$PSORF

PEARSON PLC

CIK:0000938323|SEC Filings

Consolidated income statement - GBP (£) £ in Millions	12 Months Ended
Consolidated income statement - GBP (£) £ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Continuing operations
Sales	£ 3,577	£ 3,552	£ 3,674
Cost of goods sold	(1,717)	(1,741)	(1,839)
Gross profit	1,860	1,811	1,835
Operating expenses	(1,351)	(1,265)	(1,322)
Other net gains and losses	(3)	(7)	(16)
Share of results of joint ventures and associates	1	2	1
Operating profit	507	541	498
Finance costs	(98)	(112)	(81)
Finance income	48	81	76
Profit before tax	457	510	493
Income tax	(121)	(75)	(113)
Profit for the year	336	435	380
Attributable to:
Equity holders of the company	335	434	378
Non-controlling interest	£ 1	£ 1	£ 2
Earnings per share attributable to equity holders of the company during the year (expressed in pence per share)
• basic	£ 0.514	£ 0.645	£ 0.531
• diluted	£ 0.507	£ 0.635	£ 0.527

Consolidated cash flow statement - GBP (£) £ in Millions	12 Months Ended
Consolidated cash flow statement - GBP (£) £ in Millions	Dec. 31, 2025	Dec. 31, 2024	Dec. 31, 2023
Cash flows from operating activities
Profit before tax	£ 457	£ 510	£ 493
Net finance costs	50	31	5
Depreciation and impairment – PPE, investment property and assets held for sale	54	77	90
Amortisation and impairment – software	112	117	123
Amortisation and impairment – acquired intangible assets	41	41	46
Other net gains and losses	3	5	13
Product development capital expenditure	(285)	(284)	(300)
Amortisation and impairment – product development	364	291	284
Share-based payment costs	39	44	40
Change in inventories	5	15	9
Change in trade and other receivables	(104)	32	(24)
Change in trade and other liabilities	35	(99)	(20)
Change in provisions for other liabilities and charges	(19)	(1)	(61)
Other movements	(21)	32	(16)
Net cash generated from operations	731	811	682
Interest paid	(73)	(65)	(60)
Tax paid	(2)	(119)	(97)
Net cash generated from operating activities	656	627	525
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired	(167)	(39)	(171)
Acquisition of joint ventures and associates			(5)
Purchase of investments	(5)	(7)	(8)
Purchase of property, plant and equipment and investment property	(29)	(33)	(30)
Purchase of intangible assets	(105)	(91)	(96)
Disposal of subsidiaries, net of cash disposed	8	(7)	(38)
Proceeds from disposal of investments			7
Proceeds from disposal of property, plant and equipment	3	6	5
Lease receivables repaid including disposals	18	18	15
Interest received	33	20	20
Dividends received	1	2
Net cash used in investing activities	(243)	(131)	(301)
Cash flows from financing activities
Proceeds from issue of ordinary shares	9	7	9
Buyback of equity	(352)	(318)	(186)
Settlement of share-based payments	(72)	(40)	(35)
Proceeds from borrowings	1,017	1,265	285
Repayment of borrowings	(974)	(921)	(285)
Repayment of lease liabilities	(77)	(78)	(84)
Dividends paid to company's shareholders	(160)	(156)	(154)
Net cash used in financing activities	(609)	(241)	(450)
Effects of exchange rate changes on cash and cash equivalents	(14)	(21)	(8)
Net (decrease)/increase in cash and cash equivalents	(210)	234	(234)
Cash and cash equivalents at beginning of year	543	309	543
Cash and cash equivalents at end of year	£ 333	£ 543	£ 309

Consolidated balance sheet - GBP (£) £ in Millions	Dec. 31, 2025	Dec. 31, 2024
Non-current assets
Property, plant and equipment	£ 210	£ 216
Investment property	91	77
Intangible assets	3,009	3,026
Investments in joint ventures and associates	8	12
Deferred income tax assets	58	52
Financial assets – derivative financial instruments	14	20
Retirement benefit assets	518	491
Other financial assets	125	141
Income tax assets	0	4
Trade and other receivables	105	125
Total non-current assets	4,138	4,164
Current assets
Intangible assets – product development	822	947
Inventories	66	74
Trade and other receivables	1,082	1,030
Financial assets – derivative financial instruments	2	31
Income tax assets	15	103
Cash and cash equivalents (excluding overdrafts)	333	543
Total current assets	2,320	2,728
Total assets	6,458	6,892
Non-current liabilities
Financial liabilities – borrowings	(1,419)	(1,157)
Financial liabilities – derivative financial instruments	(2)	(4)
Deferred income tax liabilities	(89)	(63)
Retirement benefit obligations	(36)	(41)
Provisions for other liabilities and charges	(12)	(13)
Other liabilities	(76)	(83)
Non-current liabilities	(1,634)	(1,361)
Current liabilities
Trade and other liabilities	(1,043)	(1,054)
Financial liabilities – borrowings	(62)	(315)
Financial liabilities – derivative financial instruments	(1)	(54)
Income tax liabilities	(47)	(32)
Provisions for other liabilities and charges	(8)	(23)
Total current liabilities	(1,161)	(1,478)
Total liabilities	(2,795)	(2,839)
Net assets	3,663	4,053
Equity
Share capital	158	166
Share premium	2,658	2,649
Treasury shares	(9)	(7)
Capital redemption reserve	49	41
Fair value reserve	(21)	(14)
Translation reserve	184	376
Retained earnings	629	827
Total equity attributable to equity holders of the company	3,648	4,038
Non-controlling interest	15	15
Total equity	£ 3,663	£ 4,053