Pearson IFRS briefing

Pearson provided details of the effect of IFRS on our reported results for 2003 and 2004.

View the press announcement

Download a PDF of the detailed technical analysis (160kb)

Download a PDF of the technical analysis for the half year

Audiocast

Audiocast of the briefing event held by Rona Fairhead, CFO and Robin Freestone, deputy CFO

Download the presentation that accompanies the briefing (PDF 590kb)

Press announcement

Pearson is today publishing its financial statements for 2003 and 2004 under International Financial Reporting Standards (IFRS).

For 2004, the primary changes to our reported results under IFRS are:

  • Reported operating profit increases from £231m to £404m and reported eps from 11.1p to 32.9p;
  • Adjusted operating profit decreases from £455m to £421m and adjusted eps from 30.0p to 27.3p;
  • Net assets increase from £2,816m to £3,014m.

IFRS has no effect on cash generation, and a negligible effect on our reported cash flows.

Reported sales are lower because revenues earned by our discontinued business Recoletos (2004 sales: £190m) are not reported under IFRS. We have also deconsolidated a subsidiary, Maskew Miller Longman, which we report under IFRS as a joint venture (2004 sales: £33m).

For 2005, we expect the IFRS effect to be broadly similar to 2004. Our expectation of strong growth with further underlying progress on earnings, cash and return on invested capital is therefore unchanged.

We are holding a conference call and webcast at 14.00 BST (09.00 EST) today with Rona Fairhead, CFO; Robin Freestone, Deputy CFO; and Michael Day, Group Treasurer. You can join this by calling +44 (0) 1296 480 180, passcode: 607291#.

Financial highlights

£ millions

2004
UK GAAP

2004
IFRS

2003
UK GAAP

2003
IFRS

 

 

 

 

 

Sales

3,919

3,696

4,048

3,850

Statutory results

 

 

 

 

Operating profit

231

404

226

406

Profit before tax

171

325

152

313

Basic earnings per share

11.1p

32.9p

6.9p

31.7p

Business performance

 

 

 

 

Adjusted operating profit

455

421

490

443

Adjusted profit before tax

386

345

410

353

Adjusted earnings

239

217

254

217

Adjusted earnings per share

30.0p

27.3p

32.0p

27.3p

 

 

 

 

 

Free cash flow

288

282

192

190

Net borrowings

1,206

1,221

1,361

1,373

Return on invested capital

6.2%

6.1%

6.3%

6.0%

Summary consolidated balance sheet

£ millions

2004
UK GAAP

2004
IFRS

2003
UK GAAP

2003
IFRS

 

 

 

 

 

Goodwill and intangible assets

2,890

3,278

3,260

3,550

Other fixed assets

538

878

553

929

Current assets

2,558

2,064

2,523

2,257

Non-current assets held for sale

-

358

-

-

Total assets

5,986

6,578

6,336

6,736

 

 

 

 

 

Equity and reserves

2,816

3,014

3,088

3,161

Current liabilities

1,275

1,080

1,704

1,593

Non-current liabilities

1,895

2,403

1,544

1,982

Non-current liabilities held for sale

-

81

-

-

Total equity and liabilities

5,986

6,578

6,336

6,736

For more information:

Luke Swanson / Robin Freestone / Charlotte Elston + 44 (0) 20 7010 2310