Pearson IFRS briefing
Pearson provided details of the effect of IFRS on our reported results for 2003 and 2004.
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#.
£ millions | 2004 | 2004 | 2003 | 2003 |
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Sales | 3,919 | 3,696 | 4,048 | 3,850 |
Statutory results |
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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 |
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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 |
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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% |
£ millions | 2004 | 2004 | 2003 | 2003 |
|---|---|---|---|---|
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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 |
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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