Good H1 performance and reiterating 2026 guidance. Uniquely positioned to benefit from accelerating demand for reskilling in an AI-driven world.
LONDON, July 31, 2026 /PRNewswire/ --
Financial Highlights
H1 vs H1 H1 H1
GBPm 2026 2025 GBPm 2026 2025
Business performance Statutory results
Revenue 1,779 +4% (1) Revenue 1,779 1,722
Adjusted operating
profit 276 +14% (1) Operating profit 252 240
Profit for the
Operating cash flow 337 +167% (2) period 149 166
Net cash generated
Free cash flow 259 +66% (2) from operations 427 188
Adjusted earnings per 28.9p +18%(2) Basic earnings per 24.0p 24.8p
share share
Highlights
-- Underlying Group revenue growth of 4%, in line with expectations,
supported by continued strong performance in Virtual Learning and
Assessment & Qualifications returning to growth in Q2.
-- Group adjusted operating profit of GBP276m, up 14% underlying with 140bps
margin expansion to 15.5%, driven by trading performance, the impact of
the 2025 product development impairment3 and investment phasing.
-- Strong free cash performance up GBP103m to GBP259m.
-- Adjusted earnings per share increased 19% at constant exchange rates4 and
18% on a headline basis.
-- Interim dividend up 5% and GBP350m share buyback completed, with
continued balance sheet strength.
-- Reiterating 2026 guidance: mid-single digit underlying revenue growth,
adjusted operating profit of GBP640m-GBP685m at FX rates as at the end of
2025 (GBP:$ 1.35), and free cash flow conversion5 of 90%-100%.
-- Continued momentum in Enterprise, including a new agreement with a
leading AI lab to deliver their global certification programme, and
strategic account growth with a new partnership with Adobe.
Omar Abbosh, Pearson's Chief Executive, said:
"We have delivered a good first-half performance and executed well against our strategy, with a focus on driving operational improvements while innovating to build learning and assessment experiences that help our customers progress in their lives. We are reiterating our full year guidance and remain confident in Pearson's long-term growth opportunities. We are excited about the future and believe Pearson is uniquely placed to meet the growing customer demand for reskilling in an AI driven world."
Underlying Group revenue growth of 4% in H1 2026
-- Assessment & Qualifications returned to growth in Q2 as expected, with H1
revenue up 2%, driven by a strong performance in Clinical Assessment and
growth in Pearson Professional Assessments and UK & International
Qualifications, partially offset by a decline in US Student Assessment
impacted by the previously disclosed loss of the New Jersey contract.
-- Virtual Learning revenue grew 19%, reflecting strong enrolment momentum
in the 2025/2026 academic year, with enrolment growth accelerating to 15%
in the Spring semester, alongside funding growth and favourable mix.
-- Higher Education revenue grew 2%, driven by a solid performance in core
US Courseware and a return to growth in K12. This was partially offset by
a decline in International Higher Education due to challenging trading
conditions in mature markets. Inclusive Access growth increased to 20%
and now represents 50% of the core US Courseware business.
-- English Language Learning revenue declined 3%, with growth in
Institutional more than offset by Pearson Test of English $(PTE)$, where
market conditions have become more difficult. Despite these conditions,
we outperformed the market and remain confident in the long-term
attractiveness of the business, although we expect market headwinds to
persist in the near term.
-- Enterprise Learning & Skills revenue grew 7%, with another solid
performance in Vocational Qualifications and strong growth in Enterprise
Solutions driven by the monetisation of our strategic partnerships.
Group adjusted operating profit up 14% on an underlying basis to GBP276m
-- Underlying performance up 14% driven by operating leverage and continued
cost efficiencies, partially offset by investment and inflation. This
result was impacted by the 2025 product development impairment, alongside
investment phasing.
-- On a headline basis, profit also increased 14%, reflecting underlying
performance, with the contribution from the acquisition of eDynamic
Learning offset by adverse currency movements. First half adjusted profit
margin increased 140bps to 15.5% (H1 2025: 14.1%).
-- Adjusted net finance costs increased to GBP35m (H1 2025: GBP24m). The
effective tax rate on adjusted profit before tax increased to 25.8% (H1
2025: 24.5%) due to a one-off tax charge arising on the settlement of a
US insurance policy in the period ended 30 June 2026. As this was a
non-recurring item, we expect the full-year effective tax rate to
normalise.
-- Adjusted earnings per share increased 18% to 28.9p (H1 2025: 24.5p)
reflecting adjusted operating profit growth and the reduction in issued
shares due to the share buyback programme, partially offset by increased
interest costs and higher tax charge. Adjusted earnings per share
increased 19% at constant exchange rates.
Strong cash performance
-- Operating cash flow increased GBP211m to GBP337m (H1 2025: GBP126m),
driven by movements in working capital, including payment timing benefits
expected to reverse in H2, and the one-off proceeds from the settlement
of a US insurance policy.
-- Free cash flow remained strong, increasing by GBP103m to GBP259m (H1
2025: GBP156m), driven by the strong operating cash performance. This was
partially offset by the normalisation of cash interest and tax payments
following the one off state aid refund received in the prior period.
Strong balance sheet supporting continued investment and shareholder returns
-- Net debt increased GBP0.3bn to GBP1.3bn at 30th June 2026 (H1 2025:
GBP1.0bn) as strong free cash flow generation was more than offset by
share buybacks, acquisition spend and dividends.
-- Proposed interim dividend of 8.2p (H1 2025: 7.8p), represents an increase
of 5%.
-- During the first half of 2026, we repurchased GBP350m of shares at an
average purchase price of 998p.
-- We successfully issued a GBP350m 10-year bond under our Euro Medium Term
Note (EMTN) programme.
Statutory results
-- Revenue increased 3% on a headline basis to GBP1,779m (H1 2025:
GBP1,722m) with positive underlying business performance partially offset
by currency movements.
-- Statutory operating profit increased 5% on a headline basis to GBP252m
(H1 2025: GBP240m) driven by underlying operating profit growth partially
offset by movements in property charges and other net gains and losses.
-- Net cash generated from operations of GBP427m (H1 2025: GBP188m).
-- Statutory earnings per share of 24.0p (H1 2025: 24.8p).
Outlook
Reiterating 2026 guidance
-- For 2026, we expect to deliver mid-single digit underlying revenue growth,
adjusted operating profit of GBP640m-GBP685m at FX rates as at the end of
2025 (GBP:$ 1.35), including the impact of the 2025 product development
impairment, and free cash flow conversion of 90%-100%.
Medium term outlook
-- Over the medium term, Pearson continues to be positioned to deliver a
mid-single digit underlying revenue growth CAGR, sustained margin
improvement that will equate to an average increase of 40 basis points
per annum and strong free cash conversion, in the region of 90% to 100%,
on average, across the period.
Financial Calendar
-- 2026 Nine Month Trading Update will be announced on 22 October 2026.
Contacts
Investor Relations Alex Shore +44 (0) 7720 947 853 +44
Steph Crinnegan (0) 7780 555 351 +44 (0)
Eliza Hardwick 7909 532 801 +1 (332)
Brennan Matthews 238-8785
ir@pearson.com https://plc.pearson.com/en-
GB/investors
Media Latika Shah +44 (0) 7950 671 948
Edelman Smithfield Laura Ewart +44 (0) 7798 846 805
Pearson
------------------- ---------------------------- ---------------------------
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
Headline Underlying
GBPm H1 2026 H1 2025 Growth(2) growth(1)
Revenue
Assessment & Qualifications 803 802 0 % 2 %
Virtual Learning 280 242 16 % 19 %
Higher Education 350 337 4 % 2 %
English Language Learning 166 171 (3) % (3) %
Enterprise Learning & Skills 180 170 6 % 7 %
Total 1,779 1,722 3 % 4 %
Adjusted operating profit/(loss)
Assessment & Qualifications 157 170 (8) % (6) %
Virtual Learning 49 39 26 % 31 %
Higher Education 21 (3) nm nm
English Language Learning (2) (7) nm nm
Enterprise Learning & Skills 51 43 19 % 18 %
Total 276 242 14 % 14 %
(1) Throughout 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. c) "nm" means not meaningful.
(2) Headline growth rates include currency movements, and portfolio changes.
"nm" means not meaningful.
(3) The 2025 product development impairment relates to a GBP87m non-cash,
one-off impairment of legacy product development assets arising from a
strategic platform convergence. This convergence is expected to deliver
ongoing operational improvements and results in a c.GBP15m per annum adjusted
operating profit improvement, on average, over the next 6 years in Higher
Education.
(4) Calculated using adjusted operating profit at constant exchange rates.
Constant exchange rates are calculated by assuming the average FX in the prior
year prevailed through the current year.
(5) Free cash flow conversion calculated as free cash flow divided by adjusted
earnings.
Assessment & Qualifications
In Assessment & Qualifications, revenue increased 2% on an underlying basis and was flat on a headline basis due to currency movements offsetting trading. Adjusted operating profit declined 6% on an underlying basis, as trading performance was more than offset by sales mix and one-time delivery costs. On a headline basis profit decreased 8%, reflecting the underlying performance and adverse currency movements.
Pearson Professional Assessments revenue increased 3% on an underlying basis, driven by continued momentum from new contracts launched last year, partially offset by headwinds in PDRI. Enterprise growth was strong, with Google Cloud certifications launching in the period. We also secured new contracts with customers, including with a leading AI lab, while customer retention remained high, supporting future growth.
US Student Assessment revenue decreased 6%, driven by the previously disclosed loss of the New Jersey contract, partially offset by the biennial NAEP testing cycle and delivery phasing benefits that are expected to reverse in H2. During the period we secured a new statewide assessment contract in Wyoming.
Clinical Assessment revenue increased 8% in underlying terms due to the continued traction of our products, including in international markets, pricing and digital product growth. We entered into an exclusive agreement with Giunti Psychometrics to expand the reach of our Spanish-language clinical assessments and tools across Latin America.
UK & International Qualifications revenue increased 6% in underlying terms driven by new contracts, volume and pricing, with international expansion remaining a key strategic priority.
Virtual Learning
Virtual Learning revenue increased 19% on an underlying basis, driven by strong enrolment growth, funding and favourable mix. On a headline basis revenue was up 16% with currency movements partially offsetting trading. Adjusted operating profit increased 31% on an underlying basis, driven by operating leverage on strong revenue growth. On a headline basis, profit increased 26%, reflecting trading performance partially offset by currency movements.
Enrolment growth for the 2025/26 academic year accelerated to 15% in the Spring semester, reflecting strength of demand for virtual schooling, targeted marketing investment and strong execution. We were successful in all 10 long term contract renewals and are on track to open 5 new schools for the 2026/27 academic year, which will take our network to 46 schools in 32 states. We continue to develop our career offerings and have expanded our relationship with The Home Depot's Path to Pro programme to connect more students with careers in skilled trades.
Higher Education
Higher Education revenue increased 2% on an underlying basis driven by a solid performance in core US Courseware and a return to growth in K12, partially offset by a decline in International Higher Education due to challenging trading conditions in mature markets. On a headline basis revenue was up 4% reflecting the underlying performance and the eDynamic Learning acquisition partially offset by currency movements. Adjusted operating profit increased on an underlying basis, driven by operational leverage, continued cost efficiencies and lower amortisation following the 2025 product development impairment. On a headline basis, profit also benefited from the acquisition of eDynamic Learning, partially offset by currency movements.
Our AI-powered study tools continue to deliver measurable improvements in learning outcomes, with recent research demonstrating that they drive a 90% improvement in initial mastery compared with legacy education tools. Inclusive Access remains a key strategic priority, with growth increasing to 20% and now accounting for 50% of our US core Courseware business. Integration of the prior year acquisition of eDynamic Learning is progressing well, with sales teams and capabilities across our wider Early Career portfolio brought together to create a more integrated education-to-employment ecosystem.
English Language Learning
In English Language Learning, revenue declined 3% on an underlying basis, with growth in Institutional more than offset by PTE. On a headline basis, revenue also declined 3% with currency movements offsetting portfolio changes. Adjusted operating profit increased on an underlying basis, with cost efficiencies more than offsetting trading performance. On a headline basis, profit also benefited from favourable currency movements.
Within Institutional, we continue to expand our footprint with customer wins in Latin America, Asia and Europe. PTE revenue declined, with volumes down 3%, as market conditions became more difficult driven by tight migration policies and geopolitical disruption. Despite these conditions, we outperformed the market and remain confident in the long-term attractiveness of the business, although we expect market headwinds to persist in the near term.
Enterprise Learning & Skills
In Enterprise Learning & Skills, revenue increased 7% on an underlying basis and 6% on a headline basis. Adjusted operating profit increased by 18% in underlying terms due to operating leverage on revenue growth partially offset by investment. On a headline basis, profit increased 19%, reflecting underlying trading performance and currency movements.
Vocational Qualifications delivered another solid performance, supported by new contract launches, including the vocational skilling programme for construction in Saudi Arabia. We continued to secure new business and renew existing contracts, extending our partnership with the Jordanian Ministry of Education and securing four new T Level contracts in the UK, including Engineering and Manufacturing.
Enterprise Solutions continued to be a key driver of growth, through powering enterprise AI upskilling at scale, and delivering a suite of AI learning programs to our strategic partners. We secured a new strategic partnership with Salesforce, focused on accelerating AI readiness and skills development across its global workforce, while also adding Adobe, taking our strategic partner ecosystem to 10. We continue to embed AI across our products and services, with the AI-powered Math Tutor in the GED & Me mobile app driving improved learner outcomes.
2026 guidance summary
Underlying Group Mid-single digit growth.
Revenue
growth
--------------------- -------------------------------------------
Assessment & Low to mid-single digit growth, driven by
Qualifications new contracts, products and pricing.
--------------------- -------------------------------------------
Virtual Learning Stronger growth than 2025 driven by a full
year of enrolment growth.
--------------------- -------------------------------------------
Higher Education Will grow more than 2025, supported by
continued product and platform innovation,
pricing and Inclusive Access in our core US
courseware business, with improvement in
the K12 channel.
--------------------- -------------------------------------------
English Language Institutional is expected to grow, driven
Learning by market share gains and pricing. PTE is
expected to decline given the challenging
market backdrop. We expect the business
unit to return to growth in Q4.
--------------------- -------------------------------------------
Enterprise Learning & Growth to be driven by a solid performance
Skills in Vocational Qualifications and strategic
account growth in Enterprise Solutions.
--------------------- -------------------------------------------
Group Adjusted Operating GBP640m-GBP685m at FX rates as at the end
Profit Profit of 2025 (GBP:$ 1.35), which includes lower
amortisation in 2026 following the 2025
product development impairment.
--------------------- -------------------------------------------
Interest Adjusted net finance costs of c.GBP80m.
--------------------- -------------------------------------------
Tax rate We expect the effective tax rate on
adjusted profit before tax to be c.25%.
--------------------- -------------------------------------------
Cash flow We expect a free cash flow conversion of
90-100%.
-------------------------------------------
FX Every 1c movement in GBP:$ rate equates to
approximately GBP5m adjusted operating
profit impact.
--------------------------------- -------------------------------------------
Exchange rates H1 2026 H1 2025 FY 2025
GBP:$
Average rate 1.34 1.31 1.32
Period end rate 1.32 1.37 1.35
Financial Review
Operating result
Revenue for the six months to 30 June 2026 increased on a headline basis by GBP57m or 3% to GBP1,779m for the six months to 30 June 2026 compared to GBP1,722m for the same period in 2025 and adjusted operating profit increased by 14% on a headline basis to GBP276m in the first half of 2026 compared to GBP242m in the first half of 2025 (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 2026 with those for the equivalent period in the prior year. We also present revenue 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 revenue and profits made by businesses disposed in 2025 or 2026 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 disposals of Copp Clark in 2025 and Yazigi in 2026, and the acquisition of eDynamic Learning in 2025.
On an underlying basis, revenue increased by 4% in the first six months of 2026 compared to the equivalent period in 2025 and adjusted operating profit increased by 14%. Currency movements decreased revenue by GBP28m and adjusted operating profit by GBP4m, and portfolio changes increased revenue by GBP13m and adjusted operating profit by GBP4m. There were no new accounting standards adopted in the first half of 2026 that impacted revenue 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, one off-costs related to the UK pension scheme, when relevant, and certain other one-off material items. A summary of these adjustments is included below and in note 2 to the condensed consolidated financial statements.
all figures in GBP millions 2026 2025 2025
half year half year full year
----------------------------------------- --------- --------- ---------
Operating profit 252 240 507
Add back: Product development impairment - - 87
Add back: Intangible charges 22 20 42
Add back: Other net gains and losses 2 (7) 3
Add back: Property charges - (11) (25)
------------------------------------------ --------- --------- ---------
Adjusted operating profit 276 242 614
Product development impairment charges in the second half of 2025 relate to the impairment of product development assets as a result of courseware platform convergence. There were no such amounts in the first half of 2025 or 2026.
Intangible amortisation charges to the end of June 2026 were GBP22m compared to a charge of GBP20m in the equivalent period in 2025.
Other net gains and losses in 2026 relate to a loss on the disposal of a business in our English Language Learning division and costs relating to a prior year acquisition. 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.
There were no property charges in 2026. In 2025, there was a gain of GBP11m in the period to 30 June 2025 and GBP25m for the year ended 31 December 2025, relating to reversals of impairments of property assets that were previously impaired through property charges. The impairment reversals arose primarily from new sublets on previously vacant space in corporate properties.
The reported operating profit of GBP252m in the first half of 2026 compares to a profit of GBP240m in the first half of 2025. The increase has been driven by operating leverage on revenue growth, continued cost efficiencies, the impact of the 2025 product development impairment and contributions from the acquisition of eDynamic Learning, partially offset by investment, inflation and unfavourable foreign exchange movements, as well as a reduction in one-off gains recorded in H1 2025 related to the disposals of subsidiaries and property related impairment reversals.
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 GBP22m in the first half of 2025 to a net cost of GBP47m in the same period in 2026. The increase is primarily due to fair value losses on investments held at fair value through profit and loss (FVTPL) and an increase in average net debt.
Adjusted net finance costs reflected in adjusted earnings to 30 June 2026 was GBP35m, compared to a net cost of GBP24m in the first half of 2025. The increase is primarily due to an increase in average net debt.
In the period to 30 June 2026, the total of items excluded from adjusted earnings was a net expense of GBP12m compared to net income of GBP2m in the first half of 2025. 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 2026 was a charge of GBP56m compared to a charge of GBP52m in the period to 30 June 2025. This equates to an effective tax rate of 27.3% (2025: 23.9%), with the increase from prior year principally being due to a discrete tax charge arising on a settlement of a US insurance policy in the period ended 30 June 2026, together with the non recurrence of the prior year non-taxable impairment reversal.
The total adjusted tax charge for the period was GBP62m (2025: GBP54m), corresponding to an effective tax rate on adjusted profit before tax of 25.8% (2025: 24.5%). The full year effective tax rate on adjusted profit before tax is expected to be approximately 25%, with the interim tax rate increased due to the tax effect of the discrete item noted above, which has been recognised in full in the period to 30 June 2026. For a reconciliation of the adjusted measure see note 4 to the condensed consolidated financial statements.
In the first half of 2026, there was a net tax payment of GBP50m (2025: GBP35m net tax receipt). The prior year net receipt included a GBP97m repayment from HMRC in respect of the State Aid matter, with an additional GBP17m of associated interest also received in the period, with the balance principally related 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 gain on translation of GBP47m at 30 June 2026 compares to a loss at 30 June 2025 of GBP263m. The gain in 2026 arises from an overall strengthening 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 2026 was GBP1:$1.32 compared to the opening rate of GBP1:$1.35. At the end of June 2025, the US dollar rate was GBP1:$1.37 compared to the opening rate of GBP1:$1.25.
Also included in other comprehensive income at 30 June 2026 is an actuarial loss of GBP9m in relation to retirement benefit obligations. The loss arises largely from losses on assets and an increase in assumed life expectancies, partially offset by a decrease in liabilities driven by a higher discount rate. The loss in 2026 compares to an actuarial loss at 30 June 2025 of GBP12m.
Fair value losses of GBP1m (2025: losses of GBP6m) have been recognised in other comprehensive income relating to movements in the value of investments in listed and 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 increased on a headline basis by GBP211m from an inflow of GBP126m in the first half of 2025 to an inflow of GBP337m in the first half of 2026. The increase is largely explained by movements in working capital including payment timing effects and proceeds from the one-off settlement of a US insurance policy, partially offset by increased investment.
The equivalent statutory measure, net cash generated from operations, was an inflow of GBP427m in 2026 compared to an inflow of GBP188m in 2025. Compared to operating cash flow, this measure includes, when relevant, 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).
Free cash flow increased on a headline basis by GBP103m from GBP156m in 2025 to GBP259m in 2026. When compared to operating cash flow, free cash flow includes tax paid/received, net finance costs paid and, when relevant, net costs paid for major reorganisation and special pension contributions. The increase year on year is mainly due to strong operating cash flow partially offset by an increase in tax and interest payments as a result of the one-off receipt of monies in 2025 related to the State Aid tax matter.
In the first half of 2026, there was an overall decrease of GBP1m in cash and cash equivalents (including overdrafts) from GBP333m at the end of 2025 to GBP332m at 30 June 2026. The decrease in 2026 is primarily due to net cash generated from operations of GBP427m and net inflows from borrowings of GBP282m, being more than offset by dividends paid of GBP108m, share buyback programme payments of GBP352m, own share purchases of GBP56m, net tax payments of GBP50m, net interest payments of GBP28m, capital expenditure on property, plant, equipment and software of GBP82m, and payments of lease liabilities of GBP38m.
Liquidity and capital resources
The Group's net debt increased from GBP1,069m at the end of 2025 to GBP1,343m at the end of June 2026. The increase is largely due to free cash flow of GBP259m which is more than offset by the GBP350m share buyback programme which completed in May 2026, other own share purchases and dividend payments. In April 2026, the Group issued a GBP350m bond, adding additional liquidity to the Group.
At 30 June 2026, the Group had approximately GBP1.3bn in total liquidity immediately available from cash and its RCFs maturing February 2029 and June 2029. In assessing the Group's ability to continue as a going concern for the period until 31 December 2027, 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 2026, as well as reverse stress testing to identify what conditions 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 2027. 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. 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 GBP21m in the period to 30 June 2026 (30 June 2025: GBP21m) of which a charge of GBP35m (30 June 2025: GBP33m) was reported in operating profit and income of GBP14m (30 June 2025: GBP12m) was reported against other net finance costs.
The overall surplus on UK Group pension plans of GBP514m at the end of 2025 has decreased to a surplus of GBP506m at the end of June 2026. The decrease has arisen principally due to asset returns being lower than expected, an increase in assumed life expectancies 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 decreased from a net asset of GBP482m at the end of 2025 to a net asset of GBP475m at the end of June 2026.
Businesses acquired and disposed
The Group made no acquisitions of subsidiaries in the first half of 2026 or 2025. The cash outflow in the first half of 2026 relating to acquisition of subsidiaries was GBP4m (2025: GBP4m) arising from the payment of deferred consideration in respect of prior year acquisitions. In addition, there was a cash outflow relating to investments of GBP1m (2025: GBP5m).
In the second half of 2025, the Group completed the acquisition of 100% of eDynamic Holdings LP ('eDynamic Learning'), a leading Career and Technical Education (CTE) curriculum solutions provider for cash consideration of GBP168m.
The Group disposed of Yazigi, a small business in our English Language Learning division, for GBP3m in the first half of 2026, resulting in a loss on disposal of GBP1m. The Group disposed of Copp Clark in the first half of 2025 for consideration of GBP9m, resulting in a gain on disposal of GBP8m. The gains and losses have been recorded within other net gains and losses. In 2026, the cash inflow relating to the disposal of businesses was GBP2m (2025: inflow of GBP9m).
Dividends
The dividend accounted for in the six months to 30 June 2026 is the final dividend in respect of 2025 of 17.4p. An interim dividend for 2026 of 8.2p was declared by the Board in July 2026 and will be accounted for in the second half of 2026. The interim dividend will be paid on 14 September 2026 to shareholders who are on the register of members at close of business on 14 August 2026 (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 21 August 2026. 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 21 January 2026 a GBP350m share buyback programme was announced in order to return capital to shareholders. In the first half of 2026, the programme has completed with c35m shares bought back at a cash cost of GBP352m. The nominal value of the cancelled shares of GBP9m has been transferred to the capital redemption reserve.
Post balance sheet events
On 20 July 2026, the US District Court granted final approval of the settlement of the class action of Bartz et al vs. Anthropic in which the court had ruled that Anthropic faced liability for downloading and maintaining pirated books for its general purpose library for AI training. Pearson is a claimant in the settlement and expects to be eligible for monetary distribution for qualifying titles, subject to further court proceedings and claims administration. The Group has not recorded anything in the interim financial statements in relation to the matter as the amount and timing of any settlement are not yet certain.
Principal risks and uncertainties
In the 2025 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 risk, customer expectations risk, portfolio change, and reputation and responsibility. We also noted in our 2025 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 2025 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. Regulatory 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 AI, and that our content and method of delivery (channel) is, or is perceived to be, insufficiently differentiated in terms of outcomes or learner experience. This could lead to lost sales and a significant decline in our market value.
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 Risk
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. Risks arise not only from our actions, but also from being perceived as misaligned with societal expectations or ideological divides, especially in a polarised environment.
CONDENSED CONSOLIDATED INCOME STATEMENT
for the period ended 30 June 2026
all figures in GBP millions note 2026 2025 2025
half year half year full year
--------------------------------------- ---- --------- --------- ---------
Continuing operations
Revenue 2 1,779 1,722 3,577
Cost of goods sold (869) (843) (1,717)
--------------------------------------- ---- --------- --------- ---------
Gross profit 910 879 1,860
Operating expenses (657) (645) (1,351)
Other net gains and losses 2 (2) 7 (3)
Share of results of joint ventures and
associates 1 (1) 1
--------------------------------------- ---- --------- --------- ---------
Operating profit 2 252 240 507
Finance costs 3 (74) (47) (98)
Finance income 3 27 25 48
--------------------------------------- ---- --------- --------- ---------
Profit before tax 205 218 457
Income tax 4 (56) (52) (121)
--------------------------------------- ---- --------- --------- ---------
Profit for the period 149 166 336
--------------------------------------- ---- --------- --------- ---------
Attributable to:
Equity holders of the company 148 164 335
Non-controlling interest 1 2 1
--------------------------------------- ---- --------- --------- ---------
Earnings per share from continuing
operations (in pence per share)
Basic 5 24.0p 24.8p 51.4p
Diluted 5 23.8p 24.5p 50.7p
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 2026
all figures in GBP millions 2026 2025 2025
half year half year full year
Profit for the period 149 166 336
Items that may be reclassified to the
income statement
Net exchange differences on translation of
foreign operations 47 (263) (193)
Attributable tax (1) (1) -
Items that are not reclassified to the
income statement
Fair value loss on other financial assets (1) (6) (7)
Attributable tax - - -
Remeasurement of retirement benefit
obligations (9) (12) 10
Attributable tax 2 3 (3)
------------------------------------------- --------- --------- ---------
Other comprehensive income / (expense) 38 (279) (193)
------------------------------------------- --------- --------- ---------
Total comprehensive income / (expense) 187 (113) 143
------------------------------------------- --------- --------- ---------
Attributable to:
Equity holders of the company 186 (114) 143
Non-controlling interest 1 1 -
------------------------------------------- --------- --------- ---------
CONDENSED CONSOLIDATED BALANCE SHEET
as at 30 June 2026
all figures in GBP millions note 2026 2025 2025
half year half year full year
--------------------------------------- ---- --------- --------- ---------
Property, plant and equipment 221 203 210
Investment property 86 74 91
Intangible assets 9 3,019 2,809 3,009
Investments in joint ventures and
associates 8 11 8
Deferred income tax assets 33 48 58
Financial assets -- derivative
financial instruments 18 16 14
Retirement benefit assets 510 488 518
Other financial assets 102 126 125
Trade and other receivables 97 108 105
--------------------------------------- ---- --------- --------- ---------
Non-current assets 4,094 3,883 4,138
Intangible assets -- product
development 9 836 873 822
Inventories 72 71 66
Trade and other receivables 1,016 999 1,082
Financial assets -- derivative
financial instruments 4 38 2
Current income tax assets 12 14 15
Cash and cash equivalents (excluding
overdrafts) 10 339 347 333
--------------------------------------- ---- --------- --------- ---------
Current assets 2,279 2,342 2,320
Assets classified as held for sale - - - --------------------------------------- ---- --------- --------- --------- Total assets 6,373 6,225 6,458 Financial liabilities -- borrowings 10 (1,687) (1,426) (1,419) Financial liabilities -- derivative financial instruments (3) (3) (2) Deferred income tax liabilities (79) (68) (89) Retirement benefit obligations (35) (35) (36) Provisions for other liabilities and charges (12) (11) (12) Other liabilities (59) (64) (76) --------------------------------------- ---- --------- --------- --------- Non-current liabilities (1,875) (1,607) (1,634) Trade and other liabilities (1,027) (902) (1,043) Financial liabilities -- borrowings 10 (70) (62) (62) Financial liabilities -- derivative financial instruments (1) (11) (1) Current income tax liabilities (33) (13) (47) Provisions for other liabilities and charges (8) (25) (8) --------------------------------------- ---- --------- --------- --------- Current liabilities (1,139) (1,013) (1,161) Liabilities classified as held for sale - - - --------------------------------------- ---- --------- --------- --------- Total liabilities (3,014) (2,620) (2,795) --------------------------------------- ---- --------- --------- --------- Net assets 3,359 3,605 3,663 Share capital 149 163 158 Share premium 2,661 2,652 2,658 Treasury shares (29) (22) (9) Reserves 562 796 841 --------------------------------------- ---- --------- --------- --------- Total equity attributable to equity holders of the company 3,343 3,589 3,648 Non-controlling interest 16 16 15 --------------------------------------- ---- --------- --------- --------- Total equity 3,359 3,605 3,663
The condensed consolidated financial statements were approved by the Board on 30 July 2026.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the period ended 30 June 2026
Equity attributable to equity holders of the company
-------------------------------------------------------------------------------------
Capital Fair Non-
all figures in Share Share Treasury redemption value Translation Retained controlling Total
GBP millions capital premium shares reserve reserve reserve earnings Total interest equity
2026 half year
----------------------------------------------------------------------------------------------------------------------------
At 1 January
2026 158 2,658 (9) 49 (21) 184 629 3,648 15 3,663
---------------- -------- -------- --------- ----------- -------- ------------ --------- ------ ----------- ------
Profit for the
period - - - - - - 148 148 1 149
Other
comprehensive
income /
(expense) - - - - (1) 47 (8) 38 - 38
---------------- -------- -------- --------- ----------- -------- ------------ --------- ------ ----------- ------
Total
comprehensive
income /
(expense) - - - - (1) 47 140 186 1 187
Equity-settled
transactions(1) - - - - - - 15 15 - 15
Issue of
ordinary
shares - 3 - - - - - 3 - 3
Buyback of
equity (9) - - 9 - - (352) (352) - (352)
Purchase of
treasury
shares - - (49) - - - - (49) - (49)
Release of
treasury
shares - - 29 - - - (29) - - -
Dividends - - - - - - (108) (108) - (108)
---------------- -------- -------- --------- ----------- -------- ------------ --------- ------ ----------- ------
At 30 June 2026 149 2,661 (29) 58 (22) 231 295 3,343 16 3,359
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
transactions(1) - - - - - - 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 2026
Equity attributable to equity holders of the company
-------------------------------------------------------------------------------------
Capital Fair Non-
all figures in Share Share Treasury redemption value Translation Retained controlling Total
GBP millions capital premium shares reserve reserve reserve earnings Total interest equity
2025 full year
-----------------------------------------------------------------------------------------------------------------------------
At 1 January
2025 166 2,649 (7) 41 (14) 376 827 4,038 15 4,053
---------------- -------- -------- --------- ----------- -------- ------------ --------- ------ ----------- -------
Profit for the
period - - - - - - 335 335 1 336
Other
comprehensive
income /
(expense) - - - - (7) (192) 7 (192) (1) (193)
---------------- -------- -------- --------- ----------- -------- ------------ --------- ------ ----------- -------
Total
comprehensive
income /
(expense) - - - - (7) (192) 342 143 - 143
Equity-settled
transactions(1) - - - - - - 29 29 - 29
Tax on
equity-settled
transactions - - - - - - (1) (1) - (1)
Issue of
ordinary
Comments