 have been restated to reflect this move between segments.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    1.     Basis of preparation continued

    Share buy back - On 27 February 2025, the Board approved a £350m share buyback programme in order to return capital to shareholders. Refer to the financial review for an update on the amounts bought back during the period.

    2.     Segment information

    The Group has five main global business units, which are each considered separate operating segments for management and reporting purposes. These five business units are Assessment & Qualifications, Virtual Learning, English Language Learning, Higher Education and Enterprise Learning and Skills. In January 2025, the Group announced that Workforce Skills would evolve to become Enterprise Learning and Skills, incorporating our IT Pro business which was previously within Higher Education. Comparative figures have been restated to reflect the move between segments, resulting in £22m of sales and £6m of adjusted operating profit being transferred from Higher Education to Enterprise Learning and Skills for the six months ended 30 June 2024 and £45m of sales and £12m of adjusted operating profit for the year ended 31 December 2024.











    all figures in £ millions



    2025

    20241

    20241





    half year

    half year

    full year











    Sales









    Assessment & Qualifications



    802

    811

    1,591

    Virtual Learning



    242

    254

    489

    English Language Learning



    171

    188

    420

    Enterprise Learning and Skills



    170

    165

    271

    Higher Education



    337

    336

    781

    Total sales



    1,722

    1,754

    3,552











    Adjusted operating profit









    Assessment & Qualifications



    170

    187

    368

    Virtual Learning



    39

    31

    66

    English Language Learning



    (7)

    4

    50

    Enterprise Learning and Skills



    43

    35

    20

    Higher Education



    (3)

    (7)

    96

    Total adjusted operating profit

    242

    250

    600



    1.         Comparative amounts have been restated to reflect the move between operating segments.

    There were no material inter-segment sales.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

    for the period ended 30 June 2025

    2.     Segment information continued

    The following table reconciles the Group's measure of segmental performance, adjusted operating profit, to statutory operating profit:











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Adjusted operating profit



    242

    250

    600

    Cost of major reorganisation



    -

    -

    2

    Intangible charges



    (20)

    (20)

    (41)

    UK pension discretionary increases



    -

    (5)

    (13)

    Other net gains and losses



    7

    (6)

    (7)

    Property charges



    11

    -

    -

    Operating profit

    240

    219

    541

    Adjusted operating profit is one of the Group's key business performance measures. The measure includes the operating profit from the total business but excludes charges for acquired intangibles amortisation and impairment, acquisition related costs, gains and losses arising from disposals, the cost of major reorganisation where relevant, property charges and one-off costs related to the UK pension scheme.

    Cost of major reorganisation – In the first half of 2025 and 2024, there were no costs of major reorganisation. In the second half of 2024, there was a release of £2m relating to amounts previously accrued.

    Intangible amortisation – These represent charges relating to intangibles acquired through business combinations. These charges are excluded as they reflect past acquisition activity and do not necessarily reflect the current year performance of the Group. Intangible amortisation charges in the first half of 2025 were £20m compared to a charge of £20m in the equivalent period in 2024.

    UK pension discretionary increases – Charges in 2024 relate to one-off pension increases awarded to certain cohorts of pensioners in response to the cost of living crisis. There were no such amounts in 2025.

    Other net gains and losses – These represent profits and losses on the sale of subsidiaries, joint ventures, associates and other financial assets and are excluded from adjusted operating profit in order to show the performance of the Group on a more comparable basis year on year. Other net gains and losses also includes costs related to business closures and acquisitions. Other net gains and losses in the first half of 2025 relate to the gain on disposal of a business in our Higher Education division, a fair value gain relating to a previous disposal and  costs relating to prior year acquisitions and disposals. Other net gains and losses in 2024 relate to costs related to prior year acquisitions and disposals, partially offset by a gain on the partial disposal of our investment in an associate.

    Property charges – In 2025, a gain of £11m relates to reversals of impairments of property assets that were previously impaired through property charges. There are no such charges in the first half of 2024.

    Adjusted operating profit should not be regarded as a complete picture of the Group's financial performance. For example, adjusted operating profit includes the benefits of major reorganisation programmes but excludes the significant associated costs, and adjusted operating profit excludes costs related to acquisitions, and the amortisation of intangibles acquired in business combinations, but does not exclude the associated revenues. The Group's definition of adjusted operating profit may not be comparable to other similarly titled measures reported by other companies.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

    for the period ended 30 June 2025

    2.     Segment information continued

    The Group derived revenue from the transfer of goods and services over time and at a point in time in the following major product lines:

    all figures in £ millions



    Assessment &

    Qualifications

    Virtual

    Learning

    English Language

    Learning

    Enterprise Learning

    and Skills

    Higher

    Education

    Total





















    2025 half year

    Courseware















    Products transferred at a point in time



    24

    -

    55

    18

    75

    172

    Products and services transferred over time



    12

    -

    4

    -

    262

    278





    36

    -

    59

    18

    337

    450

    Assessments















    Products transferred at a point in time



    86

    -

    4

    2

    -

    92

    Products and services transferred over time



    680

    -

    91

    129

    -

    900





    766

    -

    95

    131

    -

    992

    Services















    Products transferred at a point in time



    -

    -

    8

    -

    -

    8

    Products and services transferred over time



    -

    242

    9

    21

    -

    272





    -

    242

    17

    21

    -

    280

















    Total sales



    802

    242

    171

    170

    337

    1,722





















    2024 half year1

    Courseware















    Products transferred at a point in time



    28

    -

    60

    22

    69

    179

    Products and services transferred over time



    9

    -

    6

    -

    267

    282





    37

    -

    66

    22

    336

    461

    Assessments















    Products transferred at a point in time



    93

    -

    3

    3

    -

    99

    Products and services transferred over time



    681

    -

    97

    120

    -

    898





    774

    -

    100

    123

    -

    997

    Services















    Products transferred at a point in time



    -

    -

    12

    -

    -

    12

    Products and services transferred over time



    -

    254

    10

    20

    -

    284





    -

    254

    22

    20

    -

    296

















    Total sales



    811

    254

    188

    165

    336

    1,754



































    1.         Comparative amounts have been restated to reflect the move between operating segments.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    2.     Segment information continued

    all figures in £ millions



    Assessment &

    Qualifications

    Virtual

    Learning

    English Language

    Learning

    Enterprise Learning

    and Skills

    Higher

    Education

    Total





















    2024 full year1

    Courseware















    Products transferred at a point in time



    56

    -

    142

    46

    185

    429

    Products and services transferred over time



    17

    -

    13

    -

    596

    626





    73

    -

    155

    46

    781

    1,055

    Assessments















    Products transferred at a point in time



    184

    -

    11

    5

    -

    200

    Products and services transferred over time



    1,334

    -

    198

    179

    -

    1,711





    1,518

    -

    209

    184

    -

    1,911

    Services















    Products transferred at a point in time



    -

    -

    35

    -

    -

    35

    Products and services transferred over time



    -

    489

    21

    41

    -

    551





    -

    489

    56

    41

    -

    586

















    Total sales



    1,591

    489

    420

    271

    781

    3,552























    1.         Comparative amounts have been restated to reflect the move between operating segments.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

    for the period ended 30 June 2025

    3.     Net finance income / costs











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Net finance costs



    (22)

    (7)

    (31)

    Net finance income in respect of retirement benefits



    (12)

    (11)

    (21)

    Interest on deferred and contingent consideration



    -

    1

    2

    Fair value movements on investments held at FVTPL



    4

    8

    11

    Net foreign exchange gains



    3

    -

    3

    Fair value movements on derivatives



    3

    (12)

    (7)

    Interest on provisions for uncertain tax positions



    -

    -

    (2)

    Adjusted net finance costs



    (24)

    (21)

    (45)











    Analysed as:









    Finance costs



    (47)

    (57)

    (112)

    Finance income



    25

    50

    81

    Net finance costs



    (22)

    (7)

    (31)

    Adjusted net finance costs is the finance cost measure used in calculating adjusted earnings. Adjusted net finance costs primarily consists of interest costs related to bonds, the RCF and lease liabilities, partially offset by interest income on cash deposits and lease receivables. 

    The above table reconciles net finance income to adjusted net finance costs.

    Net finance income relating to retirement benefits has been excluded from our adjusted earnings as we believe the income statement presentation does not reflect the economic substance of the underlying assets and liabilities. Also excluded are interest costs relating to acquisition or disposal transactions as it is considered part of the acquisition cost or disposal proceeds rather than being reflective of the underlying financing costs of the Group. Foreign exchange, fair value movements on investments classified as FVTPL and other gains and losses on derivatives are excluded from adjusted earnings as they represent short-term fluctuations in market value and are subject to significant volatility. Other gains and losses may not be realised in due course as it is normally the intention to hold the related instruments to maturity. Interest on certain tax provisions is excluded from our adjusted measure in order to mirror the treatment of the underlying tax item.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

    for the period ended 30 June 2025

    4.     Income tax











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Income tax charge



    (52)

    (54)

    (75)

    Tax on cost of major reorganisation



    -

    -

    1

    Tax on other net gains and losses



    1

    -

    -

    Tax on intangible charges



    (5)

    (5)

    (10)

    Tax on UK pension discretionary increases



    -

    (1)

    (3)

    Tax on other net finance income



    1

    4

    5

    Tax amortisation benefit on goodwill and intangibles



    1

    2

    4

    State Aid provision release



    -

    -

    (63)

    Movement in provision for tax uncertainties



    -

    -

    6

    Other tax items



    -

    -

    (1)

    Adjusted income tax charge



    (54)

    (54)

    (136)











    Adjusted profit before tax



    218

    229

    555











    Tax rate reflected in statutory earnings



    23.9 %

    25.5 %

    14.7 %

    Tax rate reflected in adjusted earnings



    24.5 %

    23.6 %

    24.4 %

    The adjusted income tax charge excludes the tax benefit or charge on items that are excluded from the profit or loss before tax (see note 2). The adjusted tax charged in the period ended 30 June 2025 has been calculated by applying management's best estimate of the weighted average annual effective rate of tax which is expected to apply to the Group for the year ended 31 December 2025 to the adjusted profit before tax for the period ended 30 June 2025. Adjusting items have been tax effected on an item by item basis based on the applicable statutory tax rate in the country to which the item relates.

    The tax benefit from tax deductible goodwill and intangibles is added to the adjusted income tax charge as this benefit more accurately aligns the adjusted tax charge with the expected rate of cash tax payments.

    The statutory tax charge in the period ended 30 June 2025 is lower than the period ended 30 June 2024 due to an impairment reversal which is not taxable.

    The Group is within the scope of the UK legislation in relation to Pillar Two which was effective from 1 January 2024. Based on the most recent forecast financial information available for the constituent entities in the Group, the Pillar Two effective tax rates in most of the jurisdictions in which the Group operates are above 15%. However, there are a limited number of jurisdictions where the transitional safe harbour relief does not apply, including jurisdictions that may not meet the 16% effective tax rate threshold required to qualify for the effective tax rate safe harbour test in FY25. In these jurisdictions,  the Pillar Two effective tax rate is close to 15%. The Group does not expect a material exposure to Pillar Two income taxes in those jurisdictions. 

    In the first half of 2025, a repayment of £97m was received from HMRC in respect of State Aid. This repayment is a result of the Court of Justice of the European Union ('CJEU') handing down its decision on 19 September 2024 determining that the United Kingdom controlled foreign company group financing partial exemption ('FCPE') did not constitute State Aid, thereby resulting in a refund of the £97m of tax paid (plus interest) under the Charging Notices issued by HMRC in 2021.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

    for the period ended 30 June 2025

    5.     Earnings per share

    Basic earnings per share is calculated by dividing the profit or loss attributable to equity shareholders of the company (earnings) by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the company and held as treasury shares. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to take account of all dilutive potential ordinary shares and adjusting the profit attributable, if applicable, to account for any tax consequences that might arise from conversion of those shares.











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Earnings for the period



    166

    158

    435

    Non-controlling interest



    (2)

    (1)

    (1)

    Earnings attributable to equity shareholders



    164

    157

    434











    Weighted average number of shares (millions)



    661.5

    680.5

    673.0

    Effect of dilutive share options (millions)



    9.2

    6.9

    11.0

    Weighted average number of shares (millions) for diluted earnings



    670.7

    687.4

    684.0











    Earnings per share (in pence per share)









    Basic



    24.8p

    23.1p

    64.5p

    Diluted



    24.5p

    22.8p

    63.5p

     

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    6.     Adjusted earnings per share

    In order to show results from operating activities on a consistent basis, an adjusted earnings per share is presented which excludes certain items as set out below.

    Adjusted earnings is a non-GAAP financial measure and is included as it is a key financial measure used by management to evaluate performance and allocate resources to business segments. The measure also enables users of the accounts to more easily, and consistently, track the underlying operational performance of the Group and its business segments over time by separating out those items of income and expenditure relating to acquisition and disposal transactions, major reorganisation programmes and certain other items that are also not representative of underlying performance (see notes 2, 3 and 4 for further information and reconciliation to equivalent statutory measures). The adjusted earnings per share includes both continuing and discontinued businesses on an undiluted basis when relevant. The company's definition of adjusted earnings per share may not be comparable to other similarly titled measures reported by other companies.

    all figures in £ millions

    note

    2025

    2024

    2024





    half year

    half year

    full year











    Adjusted operating profit

    2

    242

    250

    600

    Adjusted net finance costs

    3

    (24)

    (21)

    (45)

    Adjusted income tax

    4

    (54)

    (54)

    (136)

    Non-controlling interest



    (2)

    (1)

    (1)

    Adjusted earnings



    162

    174

    418

    Weighted average number of shares (millions)



    661.5

    680.5

    673.0

    Weighted average number of shares (millions) for diluted earnings



    670.7

    687.4

    684.0

    Adjusted earnings per share - basic



    24.5p

    25.6p

    62.1p

    Adjusted earnings per share - diluted



    24.2p

    25.3p

    61.1p

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    7.     Dividends











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Amounts recognised as distributions to equity shareholders in the period



    110

    107

    156

    The directors are declaring an interim dividend of 7.8p per equity share, payable on 15 September 2025 to shareholders on the register at the close of business on 15 August 2025. This interim dividend, which will absorb an estimated £51m of shareholders' funds, has not been included as a liability as at 30 June 2025.

    8.     Exchange rates

    Pearson earns a significant proportion of its sales and profits in overseas currencies, the most important being the US dollar. The relevant rates are as follows:















    2025

    2024

    2024





    half year

    half year

    full year











    Average rate for profits



    1.31

    1.26

    1.28

    Period end rate



    1.37

    1.26

    1.25

    9.     Non-current intangible assets











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Goodwill



    2,285

    2,436

    2,437

    Other intangibles



    524

    614

    589

    Non-current intangible assets



    2,809

    3,050

    3,026

    There were no significant acquisitions or disposals in the first half of 2025 or 2024.

    Other movements in the goodwill balance relate to foreign exchange differences. Other movements in the intangibles balance relate to additions, amortisation and foreign exchange differences.

    The Group has assessed its remaining goodwill and intangibles for impairment triggers and concluded that a full goodwill impairment review is not required at 30 June 2025.

    The 2024 Annual Report sets out the key assumptions by segment. The discount rate, perpetuity growth rate and other assumptions used in the impairment review, and the sensitivity to changes in those assumptions remain broadly the same as the position outlined in the 2024 Annual Report. 

    There were no impairments to acquisition related or other intangibles in the first half of 2025 or 2024. 

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    10.     Net debt











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    Non-current assets









    Derivative financial instruments



    16

    4

    20

    Trade and other receivables – investment in finance lease



    55

    73

    64

    Current assets









    Derivative financial instruments



    38

    55

    31

    Trade and other receivables – investment in finance lease



    19

    19

    19

    Cash and cash equivalents (excluding overdrafts)



    347

    332

    543

    Non-current liabilities









    Borrowings



    (1,426)

    (1,300)

    (1,157)

    Derivative financial instruments



    (3)

    (3)

    (4)

    Current liabilities









    Borrowings



    (62)

    (313)

    (315)

    Derivative financial instruments



    (11)

    (44)

    (54)

    Net debt



    (1,027)

    (1,177)

    (853)

    Included in borrowings at 30 June 2025 are lease liabilities of £481m (non-current £419m, current £62m). This compares to lease liabilities of £521m (non-current £458m, current £63m) at 30 June 2024 and £517m (non-current £452m, current £65m) at 31 December 2024. The net lease liability at 30 June 2025 after including the investment in finance leases noted above was £407m (2024 half year: £429m, 2024 full year: £434m). Net debt excluding net lease liabilities is £620m (2024 half year: £748m, 2024 full year: £419m).

    In 2025, the movement on borrowings from 31 December 2024 primarily reflects the repayment of the €300m bond offset by the drawdown of £300m on the RCF.

    For the purposes of the cash flow statement, cash and cash equivalents are presented net of overdrafts of £nil (at 30 June 2024: £nil; 31 December 2024: £nil) which are repayable on demand. These overdrafts are excluded from cash and cash equivalents disclosed on the balance sheet.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    11.     Classification of assets and liabilities measured at fair value



    ---Level 1---

    Level 2

    ---Level 3---

    Total fair value

    all figures in £ millions

    FVOCI

    Investments

    FVTPL – Cash and

    cash equivalents

    Derivatives

    FVOCI

    Investments

    FVTPL– Investments

    and Other

















    2025 half year

















    Investments in listed and unlisted securities

    1

    -

    -

    23

    102

    126

    Cash and cash equivalents

    -

    37

    -

    -

    -

    37

    Derivative financial instruments

    -

    -

    54

    -

    -

    54

    Deferred and contingent consideration

    -

    -

    -

    -

    12

    12

    Total financial assets held at fair value

    1

    37

    54

    23

    114

    229















    Derivative financial instruments

    -

    -

    (14)

    -

    -

    (14)

    Deferred and contingent consideration

    -

    -

    -

    -

    (1)

    (1)

    Total financial liabilities held at fair value

    -

    -

    (14)

    -

    (1)

    (15)

















    2024 half year

















    Investments in listed and unlisted securities

    -

    -

    -

    26

    115

    141

    Cash and cash equivalents

    -

    42

    -

    -

    -

    42

    Derivative financial instruments

    -

    -

    59

    -

    -

    59

    Deferred and contingent consideration

    -

    -

    -

    -

    12

    12

    Total financial assets held at fair value

    -

    42

    59

    26

    127

    254















    Derivative financial instruments

    -

    -

    (47)

    -

    -

    (47)

    Deferred and contingent consideration

    -

    -

    -

    -

    (21)

    (21)

    Total financial liabilities held at fair value



    -

    (47)

    -

    (21)

    (68)

















    2024 full year

















    Investments in listed and unlisted securities

    6

    -

    -

    22

    113

    141

    Cash and cash equivalents

    -

    62

    -

    -

    -

    62

    Derivative financial instruments

    -

    -

    51

    -

    -

    51

    Deferred and contingent consideration

    -

    -

    -

    -

    12

    12

    Total financial assets held at fair value

    6

    62

    51

    22

    125

    266















    Derivative financial instruments

    -

    -

    (58)

    -

    -

    (58)

    Deferred and contingent consideration

    -

    -

    -

    -

    (1)

    (1)

    Total financial liabilities held at fair value

    -

    -

    (58)

    -

    (1)

    (59)



















    Level 1 valuations are based on unadjusted quoted prices in active markets for identical financial instruments. Cash and cash equivalents include money market funds which are treated as FVTPL under IFRS 9 with the fair value movements recognised as finance income or cost.

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    11.     Classification of assets and liabilities measured at fair value continued

    The fair values of level 2 assets and liabilities are determined by reference to market data and established estimation techniques such as discounted cash flow and option valuation models. Within level 3 assets, the fair value of our investments in unlisted securities are determined by reference to the financial performance of the underlying asset and amounts realised on the sale of similar assets. Individually these assets are immaterial and therefore no sensitivities have been disclosed.

    Level 3 assets also include the contingent consideration receivable in respect of the sale of the POLS business, which comprises a 27.5% share of positive adjusted EBITDA in each calendar year for 6 years from the disposal date and 27.5% of the proceeds received by the purchaser in relation to any future monetisation event. The valuation of the contingent consideration has been determined on the basis of a discounted cash flow model, and valued by a third-party specialist. The key inputs into the discounted cash flow model are the estimates of adjusted EBITDA for the 6 year period and the estimate of the valuation of the business thereafter. Reasonably possible changes in assumptions for the inputs into the model would not have a material impact on the carrying value of the contingent consideration, and therefore sensitivities have not been disclosed. The contingent consideration payable in respect of prior year acquisitions is measured as the net present value of the expected cashflows.

    The movements in fair values of level 3 financial assets measured at fair value, being principally the investments in unlisted securities and contingent consideration receivable, are shown in the table below. There have been no transfers in classification during 2025. In the second half of 2024, one of the investments held was listed, and therefore the investment of £6m was reclassified out of level 3 and into level 1.











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    At beginning of period



    147

    155

    155

    Exchange differences – OCI



    (9)

    1

    2

    Additions



    5

    9

    9

    Disposals and repayments



    (1)

    -

    -

    Reclassification out of level 3



    -

    -

    (6)

    Fair value movements – Finance costs



    (4)

    (8)

    (11)

    Fair value movements – Other net gain and losses



    2

    -

    -

    Fair value movements – OCI



    (3)

    (4)

    (2)

    At end of period



    137

    153

    147

    The movement in the total fair value of the total deferred and contingent consideration payable measured at fair value or amortised cost is shown in the table below. At 30 June 2025, this comprised £16m of consideration measured at amortised cost and £1m measured at fair value.











    all figures in £ millions



    2025

    2024

    2024





    half year

    half year

    full year











    At beginning of period



    (22)

    (57)

    (57)

    Exchange differences



    1

    (1)

    -

    Acquisitions



    -

    -

    (1)

    Fair value movements – Income Statement



    -

    (1)

    (2)

    Repayments



    4

    38

    38

    At end of period



    (17)

    (21)

    (22)

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    11.     Classification of assets and liabilities measured at fair value continued

    The market value of the Group's bonds is £683m (30 June 2024: £570m; 31 December 2024: £918m) compared to their carrying value of £708m (30 June 2024: £597m; 31 December 2024: £955m). For all other financial assets and liabilities, fair value is not materially different to carrying value.

    12.     Cash flows

    Operating cash flow and free cash flow are non-GAAP measures and have been disclosed as they are part of the Group's corporate and operating measures. These measures are presented in order to align the cash flows with corresponding adjusted profit measures. The table below reconciles the statutory profit and cash flow measures to the corresponding adjusted measures. The table on the next page reconciles operating cash flow to free cash flow to net debt. 

    all figures in £ millions

    Statutory

    measure

    Cost of major

    reorganisation

    Property

    charges

    Other net gains

    and losses

    UK pension

    discretionary

    increases

    Intangible

    charges

    Purchase/disposal of PPE

    and software

    Net addition of right

    of use assets

    Dividends from

    joint ventures

    and associates

    Adjusted

    measure













































                      2025 half year



    Operating

    profit

    240

    -

    (11)

    (7)

    -

    20

    -

    -

    -

    242

    Adjusted

    operating profit



    Net cash generated

    from operations

    188

    -

    -

    9

    -

    -

    (59)

    (12)

    -

    126

    Operating cash

    flow









































                      2024 half year



    Operating profit

    219

    -

    -

    6

    5

    20

    -

    -

    -

    250

    Adjusted

    operating profit



    Net cash generated

    from operations

    185

    5

    -

    3

    -

    -

    (52)

    (12)

    -

    129

    Operating cash

    flow









































                      2024 full year



    Operating profit

    541

    (2)

    -

    7

    13

    41

    -

    -

    -

    600

    Adjusted

    operating profit



    Net cash generated

    from operations

    811

    8

    -

    5

    -

    -

    (118)

    (46)

    2

    662

    Operating cash

    flow































































    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    12.     Cash flows continued











    all figures in £ millions

    note

    2025

    2024

    2024





    half year

    half year

    full year











    Reconciliation of operating cash flow to closing net debt

















    Operating cash flow



    126

    129

    662

    Tax received / (paid)



    35

    (69)

    (119)

    Net finance costs paid



    (5)

    (28)

    (45)

    Cost paid for major reorganisation



    -

    (5)

    (8)

    Free cash flow



    156

    27

    490

    Dividends paid (including to non-controlling interest)



    (110)

    (107)

    (156)

    Net movement of funds from operations



    46

    (80)

    334

    Acquisitions and disposals



    (9)

    (54)

    (58)

    Net equity transactions



    (227)

    (313)

    (351)

    Other movements on financial instruments



    16

    14

    (34)

    Movement in net debt



    (174)

    (433)

    (109)

    Opening net debt



    (853)

    (744)

    (744)

    Closing net debt

    10

    (1,027)

    (1,177)

    (853)

    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

    for the period ended 30 June 2025

    13.     Contingencies, tax uncertainties and other liabilities

    There are Group contingent liabilities that arise in the normal course of business in respect of indemnities, warranties and guarantees in relation to former subsidiaries and in respect of guarantees in relation to subsidiaries, joint ventures and associates. In addition, there are contingent liabilities of the Group in respect of unsettled or disputed tax liabilities, legal claims, contract disputes, royalties, copyright fees, permissions and other rights. None of these claims are expected to result in a material gain or loss to the Group.

    The Group is under assessment from the tax authorities in Brazil challenging the deduction for tax purposes of goodwill amortisation for the years 2012 to 2020. Similar assessments may be raised for other years. Potential total exposure (including possible interest and penalties) could be up to BRL 1,372m (£183m) for periods up to 30 June 2025, with additional potential exposure of BRL 46m (£6m) in relation to deductions expected to be taken in future periods. Such assessments are common in Brazil. The Group believes that the likelihood that the tax authorities will ultimately prevail is low and that the Group's position is strong. At present, the Group believes no provision is required.

    14.     Related parties

    Related party transactions in the six months ended 30 June 2025 were substantially the same in nature to those disclosed in note 36 of the Annual Report and Accounts for the year ended 31 December 2024. All related party transactions are on an arm's length basis. There were no other material related party transactions in the period that have materially affected the financial position or performance of the Group and no guarantees have been provided to related parties in the year.

    15.     Events after the balance sheet date

    On 24 July 2025, the Group completed the acquisition of 100% of eDynamic Holdings LP ('eDynamic Learning'), a leading Career and Technical Education (CTE) curriculum solutions provider, having obtained all necessary approvals. This acquisition is aligned to Pearson's strategy, enabling Pearson to scale its position in the fast-growing Early Careers space and broaden capabilities in career-readiness solutions. The total consideration paid is £167m ($225m), plus net working capital adjustments. The net assets acquired will mainly comprise goodwill and intangible assets, expected principally to be customer contracts and content and technology recognised on acquisition. Since the acquisition closed subsequent to the half year date, it has not been reflected in the interim financial statements. Given the proximity of the acquisition to the publication of the half year results, the full valuation exercise has not been completed, and therefore, the financial impact on the Group's balance sheet has not been disclosed, but a provisional purchase price allocation will be included in the financial statements for the year ending 31 December 2025.

    STATEMENT OF DIRECTORS' RESPONSIBILITIES

    The directors confirm that these condensed consolidated financial statements have been prepared in accordance with UK-adopted International Accounting Standard 34 'Interim Financial Reporting' and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8 namely:

    • An indication of important events that have occurred during the first six months and their impact on the condensed consolidated financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and
    • Material related party transactions in the first six months and any material changes in related party transactions described in the 2024 Annual Report.

    The directors of Pearson plc are listed in the 2024 Annual Report. There have been the following changes to the Board since the publication of the Annual Report.

    Arden Hoffman – appointed 1 June 2025

    A list of current directors is maintained on the Pearson plc website: www.pearsonplc.com. 

    By order of the Board

    Omar Abbosh

    Chief Executive

    31 July 2025

    Sally Johnson

    Chief Financial Officer

    31 July 2025

    INDEPENDENT REVIEW REPORT TO PEARSON PLC

    Independent Review Report on the condensed consolidated interim financial statements

    Conclusion

    We have been engaged by Pearson plc (the Company) to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated balance sheet, the condensed consolidated statement of changes in equity, the condensed consolidate cash flow statement and the explanatory notes. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements. 

    Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2025 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

    Basis for Conclusion

    We conducted our review in accordance with International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" (ISRE) issued by the Financial Reporting Council. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

    As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting".

    Conclusions Relating to Going Concern

    Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that management have inappropriately adopted the going concern basis of accounting or that management have identified material uncertainties relating to going concern that are not appropriately disclosed.

    This conclusion is based on the review procedures performed in accordance with this ISRE, however future events or conditions may cause the entity to cease to continue as a going concern.

    Responsibilities of the directors

    The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

    In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

    Auditor's Responsibilities for the review of the financial information

    In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

    Use of our report

    This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.

    Ernst & Young LLP

    London

    31 July 2025

     

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/pearson-interim-results-for-the-six-months-to-30th-june-2025-unaudited-302519220.html

    SOURCE Pearson

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