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3 Discontinued operations
On 11 December 2006, Pearson announced that it had agreed to sell Pearson Government Solutions to Veritas Capital, a private equity firm. This operation is disclosed as discontinued and the assets and liabilities of Pearson Government Solutions have been reclassified to non-current assets held for sale (see notes 29 and 35).
Discontinued operations in 2005 also relate to the sale of Pearson's 79% interest in Recoletos Grupo de Communicación S.A..
An analysis of the results and cash flows of discontinued operations are as follows:
| All figures in £ millions | 2006 Pearson Government Solutions |
2005 Pearson Government Solutions |
2005 Recoletos |
2005 Total |
|---|---|---|---|---|
| Sales | 286 | 288 | 27 | 315 |
| Operating profit/(loss) | 22 | 20 | (3) | 17 |
| Net finance income | – | – | – | – |
| Profit/(loss) before tax | 22 | 20 | (3) | 17 |
| Attributable tax (expense)/benefit | (8) | (8) | 1 | (7) |
| Profit/(loss) after tax | 14 | 12 | (2) | 10 |
| Profit on disposal of discontinued operations before tax | – | – | 306 | 306 |
| Attributable tax expense | – | – | (2) | (2) |
| Profit for the year from discontinued operations | 14 | 12 | 302 | 314 |
| Operating cash flows | 20 | 22 | (6) | 16 |
| Investing cash flows | (8) | (13) | – | (13) |
| Financing cash flows | (1) | (1) | – | (1) |
| Total cash flows | 11 | 8 | (6) | 2 |