Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2018shares | |
Document and entity information [abstract] | |
Document Type | 20-F |
Amendment Flag | false |
Document Period End Date | Dec. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | FY |
Trading Symbol | PSO |
Entity Registrant Name | PEARSON PLC |
Entity Central Index Key | 0000938323 |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 781,078,167 |
Consolidated income statement
Consolidated income statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Continuing operations | |||
Sales | £ 4,129 | £ 4,513 | £ 4,552 |
Cost of goods sold | (1,943) | (2,066) | (2,093) |
Gross profit | 2,186 | 2,447 | 2,459 |
Operating expenses | (1,907) | (2,202) | (2,480) |
Other net gains and losses | 230 | 128 | (25) |
Impairment of intangible assets | (2,548) | ||
Share of results of joint ventures and associates | 44 | 78 | 97 |
Operating (loss)/profit | 553 | 451 | (2,497) |
Finance costs | (91) | (110) | (97) |
Finance income | 36 | 80 | 37 |
Profit before tax | 498 | 421 | (2,557) |
Income tax | 92 | (13) | 222 |
Profit/(loss) for the year | 590 | 408 | (2,335) |
Attributable to: | |||
Equity holders of the company | 588 | 406 | (2,337) |
Non-controlling interest | £ 2 | £ 2 | £ 2 |
Earnings per share attributable to equity holders of the company during the year (expressed in pence per share) | |||
- basic | £ 0.756 | £ 0.499 | £ (2.688) |
- diluted | £ 0.755 | £ 0.499 | £ (2.688) |
Consolidated statement of compr
Consolidated statement of comprehensive income - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement [LineItems] | |||
Profit for the year | £ 590 | £ 408 | £ (2,335) |
Items that may be reclassified to the income statement | |||
Currency translation adjustment disposed | (4) | (51) | |
Attributable tax | (4) | 9 | (5) |
Items that are not reclassified to the income statement | |||
Fair value gain on other financial assets | 8 | 13 | |
Attributable tax | (4) | ||
Attributable tax | 9 | (42) | 58 |
Other comprehensive income/(expense) for the year | 124 | (155) | 690 |
Total comprehensive income for the year | 714 | 253 | (1,645) |
Attributable to: | |||
Equity holders of the company | 712 | 251 | (1,648) |
Non-controlling interest | 2 | 2 | 3 |
Group [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | 91 | (158) | 910 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 22 | 175 | (268) |
Associates [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | (1) | (104) | 3 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | £ 3 | £ 7 | £ (8) |
Consolidated balance sheet
Consolidated balance sheet - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Non-current assets | ||
Property, plant and equipment | £ 237 | £ 281 |
Intangible assets | 3,009 | 2,964 |
Investments in joint ventures and associates | 392 | 398 |
Deferred income tax assets | 60 | 95 |
Financial assets - derivative financial instruments | 67 | 140 |
Retirement benefit assets | 571 | 545 |
Other financial assets | 93 | 77 |
Trade and other receivables | 100 | 103 |
Total non-current assets | 4,529 | 4,603 |
Current assets | ||
Intangible assets - pre-publication | 817 | 741 |
Inventories | 164 | 148 |
Trade and other receivables | 1,178 | 1,110 |
Financial assets - derivative financial instruments | 1 | |
Financial assets - marketable securities | 8 | |
Cash and cash equivalents (excluding overdrafts) | 568 | 518 |
Total current assets | 2,728 | 2,525 |
Assets classified as held for sale | 648 | 760 |
Total assets | 7,905 | 7,888 |
Non-current liabilities | ||
Financial liabilities - borrowings | (674) | (1,066) |
Financial liabilities - derivative financial instruments | (36) | (140) |
Deferred income tax liabilities | (136) | (164) |
Retirement benefit obligations | (100) | (104) |
Provisions for other liabilities and charges | (145) | (55) |
Other liabilities | (155) | (133) |
Non-current liabilities | (1,246) | (1,662) |
Current liabilities | ||
Trade and other liabilities | (1,400) | (1,342) |
Financial liabilities - borrowings | (46) | (19) |
Financial liabilities - derivative financial instruments | (23) | |
Current income tax liabilities | (72) | (231) |
Provisions for other liabilities and charges | (20) | (25) |
Total current liabilities | (1,561) | (1,617) |
Liabilities classified as held for sale | (573) | (588) |
Total liabilities | (3,380) | (3,867) |
Net assets | 4,525 | 4,021 |
Equity | ||
Share capital | 195 | 200 |
Share premium | 2,607 | 2,602 |
Treasury shares | (33) | (61) |
Capital redemption reserve | 11 | 5 |
Fair value reserve | 19 | 13 |
Translation reserve | 678 | 592 |
Retained earnings | 1,039 | 662 |
Total equity attributable to equity holders of the company | 4,516 | 4,013 |
Non-controlling interest | 9 | 8 |
Total equity | £ 4,525 | £ 4,021 |
Consolidated statement of chang
Consolidated statement of changes in equity - GBP (£) £ in Millions | Total | Share capital [member] | Share premium [member] | Treasury shares [member] | Capital redemption reserve [member] | Fair value reserve [member] | Translation reserve [member] | Retained earnings [member] | Equity attributable to equity holders of the company [member] | Non-controlling interest [member] |
Beginning Balance at Dec. 31, 2015 | £ 6,418 | £ 205 | £ 2,590 | £ (72) | £ (7) | £ 3,698 | £ 6,414 | £ 4 | ||
Statement [LineItems] | ||||||||||
Profit for the year | (2,335) | (2,337) | (2,337) | 2 | ||||||
Other comprehensive income/(expense) | 690 | 912 | (223) | 689 | 1 | |||||
Total comprehensive income/(expense) | (1,645) | 912 | (2,560) | (1,648) | 3 | |||||
Equity-settled transactions | 22 | 22 | 22 | |||||||
Tax on equity settled transactions | 0 | |||||||||
Issue of ordinary shares under share option schemes | 7 | 7 | 7 | |||||||
Buyback of equity | 0 | |||||||||
Purchase of treasury shares | (27) | (27) | (27) | |||||||
Release of treasury shares | 20 | (20) | ||||||||
Transfer of gain on disposal of FVOCI investment | 0 | |||||||||
Changes in non-controlling interest | (3) | (3) | ||||||||
Dividends | (424) | (424) | (424) | |||||||
Ending balance at Dec. 31, 2016 | 4,348 | 205 | 2,597 | (79) | 905 | 716 | 4,344 | 4 | ||
Statement [LineItems] | ||||||||||
Profit for the year | 408 | 406 | 406 | 2 | ||||||
Other comprehensive income/(expense) | (155) | £ 13 | (313) | 145 | (155) | |||||
Total comprehensive income/(expense) | 253 | 13 | (313) | 551 | 251 | 2 | ||||
Equity-settled transactions | 33 | 33 | 33 | |||||||
Tax on equity settled transactions | 0 | |||||||||
Issue of ordinary shares under share option schemes | 5 | 5 | 5 | |||||||
Buyback of equity | (300) | (5) | £ 5 | (300) | (300) | |||||
Release of treasury shares | (18) | 18 | (18) | |||||||
Changes in non-controlling interest | (2) | (2) | 2 | |||||||
Dividends | (318) | (318) | (318) | |||||||
Ending balance at Dec. 31, 2017 | 4,021 | 200 | 2,602 | (61) | 5 | 13 | 592 | 662 | 4,013 | 8 |
Statement [LineItems] | ||||||||||
Profit for the year | 590 | 588 | 588 | 2 | ||||||
Other comprehensive income/(expense) | 124 | 8 | 86 | 30 | 124 | |||||
Total comprehensive income/(expense) | 714 | 8 | 86 | 618 | 712 | 2 | ||||
Equity-settled transactions | 37 | 37 | 37 | |||||||
Tax on equity settled transactions | 4 | 4 | 4 | |||||||
Issue of ordinary shares under share option schemes | 6 | 1 | 5 | 6 | ||||||
Buyback of equity | (2) | (6) | 6 | (2) | (2) | |||||
Release of treasury shares | (28) | 28 | (28) | |||||||
Transfer of gain on disposal of FVOCI investment | (2) | 2 | ||||||||
Dividends | (137) | (136) | (136) | (1) | ||||||
Ending balance at Dec. 31, 2018 | 4,525 | 195 | 2,607 | (33) | 11 | 19 | 678 | 1,039 | 4,516 | 9 |
Statement [LineItems] | ||||||||||
Adjustment on initial application of IFRS 15 net of tax (see note 1b) | Translation adjustment [member] | (108) | (108) | (108) | |||||||
Adjustment on initial application of IFRS 15 net of tax (see note 1b) | Increase (decrease) due to application of IFRS 9 [member] | (10) | (10) | (10) | |||||||
Beginning balance | £ 3,903 | £ 200 | £ 2,602 | £ (61) | £ 5 | £ 13 | £ 592 | £ 544 | £ 3,895 | £ 8 |
Consolidated cash flow statemen
Consolidated cash flow statement - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net cash generated from operations | £ 547 | £ 462 | £ 522 |
Interest paid | (42) | (89) | (67) |
Tax paid | (43) | (75) | (45) |
Net cash generated from operating activities | 462 | 298 | 410 |
Cash flows from investing activities | |||
Acquisition of subsidiaries, net of cash acquired | (5) | (11) | (15) |
Purchase of investments | (10) | (3) | (6) |
Purchase of property, plant and equipment | (70) | (82) | (88) |
Purchase of intangible assets | (130) | (150) | (157) |
Disposal of subsidiaries, net of cash disposed | 83 | 19 | (54) |
Proceeds from sale of associates | 18 | 411 | 4 |
Proceeds from sale of investments | 6 | 92 | |
Proceeds from sale of property, plant and equipment | 128 | 4 | |
Proceeds from sale of liquid resources | 10 | 20 | 42 |
Loans repaid by/(advance to) related parties | 46 | (13) | 14 |
Investment in liquid resources | (2) | (18) | (24) |
Interest received | 20 | 20 | 16 |
Dividends received from joint ventures and associates | 117 | 458 | 131 |
Net cash generated from/(used in) investing activities | 211 | 651 | (41) |
Cash flows from financing activities | |||
Proceeds from issue of ordinary shares | 6 | 5 | 7 |
Buyback of equity | (153) | (149) | |
Purchase of treasury shares | (27) | ||
Proceeds from borrowings | 2 | 4 | |
Repayment of borrowings | (441) | (1,294) | (249) |
Finance lease principal payments | (4) | (5) | (6) |
Dividends paid to company's shareholders | (136) | (318) | (424) |
Dividends paid to non-controlling interest | (1) | ||
Transactions with non-controlling interest | (2) | ||
Net cash used in financing activities | (729) | (1,759) | (697) |
Effects of exchange rate changes on cash and cash equivalents | (49) | 16 | 81 |
Net decrease in cash and cash equivalents | (105) | (794) | (247) |
Cash and cash equivalents at beginning of year | 630 | 1,424 | 1,671 |
Cash and cash equivalents at end of year | £ 525 | £ 630 | £ 1,424 |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Accounting policies | 1a. Accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. Basis of preparation These consolidated financial statements have been prepared on the going concern basis and in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as issued by the IASB and in conformity with IFRS as adopted by the European Union (EU). These consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities (including derivative financial instruments) at fair value. These accounting policies have been consistently applied to all years presented, unless otherwise stated. 1. Interpretations and amendments to published standards effective 2018 • IFRS 15 Revenue from Contracts with Customers • IFRS 9 Financial Instruments The impact of the adoption of these new standards is set out in notes 1b and 1c. A number of other new pronouncements are also effective from 1 January 2018 but they do not have a material impact on the consolidated financial statements. Additional disclosure has been given where relevant. 2. Standards, interpretations and amendments to published standards that are not yet effective IFRS 16 ‘Leases’, effective for annual reporting periods beginning on or after 1 January 2019. The Group will apply IFRS 16 on 1 January 2019 using the modified retrospective approach. Under this approach, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings on 1 January 2019, with no restatement of comparative information. IFRS 16 requires lessees to recognise right-of-use The Group has assessed the impact of adopting IFRS 16 with reference to its existing lease portfolio. The most significant part of the portfolio is property leases, amounting to approximately 750, together with a number of low value vehicle and equipment leases. The lease liability has been measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate at transition. The right-of-use right-of-use Adoption of the new standard will have a material impact on the Group. It is estimated that on transition the lease liability to be brought on balance sheet will be around £910m with the corresponding right-of-use In June 2015, the IASB issued an exposure draft ED/2015/5 ‘Remeasurement on a Plan Amendment, Curtailment or Settlement/ Availability of a Refund from a Defined benefit Plan (Proposed Amendments to IAS 19 and IFRIC 14)’. The proposed amendments to IFRIC 14, which may have restricted the Group’s ability to recognise a pension asset in respect of pension surpluses in its UK defined benefit plan, are currently on hold with the IASB. A number of other new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2019, and have not been applied in preparing these financial statements. None of these is expected to have a material impact on the consolidated financial statements. 3. Critical accounting assumptions and judgements Intangible assets: Goodwill Intangible assets: Pre-publication Taxation Revenue recognition including provisions for returns Employee benefits: Pensions Provisions: Onerous leases Consolidation 1. Business combinations The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred in the operating expenses line of the income statement. Identifiable assets acquired and identifiable liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The determination of fair values often requires significant judgements and the use of estimates, and, for material acquisitions, the fair value of the acquired intangible assets is determined by an independent valuer. The excess of the consideration transferred, the amount of any non-controlling See the ‘Intangible assets’ policy for the accounting policy on goodwill. If this is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement. On an acquisition-by-acquisition non-controlling non-controlling IFRS 3 ‘Business Combinations’ has not been applied retrospectively to business combinations before the date of transition to IFRS. Management exercises judgement in determining the classification of its investments in its businesses, in line with the following: 2. Subsidiaries 3. Transactions with non-controlling non-controlling non-controlling non-controlling 4. Joint ventures and associates The Group’s share of its joint ventures’ and associates’ post-acquisition profits or losses is recognised in the income statement and its share of post-acquisition movements in reserves is recognised in reserves. The Group’s share of its joint ventures’ and associates’ results is recognised as a component of operating profit as these operations form part of the core publishing business of the Group and are an integral part of existing wholly-owned businesses. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint venture or associate equals or exceeds its interest in the joint venture or associate, the Group does not recognise further losses unless the Group has incurred obligations or made payments on behalf of the joint venture or associate. Unrealised gains and losses on transactions between the Group and its joint ventures and associates are eliminated to the extent of the Group’s interest in these entities. 5. Contribution of a subsidiary to an associate or joint venture Foreign currency translation 1. Functional and presentation currency 2. Transactions and balances year-end 3. Group companies i) Assets and liabilities are translated at the closing rate at the date of the balance sheet ii) Income and expenses are translated at average exchange rates iii) All resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. The Group treats specific inter-company loan balances, which are not intended to be repaid in the foreseeable future, as part of its net investment. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. The principal overseas currency for the Group is the US dollar. The average rate for the year against sterling was $1.34 (2017: $1.30) and the year-end Property, plant and equipment Property, plant and equipment are stated at historical cost less depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for intended use. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost less their residual values over their estimated useful lives as follows: Buildings (freehold): 20 – 50 years Buildings (leasehold): over the period of the lease Plant and equipment: 3 – 10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The carrying value of an asset is written down to its recoverable amount if the carrying value of the asset is greater than its estimated recoverable amount. Intangible assets 1. Goodwill non-controlling Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. An impairment loss is recognised to the extent that the carrying value of goodwill exceeds the recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. These calculations require the use of estimates in respect of forecast cash flows and discount rates and significant management judgement in respect of CGU and cost allocation. A description of the key assumptions and sensitivities is included in note 11. Goodwill is allocated to aggregated cash-generating units for the purpose of impairment testing. The allocation is made to those aggregated cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. 2. Acquired software 3. Internally developed software 4. Acquired intangible assets 5. Pre-publication Pre-publication Pre-publication The assessment of the useful economic life and the recoverability of pre-publication Reviews are performed regularly to estimate recoverability of pre-publication pre-publication The investment in pre-publication Other financial assets Other financial assets are non-derivative Marketable securities and cash deposits with maturities of greater than three months are classified and subsequently measured at fair value through profit and loss. They are remeasured at each balance sheet date by using market data and the use of established valuation techniques. Any movement in the fair value is immediately recognised in finance income or finance costs in the income statement. Investments in the equity instruments of other entities are classified and subsequently measured at fair value through other comprehensive income. Changes in fair value are recorded in equity in the fair value reserve via other comprehensive income. On subsequent disposal of the asset, the net fair value gains or losses are reclassified from the fair value reserve to retained earnings. Any dividends received from equity investments classified as fair value through other comprehensive income are recognised in the P&L unless they represent a return of capital. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method or an approximation thereof, such as the first in first out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale. Provisions are made for slow-moving and obsolete stock. Royalty advances Advances of royalties to authors are included within trade and other receivables when the advance is paid less any provision required to adjust the advance to its net realisable value. The realisable value of royalty advances relies on a degree of management estimation in determining the profitability of individual author contracts. If the estimated realisable value of author contracts is overstated, this will have an adverse effect on operating profits as these excess amounts will be written off. The recoverability of royalty advances is based upon an annual detailed management review of the age of the advance, the future sales projections for new authors and prior sales history of repeat authors. The royalty advance is expensed at the contracted or effective royalty rate as the related revenues are earned. Royalty advances which will be consumed within one year are held in current assets. Royalty advances which will be consumed after one year are held in non-current Cash and cash equivalents Cash and cash equivalents in the cash flow statement include cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included in borrowings in current liabilities in the balance sheet. Short-term deposits and marketable securities with maturities of greater than three months do not qualify as cash and cash equivalents and are reported as financial assets. Movements on these financial assets are classified as cash flows from financing activities in the cash flow statement where these amounts are used to offset the borrowings of the Group or as cash flows from investing activities where these amounts are held to generate an investment return. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs, net of income taxes, is deducted from equity attributable to the company’s equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders. Ordinary shares purchased under a buyback programme are cancelled and the nominal value of the shares is transferred to a capital redemption reserve. Borrowings Borrowings are recognised initially at fair value, which is proceeds received net of transaction costs incurred. Borrowings are subsequently stated at amortised cost with any difference between the proceeds (net of transaction costs) and the redemption value being recognised in the income statement over the period of the borrowings using the effective interest method. Accrued interest is included as part of borrowings. Where a debt instrument is in a fair value hedging relationship, an adjustment is made to its carrying value in the income statement to reflect the hedged risk. Where a debt instrument is in a net investment hedge relationship gains and losses on the effective portion of the hedge are recognised in other comprehensive income. Derivative financial instruments Derivatives are recognised at fair value and remeasured at each balance sheet date. The fair value of derivatives is determined by using market data and the use of established estimation techniques such as discounted cash flow and option valuation models. For derivatives in a hedge relationship, the currency basis spread is excluded from the designation as a hedging instrument and is separately accounted for as a cost of hedging, which is recognised in equity in a cost of hedging reserve. Changes in the fair value of derivatives are recognised immediately in finance income or costs. However, derivatives relating to borrowings and certain foreign exchange contracts are designated as part of a hedging transaction. The accounting treatment is summarised as follows: Typical reason for designation Reporting of gains and losses on Reporting of gains and Net investment hedge The derivative creates a foreign currency liability which is used to hedge changes in the value of a subsidiary which transacts in that currency. Recognised in other comprehensive income. On disposal, the accumulated value of gains and losses reported in other comprehensive income is transferred to the income statement. Fair value hedges The derivative transforms the interest profile on debt from fixed rate to floating rate. Changes in the value of the debt as a result of changes in interest rates are offset by equal and opposite changes in the value of the derivative. When the Group’s debt is swapped to floating rates, the contracts used are designated as fair value hedges. Gains and losses on the derivative are reported in finance income or finance costs. However, an equal and opposite change is made to the carrying value of the debt (a ‘fair value adjustment’) with the benefit/cost reported in finance income or finance costs. The net result should be a zero charge on a perfectly effective hedge. If the debt and derivative are disposed of, the value of the derivative and the debt (including the fair value adjustment) are reset to zero. Any resultant gain or loss is recognised in finance income or finance costs. Non-hedge These are not designated as hedging instruments. Typically these are short-term contracts to convert debt back to fixed rates or foreign exchange contracts where a natural offset exists. No hedge accounting applies. Taxation Current tax is recognised at the amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax is provided, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided in respect of the undistributed earnings of subsidiaries, associates and joint ventures other than where it is intended that those undistributed earnings will not be remitted in the foreseeable future. Current and deferred tax are recognised in the income statement, except when the tax relates to items charged or credited directly to equity or other comprehensive income, in which case the tax is also recognised in equity or other comprehensive income. The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the estimates in relation to the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises tax provisions when it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are based on management’s best judgement of the application of tax legislation and best estimates of future settlement amounts (see note 7). Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Deferred tax assets and liabilities require management judgement and estimation in determining the amounts to be recognised. In particular, when assessing the extent to which deferred tax assets should be recognised, significant judgement is used when considering the timing of the recognition and estimation is used to determine the level of future taxable income together with any future tax planning strategies (see note 13). Employee benefits 1. Pensions When the calculation results in a potential asset, the recognition of that asset is limited to the asset ceiling – that is the present value of any economic benefits available in the form of refunds from the plan or a reduction in future contributions. Management uses judgement to determine the level of refunds available from the plan in recognising an asset. The determination of the pension cost and defined benefit obligation of the Group’s defined benefit pension schemes depends on the selection of certain assumptions, which include the discount rate, inflation rate, salary growth and longevity (see note 25). Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. The service cost, representing benefits accruing over the year, is included in the income statement as an operating cost. Net interest is calculated by applying the discount rate to the net defined benefit obligation and is presented as finance costs or finance income. Obligations for contributions to defined contribution pension plans are recognised as an operating expense in the income statement as incurred. 2. Other post-retirement obligations 3. Share-based payments Provisions The Group recognises a provision for deferred consideration. Where this is contingent on future performance or a future event, judgement is exercised in establishing the fair value. The Group recognises a provision for onerous lease contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. The calculation of onerous lease provisions involves estimates of potential sublet income, lease terms including rent free periods, void periods, lease incentives and running costs. The provision is based on the present value of future payments for surplus leased properties under non-cancellable sub-leasing Revenue recognition The Group’s revenue streams are courseware, assessments and services. Courseware includes curriculum materials provided in book form and/or via access to digital content. Assessments includes test development, processing and scoring services provided to governments, educational institutions, corporations and professional bodies. Services includes the operation of schools, colleges and universities, including sistemas in Brazil, as well as the provision of online learning services in partnership with universities and other academic institutions. Revenue is recognised in order to depict the transfer of control of promised goods and services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. This process begins with the identification of our contract with a customer, which is generally through a master services agreement, customer purchase order, or a combination thereof. Within each contract, judgement is applied to determine the extent to which activities within the contract represent distinct performance obligations to be delivered and the total amount of transaction price to which we expect to be entitled. The transaction price determined is net of sales taxes, rebates and discounts, and after eliminating sales within the Group. Where a contract contains multiple performance obligations such as the provision of supplementary materials or online access with textbooks, revenue is allocated on the basis of relative standalone selling prices. Where a contract contains variable consideration significant estimation is required to determine the amount to which the Group is expected to be entitled. Revenue is recognised on contracts with customers when or as performance obligations are satisfied which is the period or the point in time where control of goods or services transfer to the customer. Judgement is applied to determine first whether control passes over time and if not, then the point in time at which control passes. Where revenue is recognised over time judgement is used to determine the method which best depicts the transfer of control. Where an input method is used significant estimation is required to determine the progress towards delivering the performance obligation. Revenue from the sale of books is recognised net of a provision for anticipated returns. This provision is based primarily on historical return rates, customer buying patterns and retailer behaviours including stock levels (see note 22). If these estimates do not reflect actual returns in future periods then revenues could be understated or overstated for a particular period. When the provision for returns is remeasured at each reporting date to reflect changes in estimates, a corresponding adjustment is also recorded to revenue. The Group may enter into contracts with another party in addition to our customer. In making the determination as to whether revenue should be recognised on a gross or net basis, the contract with the customer is analysed to understand which party controls the relevant good or service prior to transferring to the customer. This judgement is informed by facts and circumstances of the contract in determining whether the Group has promised to provide the specified good or service or whether the Group is arranging for the transfer of the specified good or service, including which party is responsible for fulfillment, has discretion to set the price to the customer and is responsible for inventory risk. On certain contracts, where the Group acts as an agent, only commissions and fees receivable for services rendered are recognised as revenue. Any third-party costs incurred on behalf of the principal that are rechargeable under the contractual arrangement are not included in revenue. Income from recharges of freight and other activities which are incidental to the normal revenue-generating activities is included in other income. The Group has applied IFRS 15 using the cumulative effect method and therefore comparative information has not been restated and continues to be reported under IAS 18 and IAS 11. The details of accounting policies under IAS 18 and IAS 11 are disclosed separately if they are different from those under IFRS 15. A description of the changes impacting the Group as well as a quantitative impact analysis has been disclosed in note 1b. Additional details on the Group’s revenue streams are also included in note 3. Leases Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in financial liabilities – borrowings. The interest element of the finance cost is charged to the income statement over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases by the lessee. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. Dividends Final dividends are recorded in the Group’s financial statements in the period in which they are approved by the company’s shareholders. Interim dividends are recorded when paid. Discontinued operations A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or meets the criteria to be classified as held for sale. Discontinued operations are presented in the income statement as a separate line and are shown net of tax. Assets and liabilities held for sale Assets and liabilities are classified as held for sale and stated at the lower of carrying amount and fair value less costs to sell if it is highly probable that the carrying amount will be recovered principally through a sale transaction rather than through continuing use. No depreciation is charged in respect of non-current non-current Trade receivables Trade receivables are stated at fair value after provision for bad and doubtful debts. Following the adoption of IFRS 9 in 2018, provisions for bad and doubtful debts are based on the expected credit loss model. The ‘simplified approach’ is used with the expected loss allowance measured at an amount equal to the lifetime expected credit losses. In 2017, trade receivables are also stated after provision for anticipated future sales returns (also see Revenue recognition policy and note 1b). 1b. Change of accounting policy: IFRS 15 The Group has adopted IFRS 15 ‘Revenue from Contracts with Customers’ at 1 January 2018 and applied the modified retrospective approach. Comparatives for 2017 have not been restated and the cumulative impact of adoption has been recognised as a decrease to retained earnings with a corresponding decrease in net assets at 1 January 2018 as follows: All figures in £ millions 2018 Retained earnings Unexercised customer rights (or breakage) (103 ) Online Program Management (OPM) marketing (38 ) Administration fees (2 ) Commissions 1 Income tax 34 Total impact at 1 January 2018 (108 ) Current assets Inventories 12 Trade and other receivables 133 Assets classified as held for sale 31 Non-current Deferred income tax liabilities 16 Current liabilities Trade and other liabilities (215 ) Liabilities classified as held for sale (85 ) Total impact at 1 January 2018 (108 ) IFRS 15 has had an impact on retained earnings in four areas as outlined below. There was no net impact on any associate investments of the Group. Unexercised customer rights (or breakage): The Group sells rights to future performance to customers which may go unexercised. While the customer has paid for future performance, usage is at the customer’s discretion and those rights may expire prior to usage, or never be used. The Group maintains historical customer data to understand usage patterns over time (i.e. redemption rates). Where the Group expects to have no future obligation (based on these redemption rates), revenue has historically been recognised immediately for this portion of the sale. Under IFRS 15, where the Group previously recognised this breakage element on subscriptions, revenue is now recognised evenly over the period of use. Where breakage relates to sales of tests or vouchers, revenue is now recognised when the underlying tests are delivered. This revised treatment in respect of breakage has primarily affected the school and higher education businesses in North America and resulted in higher deferred income at adoption on 1 January 2018. Online Program Management (OPM) marketing: Historically the OPM business recognised revenue for the pre-semester pre-semester pre-semester Administration fees: This relates to non-refundable up-front Commissions: This relates to incremental costs of obtaining customer contracts, such as sales incentive plans or sales commissions specifically linked to obtaining new contracts. Historically such commissions have been charged to the profit and loss account as incurred. Under IFRS 15, sales commissions in respect of customer transactions with an accounting period of greater than one year have been capitalised and amortised over that accounting period, using practical expedients permissible under the new standard. This revised treatment affects the US Assessments business and resulted in a higher contract related asset upon adoption on 1 January 2018. In addition to the changes above, IFRS 15 also requires that the Group’s provision for sales returns is reclassified. This provision was previously netted off in trade receivables and from 1 January 2018 this is now shown in two parts as a separate sales return liability within trade and other liabilities and an inventory returns asset within inventory. The effect on transition was to increase trade and other receivables by £170m, increase trade and other liabilities by £182m and inventory by £12m. In addition, held for sale assets and liabilities were both increased by £13m. The impact of adoption on the results for 2018 is outlined below. 2018 All figures in £ millions Amounts pre Transition In period Amounts as Sales 4,120 — 9 4,129 Operating profit 544 — 9 553 Profit before tax 489 — 9 498 Income tax 94 — (2 ) 92 Profit for the year 583 — 7 590 Other comprehensive income/(expense) for the year 130 — (6 ) 124 Total comprehensive income for the year 713 — 1 714 Current assets Inventories 154 12 (2 ) 164 Trade and other receivables 1,058 133 (13 ) 1,178 Assets classified as held for sale 630 31 (13 ) 648 Non-current Deferred income tax liabilities (154 ) 16 2 (136 ) Current liabilities Trade and other liabilitie |
Segment information
Segment information | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Segment information | 2. Segment information The primary segments for management and reporting are geographies as outlined below. In addition, the Group separately discloses the results from the Penguin Random House associate. The chief operating decision-maker is the Pearson executive. North America: Courseware, Assessments and Services businesses in the US and Canada. Core: Courseware, Assessments and Services businesses in more mature markets including UK, Europe, Asia Pacific and North Africa. Growth: Courseware, Assessments and Services businesses in emerging markets including Brazil, India, South Africa, Hispano-America, Hong Kong and China, and the Middle East. For more detail on the services and products included in each business segment refer to Item 4. 2018 All figures in £ millions Notes North Core Growth Penguin Corporate Group Sales 2,784 806 539 — — 4,129 Adjusted operating profit 362 57 59 68 — 546 Cost of major restructuring (78 ) (16 ) — (8 ) — (102 ) Intangible charges (72 ) (8 ) (19 ) (14 ) — (113 ) Other net gains and losses 4 — 226 — — 230 UK pension GMP equalisation — (8 ) — — — (8 ) Operating profit 216 25 266 46 — 553 Finance costs 6 (91 ) Finance income 6 36 Profit before tax 498 Income tax 7 92 Profit for the year 590 Segment assets 4,366 1,975 536 — 636 7,513 Joint ventures 12 — — — — — — Associates 12 — 5 — 387 — 392 Total assets 4,366 1,980 536 387 636 7,905 Other segment items Share of results of joint ventures and associates 12 (4 ) 1 1 46 — 44 Capital expenditure 10, 11 135 25 36 — — 196 Pre-publication 20 234 90 64 — — 388 Depreciation 10 41 12 13 — — 66 Amortisation 11, 20 344 92 89 — — 525 Included in the North America segment above is £60m in pre-publication 2017 All figures in £ millions Notes North Core Growth Penguin Corporate Group Sales 2,929 815 769 — — 4,513 Adjusted operating profit 394 50 38 94 — 576 Cost of major restructuring (60 ) (11 ) (8 ) — — (79 ) Intangible charges (89 ) (12 ) (37 ) (28 ) — (166 ) Other net gains and losses (3 ) — 35 96 — 128 Impact of US tax reform — — — (8 ) — (8 ) Operating profit 242 27 28 154 — 451 Finance costs 6 (110 ) Finance income 6 80 Profit before tax 421 Income tax 7 (13 ) Profit for the year 408 Segment assets 4,116 1,914 667 — 793 7,490 Joint ventures 12 — — 3 — — 3 Associates 12 4 3 — 388 — 395 Total assets 4,120 1,917 670 388 793 7,888 Other segment items Share of results of joint ventures and associates 12 5 1 1 71 — 78 Capital expenditure 10,11 162 35 43 — — 240 Pre-publication 20 218 84 59 — — 361 Depreciation 10 56 13 21 — — 90 Amortisation 11,20 348 103 110 — — 561 2016 All figures in £ millions Notes North Core Growth Penguin Corporate Group Continuing operations Sales 2,981 803 768 — — 4,552 Adjusted operating profit 420 57 29 129 — 635 Cost of major restructuring (172 ) (62 ) (95 ) (9 ) — (338 ) Intangible charges (2,684 ) (16 ) (33 ) (36 ) — (2,769 ) Other net gains and losses (12 ) (12 ) (1 ) — — (25 ) Operating (loss)/profit (2,448 ) (33 ) (100 ) 84 — (2,497 ) Finance costs 6 (97 ) Finance income 6 37 Loss before tax (2,557 ) Income tax 7 222 Loss for the year from continuing operations (2,335 ) Segment assets 4,859 1,461 859 — 1,640 8,819 Joint ventures 12 — — 2 — — 2 Associates 12 1 4 — 1,240 — 1,245 Total assets 4,860 1,465 861 1,240 1,640 10,066 Other segment items Share of results of joint ventures and associates 12 (1 ) 1 (1 ) 98 — 97 Capital expenditure 10, 11 153 42 51 — — 246 Pre-publication investment 20 235 92 68 — — 395 Depreciation 10 56 12 27 — — 95 Amortisation 11, 20 394 109 116 — — 619 Impairment 11 2,548 — — — — 2,548 There were no material inter-segment sales in either 2018, 2017 or 2016. Adjusted operating profit is shown in the above tables as it is the key financial measure used by management to evaluate the performance of the Group and allocate resources to business segments. The measure also enables investors to more easily, and consistently, track the underlying operational performance of the Group and its business segments over time by separating out those items of income and expenditure relating to acquisition and disposal transactions, major restructuring programmes and certain other items that are also not representative of underlying performance, which are explained below. Cost of major restructuring: In May 2017, the Group announced a restructuring programme, to run between 2017 and 2019, to drive significant cost savings. This programme began in the second half of 2017 and net costs incurred were £79m in 2017 and £102m in 2018 and relate to delivery of cost efficiencies in the enabling functions and the US Higher Education Courseware business together with further rationalisation of the property and supplier portfolio. The restructuring costs in 2018 relate predominantly to staff redundancies and the net cost of property rationalisation. Included in the property rationalisation in 2018 is the impact of the consolidation of the Group’s property footprint in London which resulted in a charge for onerous leases of £91m partially offset by profit from the sale of property of £81m. The costs of this restructuring programme are significant enough to exclude from the adjusted operating profit measure so as to better highlight the underlying performance (see note 4). In January 2016, the Group announced that it was embarking on a restructuring programme to simplify the business, reduce costs and position the Group for growth in its major markets. The costs of this programme of £338m in 2016 were significant enough to exclude from the adjusted operating profit measure so as to better highlight the underlying performance. These costs included costs associated with headcount reductions, property rationalisation and closure or exit from certain systems, platforms, products and supplier and customer relationships. Intangible charges: These represent charges in respect of intangible assets acquired through business combinations and the direct costs of acquiring those businesses. These charges are excluded as they reflect past acquisition activity and do not necessarily reflect the current year performance of the Group. Intangible amortisation charges in 2018 were £113m compared to a charge of £166m in 2017. In 2016, intangible charges included an impairment of goodwill in the Group’s North America business of £2,548m (see note 11). Other net gains and losses: These represent profits and losses on the sale of subsidiaries, joint ventures, associates and other financial assets and are excluded from adjusted operating profit as they distort the performance of the Group as reported on a statutory basis. Other net gains of £230m in 2018 relate to the sale of the Wall Street English language teaching business (WSE), realising a gain of £207m, the disposal of the Group’s equity interest in UTEL, the online University partnership in Mexico, realising a gain of £19m, and various other smaller disposal items for a net gain of £4m. Other net gains of £128m in 2017 relate to the sale of the test preparation business in China which resulted in a profit on sale of £44m and the part sale of the Group’s share in Penguin Random House which resulted in a profit of £96m and other smaller disposal items for a net loss of £12m (see note 31). In 2016, the net losses in the Core segment mainly relate to the closure of the Group’s English language schools in Germany and in the North America segment relate to the sale of the Pearson English Business Solutions business. UK pension GMP equalisation: In 2018, also excluded is the impact of adjustments arising from clarification of guaranteed minimum pension (GMP) equalisation legislation in the UK as this relates to historical circumstances (see note 25). Impact of US tax reform: In 2017, as a result of US tax reform, the Group’s share of profit from associates was adversely impacted by £8m. This amount was excluded from adjusted operating profit as it is considered to be a transition adjustment that is not expected to recur in the near future. Corporate costs are allocated to business segments on an appropriate basis depending on the nature of the cost and therefore the total segment result is equal to the Group operating profit. Segment assets, excluding corporate assets, consist of property, plant and equipment, intangible assets, inventories, receivables, deferred taxation and other financial assets and exclude cash and cash equivalents and derivative assets. Corporate assets comprise cash and cash equivalents, marketable securities and derivative financial instruments. Capital expenditure comprises additions to property, plant and equipment and software (see notes 10 and 11). Property, plant and equipment and intangible assets acquired through business combinations were £nil (2017: £nil) (see note 30). The Group operates in the following main geographic areas: Sales Non-current assets All figures in £ millions 2018 2017 2016 2018 2017 UK 377 384 393 900 796 Other European countries 246 262 255 143 128 US 2,627 2,770 2,829 2,162 2,247 Canada 126 126 118 250 240 Asia Pacific 455 643 632 146 151 Other countries 298 328 325 137 184 Total 4,129 4,513 4,552 3,738 3,746 Sales are allocated based on the country in which the customer is located. This does not differ materially from the location where the order is received. The geographical split of non-current Non-current |
Revenue from contracts with cus
Revenue from contracts with customers | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Revenue from contracts with customers | 3. Revenue from contracts with customers The following tables analyse the Group’s revenue streams. Courseware includes curriculum materials provided in book form and/or via access to digital content. Assessments includes test development, processing and scoring services provided to governments, educational institutions, corporations and professional bodies. Services includes the operation of schools, colleges and universities, including sistemas in Brazil as well as the provision of online learning services in partnership with universities and other academic institutions. 2018 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 378 172 127 677 Higher Education Courseware 1,042 87 57 1,186 English Courseware 16 58 102 176 1,436 317 286 2,039 Assessments School and Higher Education Assessments 332 247 23 602 Clinical Assessments 140 45 — 185 Professional and English Certification 344 150 64 558 816 442 87 1,345 Services School Services 288 2 47 337 Higher Education Services 244 40 29 313 English Services — 5 90 95 532 47 166 745 Total 2,784 806 539 4,129 2017 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 394 171 139 704 Higher Education Courseware 1,146 93 63 1,302 English Courseware 20 60 102 182 1,560 324 304 2,188 Assessments School and Higher Education Assessments 355 256 23 634 Clinical Assessments 146 46 — 192 Professional and English Certification 341 138 60 539 842 440 83 1,365 Services School Services 274 5 54 333 Higher Education Services 253 34 32 319 English Services — 12 296 308 527 51 382 960 Total 2,929 815 769 4,513 2016 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 418 173 127 718 Higher Education Courseware 1,147 92 60 1,299 English Courseware 21 65 97 183 1,586 330 284 2,200 Assessments School and Higher Education Assessments 378 268 21 667 Clinical Assessments 143 40 — 183 Professional and English Certification 333 112 49 494 854 420 70 1,344 Services School Services 259 6 54 319 Higher Education Services 269 29 46 344 English Services 13 18 314 345 541 53 414 1,008 Total 2,981 803 768 4,552 The Group derived revenue for the year to 31 December 2018 from the transfer of goods and services over time and at a point in time in the following major product lines: All figures in £ millions North Core Growth Total Courseware Products transferred at a point in time (sale or return) 718 313 197 1,228 Products transferred at a point in time (other) — — 35 35 Products and services transferred over time 718 4 54 776 1,436 317 286 2,039 Assessments Products transferred at a point in time 146 65 6 217 Products and services transferred over time 670 377 81 1,128 816 442 87 1,345 Services Products transferred at a point in time — 26 38 64 Products and services transferred over time 532 21 128 681 532 47 166 745 Total sales 2,784 806 539 4,129 a. Nature of goods and services The following is a description of the nature of the Group’s performance obligations within contracts with customers broken down by revenue stream, along with significant judgements and estimates made within each of those revenue streams. Courseware Revenue is generated from customers through the sales of print and digital courseware materials to schools, bookstores, and direct to individual learners. Goods and services may be sold separately or purchased together in bundled packages. The goods and services included in bundled arrangements are considered distinct performance obligations, except for where Pearson provides both a licence of intellectual property and an on-going The transaction price is allocated between distinct performance obligations on the basis of their relative standalone selling prices. In determining the transaction price, variable consideration exists in the form of discounts and anticipated returns. Discounts reduce the transaction price on a given transaction. A provision for anticipated returns is made based primarily on historical return rates, customer buying patterns and retailer behaviours including stock levels (see note 22). If these estimates do not reflect actual returns in future periods then revenues could be understated or overstated for a particular period. Variable consideration as described above is determined using the expected value approach. While payment for these goods and services generally occurs at the start of these arrangements, the length of time between payment and delivery of the performance obligations is generally short-term in nature or the reason for early payment relates to reasons other than financing, including customers securing a vendor in a longer-term arrangement or the transfer of goods or services is at the discretion of the customer. For these reasons and the use of the practical expedient on short-term financing, significant financing components are not recognised within Courseware transactions. Revenue from the sale of physical books is recognised at a point in time when control passes. This is generally at the point of shipment when title passes to the customer, when the Group has a present right to payment and the significant risks and rewards of ownership have passed to the customer. Revenue from physical books sold through the direct print rental method is recognised over the rental period, as the customer is simultaneously receiving and consuming the benefits of this rental service through the passage of time. Revenue from the sale of digital courseware products is recognised on a straight-line basis over the subscription period, unless hosted by a third-party or representative of a downloadable product, in which case Pearson has no on-going Revenue from the sale of ‘off-the-shelf’ Assessments Revenue is primarily generated from multi-year contractual arrangements related to large-scale assessment delivery, such as contracts to process qualifying tests for individual professions and government departments, and is recognised as performance occurs. Under these arrangements, while the agreement spans for multiple years, the contract duration has been determined to be each testing cycle based on contract structure, including clauses regarding termination. While in some cases the customer may have the ability to terminate during the term for convenience, significant financial or qualitative barriers exist limiting the potential for such terminations in the middle of a testing cycle. Within each testing cycle, a variety of service activities are performed such as test administration, delivery, scoring, reporting, item development, operational services, and programme management. While each of these service activities is capable of being distinct, they are not treated as distinct in the context of the customer contract as Pearson provides an integrated managed service offering and these activities are accounted for together as one comprehensive performance obligation. Within each testing cycle, the transaction price may contain both fixed and variable amounts. Variable consideration within these transactions primarily relates to expected testing volumes to be delivered in the cycle. The assumptions, risks and uncertainties inherent to long-term contract accounting can affect the amounts and timing of revenue and related expenses reported. Variable consideration is measured using the expected value method, except where amounts are contingent upon a future event’s occurrence, such as performance bonuses. Such event-driven contingency payments are measured using the most likely amount approach. To the extent a higher degree of uncertainty exists regarding variable consideration, these amounts are excluded from the transaction price and expensed when the uncertainty is reasonably removed. Customer payments are generally defined in the contract through a payment schedule, which may require customer acceptance for services rendered. Pearson has a history of providing satisfactory services which are accepted by the customer. While a delay between rendering of services and payment may exist, payment terms are within 12 months and the Group has elected to use the practical expedient available in IFRS 15 and not identify a significant financing component on these transactions. Revenue is recognised for Assessment contracts over time as the customer is benefiting as performance takes place through a continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contracts which may allow the customer to terminate for convenience, compensate us for work performed to date, and take possession of work in process. As control transfers over time, revenue is recognised based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgement and is based on the nature of the services provided. Revenue is recognised on a percentage completion basis calculated using the proportion of the total estimated costs incurred to date. Percentage of completion is used to recognise the transfer of control of services provided as these services are not provided evenly throughout the testing cycle and involve varying degrees of effort during the term. Losses on contracts are recognised in the period in which the loss first becomes foreseeable. Contract losses are determined to be the amount by which estimated total costs of the contract exceed the estimated total revenues that will be generated. In Assessments contracts driven primarily by transactions directly to end users, Pearson’s main obligation to the customer involves test delivery and scoring. Test delivery and scoring are defined as a single performance obligation delivered over time whether the test is subsequently manually scored or digitally scored on the day of the assessment. Customers may also purchase print and digital supplemental materials. Print products in this revenue stream are recognised at a point in time when control passes to the customer upon shipment. Recognition of digital revenue will occur based on the extent of Pearson’s on-going Services Revenue is primarily generated from multi-year contractual arrangements related to large-scale educational service delivery to academic institutions, such as schools and higher education universities. Under these arrangements, while an agreement may span for multiple years, the contract duration has been determined to be each academic period based on the structure of contracts, including clauses regarding termination. While in some cases the customer may have the ability to terminate during the term for convenience, significant financial or qualitative barriers exist limiting the potential for such terminations in the middle of an academic period. The academic period for this customer base is normally an academic year for schools and a semester for higher education universities. Within each academic period, while a variety of services are provided such as programme development, student acquisition, education technology and student support services. While each of these services is capable of being distinct, they are not distinct in the context of the customer contract as Pearson provides an integrated managed service offering and these activities are accounted for together as a comprehensive performance obligation. Where Services are provided to university customers, volumes and transaction price is fixed at the start of the semester. Where Services are provided to School customers, the transaction price may contain both fixed and variable amounts which require estimation during the academic period. Estimation is required where consideration is based upon average enrolments or other metrics which are not known at the start of the academic year. Variable consideration is measured using the expected value method. To the extent a higher degree of uncertainty exists regarding variable consideration, these amounts are excluded from the transaction price and recognised when the uncertainty is reasonably removed. Customer payments are generally defined in the contract as occurring shortly after invoicing. Where there is a longer payment term offered to a customer through a payment schedule, payment terms are within 12 months and the Group has elected to use the practical expedient available in IFRS 15 and not identify a significant financing component on these transactions. Revenue is recognised for Service contracts over time as the customer is benefiting as performance takes place through a continuous transfer of control to the customer. This continuous transfer of control to the customer is supported by clauses in the contracts which may allow the customer to terminate for convenience, compensate us for work performed to date, and take possession of work in process. As control transfers over time, revenue is recognised based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgement and is based on the nature of the products or services provided. Within the comprehensive service obligation, the timing of services occurs relatively evenly over each academic period and as such, time elapsed is used to recognise the transfer of control to the customer on a straight-line basis. Losses on contracts are recognised in the period in which the loss first becomes foreseeable. Contract losses are determined to be the amount by which estimated total costs of the contract exceed the estimated total revenues that will be generated. In cases of optional or add-on b. Disaggregation of revenue The tables in notes 2 and 3 show revenue from contracts with customers disaggregated by operating segment, geography and revenue stream. These disaggregation categories are appropriate as they represent the key groupings used in managing and evaluating underlying performance of each of the businesses. The categories also reflect groups of similar types of transactional characteristics, among similar customers, with similar accounting conclusions. c. Contract balances Transactions within the Courseware revenue stream generally entail customer billings at or near the contract’s inception and accordingly Courseware deferred income balances are primarily related to subscription performance obligations to be delivered over time. Transactions within the Assessments and Services revenue streams generally entail customer billings over time based on periodic intervals, progress towards milestones or enrolment census dates. As the performance obligations within these arrangements are delivered over time, the extent of accrued income or deferred income will ultimately depend upon the difference between revenue recognised and billings to date. Refer to note 22 for opening and closing balances of accrued income. Refer to note 24 for opening and closing balances of deferred income. Revenue recognised during the period from changes in deferred income was driven primarily by the release of revenue over time from digital subscriptions. d. Contract costs The Group capitalises incremental costs to obtain contracts with customers where it is expected these costs will be recoverable. Incremental costs to obtain contracts with customers are considered those which would not have been incurred if the contract had not been obtained. For the Group, these costs relate primarily to sales commissions. The Group has elected to use the practical expedient as allowable by IFRS 15 whereby such costs will be expensed as incurred where the expected amortisation period is one year or less. Where the amortisation period is greater than one year, these costs are amortised over the contract term on a systematic basis consistent with the transfer of the underlying goods and services within the contract to which these costs relate, which will generally be on a ratable basis. Impairment of capitalised contract costs was £nil in 2018. The Group does not recognise any material costs to fulfill contracts with customers as these types of activities are governed by other accounting standards. Refer to note 22 for further details of opening and closing balances of these costs reflected within deferred contract costs. e. Remaining transaction price The below table depicts the remaining transaction price on unsatisfied or partially unsatisfied performance obligations from contracts with customers as at 31 December 2018. Sales Deferred Committed Total remaining 2019 2020 2021 Courseware Products transferred at a point in time (sale or return) 1,228 1 — 1 1 — — Products transferred at a point in time (other) 35 — — — — — — Products and services transferred over time 776 679 8 687 272 131 284 Assessments Products transferred at a point in time 217 — — — — — — Products and services transferred over time 1,128 196 402 598 420 173 5 Services Products transferred at a point in time 64 — — — — — — Products and services transferred over time – subscriptions 310 17 — 17 13 3 1 Products and services transferred over time – other ongoing performance obligations 371 19 145 164 162 1 1 Total 4,129 912 555 1,467 868 308 291 Committed sales amounts are equal to the transaction price from contracts with customers excluding those amounts previously recognised as revenue and amounts currently recognised in deferred income. The total of committed sales and deferred income is equal to the remaining transaction price. Time bands represented above represent the expected timing of when the remaining transaction price will be recognised as revenue. |
Operating expenses
Operating expenses | 12 Months Ended |
Dec. 31, 2018 | |
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Operating expenses | 4. Operating expenses All figures in £ millions 2018 2017 2016 By function: Cost of goods sold 1,943 2,066 2,093 Operating expenses Distribution costs 88 84 88 Selling, marketing and product development costs 759 896 908 Administrative and other expenses 1,039 1,207 1,240 Restructuring costs 90 79 329 Other income (69 ) (64 ) (85 ) Total net operating expenses 1,907 2,202 2,480 Other net gains and losses (230 ) (128 ) 25 Impairment of intangible assets — — 2,548 Total 3,620 4,140 7,146 Included in other income is service fee income from Penguin Random House of £3m (2017: £3m, 2016: £4m). Included in administrative and other expenses are research and efficacy costs of £14m (2017: £14m, 2016: £23m). In addition to the restructuring costs shown above, there were major restructuring costs in relation to associates of £12m (2017: £nil, 2016: £9m). An analysis of major restructuring costs is as follows: All figures in £ millions 2018 2017 2016 By nature: Product costs 12 15 32 Employee costs 56 11 139 Depreciation and amortisation 1 13 29 Property and facilities (5 ) 24 43 Technology and communications 1 2 7 Professional and outsourced services 9 12 31 General and administrative costs 16 2 48 Total restructuring – operating expenses 90 79 329 Share of associate restructuring 12 — 9 Total 102 79 338 The 2017-2019 restructuring programme was announced in May 2017, began in the second half of 2017 and is expected to drive significant cost savings. The costs of this programme have been excluded from adjusted operating profit so as to better highlight the underlying performance. In 2018, property and facilities costs include gains on the disposal of properties sold as part of the restructuring programme. All figures in £ millions Notes 2018 2017 2016 By nature: Royalties expensed 236 246 264 Other product costs 516 564 616 Employee benefit expense 5 1,637 1,805 1,888 Contract labour 161 152 206 Employee-related expense 115 127 122 Promotional costs 233 229 217 Depreciation of property, plant and equipment 10 66 90 95 Amortisation of intangible assets – pre-publication 20 338 338 350 Amortisation of intangible assets – software 11 88 85 84 Amortisation of intangible assets – other 11 99 138 185 Impairment of intangible assets — — 2,548 Property and facilities 147 202 243 Technology and communications 192 218 188 Professional and outsourced services 396 322 378 Other general and administrative costs 85 140 140 Costs capitalised to intangible assets (390 ) (324 ) (318 ) Other net gains and losses (230 ) (128 ) 25 Other income (69 ) (64 ) (85 ) Total 3,620 4,140 7,146 During the year the Group obtained the following services from the Group’s auditors: All figures in £ millions 2018 2017 2016 The audit of parent company and consolidated financial statements 4 4 5 The audit of the company’s subsidiaries 2 2 2 Total audit fees 6 6 7 Audit-related and other assurance services 1 1 1 Other non-audit — 1 1 Total other services 1 2 2 Total non-audit 1 2 2 Total 7 8 9 Reconciliation between audit and non-audit All figures in £ millions 2018 2017 2016 Group audit fees including fees for attestation under section 404 of the Sarbanes-Oxley Act 6 6 7 Non-audit 1 2 2 Total 7 8 9 Fees for attestation under section 404 of the Sarbanes-Oxley Act are allocated between fees payable for the audits of consolidated and subsidiary accounts. Included in non-audit |
Employee information
Employee information | 12 Months Ended |
Dec. 31, 2018 | |
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Employee information | 5. Employee information All figures in £ millions Notes 2018 2017 2016 Employee benefit expense Wages and salaries (including termination costs) 1,421 1,567 1,661 Social security costs 112 130 124 Share-based payment costs 26 37 33 22 Retirement benefits – defined contribution plans 25 56 57 67 Retirement benefits – defined benefit plans 25 23 19 16 Other post-retirement medical benefits 25 (12 ) (1 ) (2 ) Total 1,637 1,805 1,888 The details of the emoluments of the Directors of Pearson plc are shown in the report on Directors’ remuneration. Average number employed 2018 2017 2016 Employee numbers North America 14,113 16,295 16,841 Core 5,192 5,291 5,664 Growth 4,521 8,268 9,868 Other 496 485 346 Total 24,322 30,339 32,719 |
Net finance costs
Net finance costs | 12 Months Ended |
Dec. 31, 2018 | |
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Net finance costs | 6. Net finance costs All figures in £ millions Notes 2018 2017 2016 Interest payable on financial liabilities at amortised cost and associated derivatives (42 ) (99 ) (74 ) Net foreign exchange losses (36 ) — (21 ) Finance costs associated with transactions (1 ) (6 ) — Derivatives not in a hedge relationship (7 ) (5 ) (2 ) Derivatives in a hedge relationship (5 ) — — Finance costs (91 ) (110 ) (97 ) Interest receivable on financial assets at amortised cost 18 20 15 Net finance income in respect of retirement benefits 25 11 3 11 Net foreign exchange gains — 44 1 Derivatives not in a hedge relationship 6 12 10 Derivatives in a hedge relationship 1 1 — Finance income 36 80 37 Net finance costs (55 ) (30 ) (60 ) Included in interest receivable is £1m (2017: £1m, 2016: £1m) of interest receivable from related parties. There was a net movement of £nil on fair value hedges in 2018 (2017: £1m, 2016: £nil), comprising a gain of £4m (2017: gain of £37m, 2016: loss of £4m) on the underlying bonds, offset by a loss of £4m (2017: loss of £36m, 2016: gain of £4m) on the related derivative financial instruments. |
Income tax
Income tax | 12 Months Ended |
Dec. 31, 2018 | |
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Income tax | 7. Income tax All figures in £ millions Notes 2018 2017 2016 Current tax Credit/(charge) in respect of current year 92 (121 ) (66 ) Adjustments in respect of prior years 34 (2 ) 27 Total current tax credit/(charge) 126 (123 ) (39 ) Deferred tax In respect of temporary differences (6 ) 96 277 Other adjustments in respect of prior years (28 ) 14 (16 ) Total deferred tax (charge)/credit 13 (34 ) 110 261 Total tax credit/(charge) 92 (13 ) 222 The adjustments in respect of prior years in both 2018 and 2017 primarily arise from revising the previous year’s reported tax provision to reflect the tax returns subsequently filed. This results in a change between deferred and current tax as well as an absolute benefit to the total tax charge. The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the UK tax rate as follows. All figures in £ millions 2018 2017 2016 Profit before tax 498 421 (2,557 ) Tax calculated at UK rate (2018: 19%, 2017: 19.25%, 2016: 20%) (94 ) (81 ) 511 Effect of overseas tax rates (28 ) 15 424 Joint venture and associate income reported net of tax 8 15 19 Intangible impairment not subject to tax — — (722 ) Intra-group financing benefit 25 26 34 Movement in provisions for tax uncertainties 111 49 (37 ) Impact of US tax reform — (1 ) — Net expense not subject to tax (29 ) (39 ) (8 ) Benefit from change in US tax accounting treatment 25 — — Gains and losses on sale of businesses not subject to tax 77 8 15 Utilisation of previously unrecognised tax losses and credits — (1 ) — Unrecognised tax losses (9 ) (16 ) (25 ) Adjustments in respect of prior years 6 12 11 Total tax credit/(charge) 92 (13 ) 222 UK 37 (36 ) 46 Overseas 55 23 176 Total tax credit/(charge) 92 (13 ) 222 Tax rate reflected in earnings (18.5 )% 3.1 % 8.7 % Included in net expense not subject to tax are foreign taxes not creditable, the tax impact of share-based payments and other expenses not deductible. Factors which may affect future tax charges include changes in tax legislation, transfer pricing regulations, the level and mix of profitability in different countries, and settlements with tax authorities. The movement in provisions for tax uncertainties primarily reflects releases due to the expiry of relevant statutes of limitation and the reassessment of historical tax positions. The current tax liability of £72m (2017: £231m) includes £181m (2017: £280m) of provisions for tax uncertainties principally in respect of a number of issues in the US, the UK and China. The issues provided for include the allocation between territories of proceeds of historical business disposals and the potential disallowance of intra-group recharges. The Group is currently under audit in a number of countries, and the timing of any resolution of these audits is uncertain. Of the balance of £181m, £57m relates to 2014 and earlier and is mostly under audit. In most countries tax years up to and including 2014 are now statute barred from examination by tax authorities. Of the remaining balance, £66m relates to 2015, £29m to 2016, £23m to 2017 and £6m to 2018. If relevant enquiry windows pass with no audit, management believes it is reasonably possible that provision levels will reduce by an estimated £50m within the next 12 months. However the tax authorities may take a different view from management and the final liability may be greater than provided. For items currently under audit if tax authorities are successful, liabilities could increase by £25m (2017: £25m). The tax benefit/(charge) recognised in other comprehensive income is as follows: All figures in £ millions 2018 2017 2016 Net exchange differences on translation of foreign operations (4 ) 9 (5 ) Fair value gain on other financial assets — (4 ) — Remeasurement of retirement benefit obligations 9 (42 ) 58 5 (37 ) 53 A tax charge of £4m (2017: £nil, 2016: £nil) relating to share-based payments has been recognised directly in equity. |
Earnings per share
Earnings per share | 12 Months Ended |
Dec. 31, 2018 | |
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Earnings per share | 8. Earnings per share Basic Basic earnings per share is calculated by dividing the profit attributable to equity shareholders of the company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the company and held as treasury shares. Diluted Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to take account of all dilutive potential ordinary shares and adjusting the profit attributable, if applicable, to account for any tax consequences that might arise from conversion of those shares. All figures in £ millions Notes 2018 2017 2016 Earnings/(loss) for the year from continuing operations 590 408 (2,335 ) Non-controlling (2 ) (2 ) (2 ) Earnings/(loss) attributable to equity holders of the company 588 406 (2,337 ) Weighted average number of shares (millions) 778.1 813.4 814.8 Effect of dilutive share options (millions) 0.6 0.3 — Weighted average number of shares (millions) for diluted earnings 778.7 813.7 814.8 Earnings/(loss) per share Basic 75.6p 49.9p (286.8)p Diluted 75.5p 49.9p (286.8)p |
Dividends
Dividends | 12 Months Ended |
Dec. 31, 2018 | |
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Dividends | 9. Dividends All figures in £ millions 2018 2017 2016 Final paid in respect of prior year 12.0p (2017: 34.0p, 2016: 34.0p) 93 277 277 Interim paid in respect of current year 5.5p (2017: 5.0p, 2016: 18.0p) 43 41 147 136 318 424 The Directors are proposing a final dividend in respect of the financial year ended 31 December 2018 of 13.0p per share which will absorb an estimated £102m of shareholders’ funds. It will be paid on 10 May 2019 to shareholders who are on the register of members on 5 April 2019. These financial statements do not reflect this dividend. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2018 | |
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Property, plant and equipment | 10. Property, plant and equipment All figures in £ millions Land and Plant and Assets in Total Cost At 1 January 2017 398 560 20 978 Exchange differences (20 ) (29 ) (2 ) (51 ) Additions 26 40 24 90 Disposals (13 ) (34 ) — (47 ) Disposal through business disposal (11 ) (5 ) — (16 ) Reclassifications 5 8 (13 ) — Transfer to intangible assets — (11 ) — (11 ) Transfer to assets classified as held for sale (55 ) (2 ) — (57 ) At 31 December 2017 330 527 29 886 Exchange differences 11 14 1 26 Additions 32 22 12 66 Disposals (75 ) (97 ) — (172 ) Reclassifications 19 (8 ) (11 ) — Transfer to intangible assets — — (11 ) (11 ) Transfer to intangible assets – pre-publication — — (2 ) (2 ) At 31 December 2018 317 458 18 793 All figures in £ millions Land and Plant and Assets in Total Depreciation At 1 January 2017 (229 ) (406 ) — (635 ) Exchange differences 12 23 — 35 Charge for the year (35 ) (55 ) — (90 ) Disposals 9 26 — 35 Disposal through business disposal 6 3 — 9 Transfer to assets classified as held for sale 40 1 — 41 At 31 December 2017 (197 ) (408 ) — (605 ) Exchange differences (5 ) (11 ) — (16 ) Charge for the year (20 ) (46 ) — (66 ) Disposals 34 97 — 131 Reclassifications (7 ) 7 — — At 31 December 2018 (195 ) (361 ) — (556 ) Carrying amounts At 1 January 2017 169 154 20 343 At 31 December 2017 133 119 29 281 At 31 December 2018 122 97 18 237 Depreciation expense of £18m (2017: £23m) has been included in the income statement in cost of goods sold and £48m (2017: £67m) in operating expenses. The Group leases certain equipment under a number of finance lease agreements. The net carrying amount of leased plant and equipment included within property, plant and equipment was £7m (2017: £9m). |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
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Intangible assets | 11. Intangible assets All figures in £ millions Goodwill Software Acquired Acquired Acquired Other Total Cost At 1 January 2017 2,341 798 974 353 211 600 5,277 Exchange differences (148 ) (46 ) (74 ) (26 ) (6 ) (50 ) (350 ) Additions – internal development — 133 — — — — 133 Additions – purchased — 17 — — — — 17 Disposals — (23 ) — — — — (23 ) Disposal through business disposal — (4 ) (9 ) (19 ) — (27 ) (59 ) Transfer from property, plant and equipment — 11 — — — — 11 Transfer to assets classified as held for sale (163 ) (4 ) (2 ) (27 ) (21 ) (34 ) (251 ) At 31 December 2017 2,030 882 889 281 184 489 4,755 Exchange differences 74 32 39 (2 ) — 1 144 Additions – internal development — 124 — — — — 124 Additions – purchased — 6 — — — — 6 Disposals — (94 ) (18 ) (12 ) — (33 ) (157 ) Disposal through business disposal — (2 ) — — — — (2 ) Transfer from property, plant and equipment — 11 — — — — 11 Transfer from assets classified as held for sale 7 — — — — — 7 At 31 December 2018 2,111 959 910 267 184 457 4,888 Amortisation At 1 January 2017 — (461 ) (555 ) (209 ) (198 ) (412 ) (1,835 ) Exchange differences — 30 43 13 4 36 126 Charge for the year — (85 ) (77 ) (18 ) (3 ) (40 ) (223 ) Disposals — 21 — — — — 21 Disposal through business disposal — 2 8 18 — 22 50 Transfer to assets classified as held for sale — — 1 16 19 34 70 At 31 December 2017 — (493 ) (580 ) (180 ) (178 ) (360 ) (1,791 ) Exchange differences — (23 ) (26 ) 1 2 (10 ) (56 ) Charge for the year — (88 ) (59 ) (14 ) (2 ) (24 ) (187 ) Disposals — 92 18 12 — 33 155 Disposal through business disposal — — — — — — — At 31 December 2018 — (512 ) (647 ) (181 ) (178 ) (361 ) (1,879 ) Carrying amounts At 1 January 2017 2,341 337 419 144 13 188 3,442 At 31 December 2017 2,030 389 309 101 6 129 2,964 At 31 December 2018 2,111 447 263 86 6 96 3,009 Goodwill The goodwill carrying value of £2,111m relates to acquisitions completed after 1 January 1998. Prior to 1 January 1998 all goodwill was written off to reserves on the date of acquisition. For acquisitions completed between 1 January 1998 and 31 December 2002, no value was ascribed to intangibles other than goodwill which was amortised over a period of up to 20 years. On adoption of IFRS on 1 January 2003, the Group chose not to restate the goodwill balance and at that date the balance was frozen (i.e. amortisation ceased). If goodwill had been restated, then a significant value would have been ascribed to other intangible assets, which would be subject to amortisation, and the carrying value of goodwill would be significantly lower. For acquisitions completed after 1 January 2003, value has been ascribed to other intangible assets which are amortised. Other intangible assets Other intangibles acquired include content, technology and software rights. Intangible assets are valued separately for each acquisition and the primary method of valuation used is the discounted cash flow method. The majority of acquired intangibles are amortised using an amortisation profile based on the projected cash flows underlying the acquisition date valuation of the intangible asset, which generally results in a larger proportion of amortisation being recognised in the early years of the asset’s life. The Group keeps the expected pattern of consumption under review. Amortisation of £18m (2017: £17m) is included in the income statement in cost of goods sold and £169m (2017: £206m) in operating expenses. The range of useful economic lives for each major class of intangible asset (excluding goodwill and software) is shown below: 2018 Class of intangible asset Useful economic life Acquired customer lists, contracts and relationships 3-20 years Acquired trademarks and brands 2-20 Acquired publishing rights 5-20 Other intangibles acquired 2-20 The expected amortisation profile of acquired intangible assets is shown below: 2018 All figures in £ millions One to Six to More than Total Class of intangible asset Acquired customer lists, contracts and relationships 187 66 10 263 Acquired trademarks and brands 49 27 10 86 Acquired publishing rights 5 1 — 6 Other intangibles acquired 77 19 — 96 Impairment tests for cash-generating units (CGUs) containing goodwill Impairment tests have been carried out where appropriate as described below. Goodwill was allocated to CGUs, or an aggregation of CGUs, where goodwill could not be reasonably allocated to individual business units. Impairment reviews were conducted on these CGUs (including Growth given the recent write down of goodwill). The recoverable amount for each unit exceeds its carrying value, therefore there is no impairment in 2018. The carrying value of the goodwill in each of the CGUs is summarised below: All figures in £ millions 2018 2017 North America 930 1,013 Core 701 641 Growth (includes Brazil, China, India and South Africa) — — Pearson VUE 480 376 Total 2,111 2,030 The recoverable amount of each aggregated CGU is based on fair value less costs of disposal. Goodwill is tested at least annually for impairment. Other than goodwill there are no intangible assets with indefinite lives. The goodwill is generally denominated in the currency of the relevant cash flows and therefore the impairment review is not materially sensitive to exchange rate fluctuations. Key assumptions For the purpose of estimating the fair value less costs of disposal of the CGUs, management has used an income approach based on present value techniques. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, management’s best estimate about future developments and market assumptions. The fair value less costs of disposal measurement is categorised as Level 3 on the fair value hierarchy. The key assumptions used by management in the fair value less costs of disposal calculations were: Discount rates post-tax Perpetuity growth rates The key assumptions used by management in setting the financial budgets for the initial five-year period were as follows: Forecast sales growth rates Operating profits Cash conversion Sensitivities Impairment testing for the year ended 31 December 2018 has identified the following CGUs, or groups of CGUs, as being sensitive to changes in assumptions. The table below shows the headroom at 31 December 2018 and the cumulative impact of changes in the assumptions used in calculating the fair value. All figures in £ millions Headroom at 1% increase in 5% decrease in annual 10% decrease in 1% decrease in Headroom/(impairment) North America 356 128 27 (301 ) 167 Core 210 67 84 (42 ) 83 Brazil 20 (8 ) 3 (14 ) (4 ) The above analysis is performed at the exchange rates used in the Group’s strategic planning process. CGU contribution excludes fixed costs and corporate overheads. The goodwill related to the Brazil CGU was fully impaired in prior years, and the intangibles related to the Brazil CGU are amortised over their useful economic life. 2016 impairment tests At the end of 2016, following trading in the final quarter of the year, it became clear that the underlying issues in the US higher education courseware business market were more severe than anticipated. These issues related to declining student enrolments, changes in buying patterns of students and correction of inventory levels by distributors and bookshops. As a result, in January 2017, strategic plans and estimates for future cash flows were revised and we determined during the goodwill impairment review that the fair value less costs of disposal of the North America CGU no longer supported the carrying value of this goodwill and as a consequence impaired goodwill by £2,548m. |
Investments in joint ventures a
Investments in joint ventures and associates | 12 Months Ended |
Dec. 31, 2018 | |
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Investments in joint ventures and associates | 12. Investments in joint ventures and associates The amounts recognised in the balance sheet are as follows: All figures in £ millions 2018 2017 Associates 392 395 Joint ventures — 3 Total 392 398 The amounts recognised in the income statement are as follows: All figures in £ millions 2018 2017 Associates 43 77 Joint ventures 1 1 Total 44 78 Investment in associates The Group has the following material associates: Principal place Ownership Nature of Measurement Penguin Random House Ltd UK/Global 25 % See below Equity Penguin Random House LLC US 25 % See below Equity On 1 July 2013, Penguin Random House was formed, upon the completion of an agreement between Pearson and Bertelsmann to merge their respective trade publishing companies, Penguin and Random House, with the parent companies owning 47% and 53% of the combined business respectively. On 5 October 2017, Pearson sold a 22% stake in Penguin Random House to Bertelsmann, retaining a 25% share. Pearson owns its 25% interest in Penguin Random House via 25% interests in each of the two entities listed in the table above. Despite the separate legal structures of the two Penguin Random House entities, Pearson regards Penguin Random House as one combined global business. Consequently, Pearson discloses Penguin Random House as one single operating segment and presents disclosures related to its interests in Penguin Random House on a combined basis. The shareholder agreement includes protective rights for Pearson as the minority shareholder, including rights to dividends. Management considers ownership percentage, Board composition and the additional protective rights, and exercises judgement to determine that Pearson has significant influence over Penguin Random House and Bertelsmann has the power to direct the relevant activities and therefore control. Following the transaction in 2017 the assessment of significant influence has not changed. Penguin Random House does not have a quoted market price. The summarised financial information of the material associate is detailed below: 2018 2017 All figures in £ millions Penguin Penguin Assets Non-current 1,043 1,048 Current assets 1,929 1,758 Liabilities Non-current (1,104 ) (859 ) Current liabilities (1,546 ) (1,579 ) Net assets 322 368 Sales 2,775 2,693 Profit for the year 185 171 Other comprehensive income/(expense) 13 (60 ) Total comprehensive income 198 111 Dividends received from associate in relation to profits 67 146 Re-capitalisation 50 312 The information above reflects the amounts presented in the financial statements of the associate, adjusted for fair value and similar adjustments. The tax on Penguin Random House LLC is settled by the partners. For the purposes of clear and consistent presentation, the tax has been shown in the associate line items in the consolidated income statement and consolidated balance sheet, recording the Group’s share of profit after tax consistently for the Penguin Random House associates. A reconciliation of the summarised financial information to the carrying value of the material associate is shown below: 2018 2017 All figures in £ millions Penguin Penguin Opening net assets 368 1,386 Exchange differences 18 (18 ) Profit for the year 185 171 Other comprehensive income/(expense) 13 (60 ) Dividends, net of tax paid (262 ) (1,167 ) Tax adjustments in relation to disposals — 56 Closing net assets 322 368 Share of net assets 80 92 Goodwill 307 296 Carrying value of associate 387 388 Information on other individually immaterial associates is detailed below: All figures in £ millions 2018 2017 (Loss)/profit for the year (3 ) 7 Total comprehensive (expense)/income (3 ) 7 Transactions with material associates From time to time the Group loans funds to Penguin Random House which are unsecured and interest is calculated based on market rates. The amount outstanding at 31 December 2018 was £nil (2017: £46m). The loans are provided under a working capital facility and fluctuate during the year. The loan outstanding at 31 December 2017 was repaid in its entirety in January 2018. The Group also has a current asset receivable of £17m (2017: £19m) from Penguin Random House and a current liability payable of £nil (2017: £3m) arising from the provision of services. Included in other income (note 4) is £3m (2017: £3m) of service fees. In addition, the Group received a further re-capitalisation Investment in joint ventures Information on joint ventures, all of which are individually immaterial, is detailed below: All figures in £ millions 2018 2017 Profit for the year 1 1 Total comprehensive income 1 1 Information on other individually immaterial associates is detailed below: All figures in £ millions 2018 2017 (Loss)/profit for the year (3 ) 7 Total comprehensive (expense)/income (3 ) 7 Transactions with material associates From time to time the Group loans funds to Penguin Random House which are unsecured and interest is calculated based on market rates. The amount outstanding at 31 December 2018 was £nil (2017: £46m). The loans are provided under a working capital facility and fluctuate during the year. The loan outstanding at 31 December 2017 was repaid in its entirety in January 2018. The Group also has a current asset receivable of £17m (2017: £19m) from Penguin Random House and a current liability payable of £nil (2017: £3m) arising from the provision of services. Included in other income (note 4) is £3m (2017: £3m) of service fees. In addition, the Group received a further re-capitalisation Investment in joint ventures Information on joint ventures, all of which are individually immaterial, is detailed below: All figures in £ millions 2018 2017 Profit for the year 1 1 Total comprehensive income 1 1 Information on other individually immaterial associates is detailed below: All figures in £ millions 2018 2017 (Loss)/profit for the year (3 ) 7 Total comprehensive (expense)/income (3 ) 7 Transactions with material associates From time to time the Group loans funds to Penguin Random House which are unsecured and interest is calculated based on market rates. The amount outstanding at 31 December 2018 was £nil (2017: £46m). The loans are provided under a working capital facility and fluctuate during the year. The loan outstanding at 31 December 2017 was repaid in its entirety in January 2018. The Group also has a current asset receivable of £17m (2017: £19m) from Penguin Random House and a current liability payable of £nil (2017: £3m) arising from the provision of services. Included in other income (note 4) is £3m (2017: £3m) of service fees. In addition, the Group received a further re-capitalisation Investment in joint ventures Information on joint ventures, all of which are individually immaterial, is detailed below: All figures in £ millions 2018 2017 Profit for the year 1 1 Total comprehensive income 1 1 |
Deferred income tax
Deferred income tax | 12 Months Ended |
Dec. 31, 2018 | |
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Deferred income tax | 13. Deferred income tax All figures in £ millions 2018 2017 Deferred income tax assets 60 95 Deferred income tax liabilities (136 ) (164 ) Net deferred income tax (76 ) (69 ) Substantially all of the deferred income tax assets are expected to be recovered after more than one year. Deferred income tax assets and liabilities shall be offset when there is a legally enforceable right to offset current income tax assets with current income tax liabilities and where the deferred income taxes relate to the same fiscal authority. At 31 December 2018, the Group has unrecognised deferred income tax assets of £31m (2017: £32m) in respect of UK losses, £28m (2017: £18m) in respect of US losses and approximately £90m (2017: £86m) in respect of losses in other territories. The UK losses are capital losses. The US losses relate to state taxes and therefore have expiry periods of between five and 20 years. Other deferred tax assets of £12m (2017: £12m) have not been recognised. Deferred tax assets of £43m (2017: £75m) have been recognised in countries that reported a tax loss in either the current or preceding year. The majority arises in Brazil in respect of tax deductible goodwill. It is considered more likely than not that there will be sufficient future taxable profits to realise these assets. The recognition of the deferred income tax assets is supported by management’s forecasts of the future profitability of the relevant countries. The movement in deferred income tax assets and liabilities during the year is as follows: All figures in £ millions Trading Returns Retirement Deferred Goodwill and Other Total Deferred income tax assets/(liabilities) At 1 January 2017 22 35 37 117 (295 ) 69 (15 ) Exchange differences (2 ) (3 ) (4 ) (8 ) 19 (8 ) (6 ) Income statement (charge)/benefit (11 ) 6 7 (9 ) 118 (1 ) 110 Disposal through business disposal — — — — — (3 ) (3 ) Tax benefit in other comprehensive income — — (84 ) — — (5 ) (89 ) Transfer to assets/(liabilities) classified as held for sale — (4 ) — (73 ) 3 8 (66 ) At 31 December 2017 9 34 (44 ) 27 (155 ) 60 (69 ) Adjustment on initial application of IFRS 15 (see note 1b) — — — 15 — 1 16 Adjustment on initial application of IFRS 9 (see note 1c) — — — — — 3 3 Exchange differences — 1 1 6 (16 ) (5 ) (13 ) Income statement (charge)/benefit 11 (4 ) (21 ) 20 (34 ) (14 ) (42 ) Disposal through business disposal — — — — — 16 16 Tax charge in other comprehensive income — — 9 — — — 9 Tax charge in equity — — — — — 4 4 At 31 December 2018 20 31 (55 ) 68 (205 ) 65 (76 ) Other deferred income tax items include temporary differences in respect of share-based payments, provisions, depreciation and royalty advances. In addition, £98m (2017: £68m asset and £2m liability) of deferred income tax assets are included in assets classified as held for sale with a charge of £8m in 2018 relating to assets and liabilities held for sale. |
Classification of financial ins
Classification of financial instruments | 12 Months Ended |
Dec. 31, 2018 | |
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Classification of financial instruments | 14. Classification of financial instruments The accounting classification of each class of the Group’s financial assets, and their carrying values, is as follows: 2018 2017 Fair value Amortised Fair value Amortised All figures in £ millions Notes FVOCI FVTPL Fair value Financial Total Available Derivatives Derivatives Loans and Total Investments in unlisted securities 15 93 — — — 93 77 — — — 77 Cash and cash equivalents 17 — — — 568 568 — — — 518 518 Cash and cash equivalents – within assets classified as held for sale 32 — — — — — — — — 127 127 Marketable securities — — — — — 8 — — — 8 Derivative financial instruments 16 — 4 64 — 68 — 3 137 — 140 Trade receivables 22 — — — 904 904 — — — 760 760 Trade receivables – within assets classified as held for sale — — — 49 49 — — — 22 22 Total financial assets 93 4 64 1,521 1,682 85 3 137 1,427 1,652 The carrying value of the Group’s financial assets is equal to, or approximately equal to, the market value. Following the adoption of IFRS 9 in 2018 the terminology used to describe financial assets has been changed (see note 1c). The accounting classification of each class of the Group’s financial liabilities, together with their carrying values and market values, is as follows: 2018 2017 Fair value Amortised Fair value Amortised All figures in £ millions Notes FVTPL Fair value Other Total Total Derivatives Derivatives Other Total Total Derivative financial instruments 16 — (59 ) — (59 ) (59 ) — (140 ) — (140 ) (140 ) Trade payables 24 — — (311 ) (311 ) (311 ) — — (265 ) (265 ) (265 ) Trade payables – within liabilities classified as held for sale — — (22 ) (22 ) (22 ) — — (20 ) (20 ) (20 ) Liability to purchase own shares 24 — — — — — — — (151 ) (151 ) (151 ) Bank loans and overdrafts 18 — — (43 ) (43 ) (43 ) — — (15 ) (15 ) (15 ) Other borrowings due within one year 18 — — (3 ) (3 ) (3 ) — — (4 ) (4 ) (4 ) Borrowings due after more than one year 18 — — (674 ) (674 ) (663 ) — — (1,066 ) (1,066 ) (1,070 ) Total financial liabilities — (59 ) (1,053 ) (1,112 ) (1,101 ) — (140 ) (1,521 ) (1,661 ) (1,665 ) Following the adoption of IFRS 9 in 2018 the terminology used to describe financial liabilities has been changed (see note 1c). Fair value measurement As shown above, the Group’s derivative assets and liabilities, unlisted securities and marketable securities are held at fair value. Financial instruments that are measured subsequently to initial recognition at fair value are grouped into levels 1 to 3, based on the degree to which the fair value is observable, as follows: Level 1 fair value measurements are those derived from unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 fair value measurements are those derived from inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). The Group’s derivative assets valued at £68m (2017: £140m) and derivative liabilities valued at £59m (2017: £140m) are classified as level 2. The Group’s marketable securities valued at £nil (2017: £8m) are classified as level 2. The Group’s investments in unlisted securities are valued at £93m (2017: £77m) and are classified as level 3. The following table analyses the movements in level 3 fair value remeasurements: 2018 2017 All figures in £ millions Investments Investments At beginning of year 77 65 Exchange differences 4 (4 ) Acquisition of investments 13 3 Fair value movements 7 13 Disposal of investments (8 ) — At end of year 93 77 The fair value of the investments in unlisted securities is determined by reference to the financial performance of the underlying asset, recent funding rounds and amounts realised on the sale of similar assets. |
Other financial assets
Other financial assets | 12 Months Ended |
Dec. 31, 2018 | |
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Other financial assets | 15. Other financial assets All figures in £ millions 2018 2017 At beginning of year 77 65 Exchange differences 4 (4 ) Acquisition of investments 13 3 Fair value movements 7 13 Disposal of investments (8 ) — At end of year 93 77 Other financial assets comprise unlisted securities of £93m (2017: £77m) that are classified at fair value through other comprehensive income (FVOCI). The assets, which are not held for trading, relate to the Group’s interests in new and innovative educational ventures across the world. These are strategic investments and the Group considers the classification as FVOCI to be more relevant. None of the investments are individually significant to the financial statements. In 2018, equities held at a fair value of £8m (2017: £nil) were disposed. The cumulative gain on disposal was £nil and £2m was recycled from the fair value reserve to retained earnings. |
Derivative financial instrument
Derivative financial instruments and hedge accounting | 12 Months Ended |
Dec. 31, 2018 | |
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Derivative financial instruments and hedge accounting | 16. Derivative financial instruments and hedge accounting The Group’s approach to the management of financial risks is set out in note 19. The Group’s outstanding derivative financial instruments are as follows: 2018 2017 All figures in £ millions Gross notional Assets Liabilities Gross notional Assets Liabilities Interest rate derivatives – in a fair value hedge relationship 404 13 — 799 23 — Interest rate derivatives – not in a hedge relationship 362 3 — 429 3 — Cross-currency rate derivatives – in a hedge relationship 577 51 (35 ) 1,522 114 (140 ) FX forwards and collars – in a hedge relationship 434 — (24 ) — — — Other derivatives – not in a hedge relationship 473 1 — — — — Total 2,250 68 (59 ) 2,750 140 (140 ) Analysed as expiring: In less than one year 771 1 (23 ) — — — Later than one year and not later than five years 795 22 (1 ) 1,638 65 (95 ) Later than five years 684 45 (35 ) 1,112 75 (45 ) Total 2,250 68 (59 ) 2,750 140 (140 ) The Group’s fixed rate USD debt is held as fixed rate instruments at amortised cost. The majority of the Group’s fixed rate euro debt is converted to a floating rate exposure using interest rate and cross-currency swaps. The Group receives interest under its euro debt related swap contracts to match the interest on the bonds (ranging from a receipt of 1.375% on its euro 2025 notes to 1.875% on its euro 2021 notes) and, in turn, pays either a floating US dollar or sterling variable rates of GBP Libor + 0.81% and US Libor + 1.36%. GBP and USD Interest rate swaps are subsequently used to fix an element of the interest charge. The all-in At the end of 2018, the currency split of the mark-to-market The Group’s portfolio of rate derivatives is diversified by maturity, counterparty and type. Natural offsets between transactions within the portfolio and the designation of certain derivatives as hedges significantly reduce the risk of income statement volatility. The sensitivity of the portfolio to changes in market rates is set out in note 19. Fair value hedges The group uses Interest Rate Swaps and Cross Currency Swaps as Fair value hedges of the Groups euro issued debt. Interest rate exposure arises from movements in the fair value of the Group’s euro debt attributable to movements in euro interest rates. The hedged risk is the change the euro bonds fair value attributable to interest rate movements. The hedged items are the Group’s euro bonds which are issued at a fixed rate. The hedging instruments are fixed to floating euro interest rate swaps where the Group receives fixed interest payments and pays three month Euribor. As the critical terms of the interest rate swaps match the bonds such there is an expectation that the value of the hedging instrument and the value of the hedged item move in the opposite direction as a result of movements in the zero coupon Euribor curve. The hedge ratio is 100%. Sources of hedge ineffectiveness are a reduction or modification in the hedged item or a material change in the credit risk of swap counterparties. A foreign currency exposure arises from foreign exchange fluctuations on translation of the Group’s euro debt into GBP. The hedged risk is the risk of changes in the GBPEUR spot rate that will result in changes in the value of the euro debt when translated into GBP. The hedged items are a portion of the Group’s euro bonds. The hedging instruments are floating to floating cross currency swaps which creates an exposure to euro strengthening against GBP within the hedge item. The final exchange on the cross currency swap creates an exposure to euro weakening against GBP. As the critical terms of the cross currency swap match the bonds there is an expectation that the value of the hedging instrument and the value of the hedged item move in the opposite direction as a result of movements in the EURGBP exchange rate. The hedge ratio is 100%. Sources of hedge ineffectiveness are a reduction or modification in the hedged item or a material change in the credit risk of swap counterparties. At December 2018, the Group held the following instruments to hedge exposures to changes in interest rates and foreign currency risk associated with borrowings. All figures in £ millions Carrying amount of Change in fair value of hedging Nominal amounts of hedging Interest rate risk Financial assets – derivative financial instruments 13 (7 ) 404 Currency risk Financial assets – derivative financial instruments 51 3 404 The amounts at the reporting date relating to items designated as hedge items were as follows: All figures in £ millions Carrying amount of Accumulated amount Change in fair value of Hedge Line item in profit or Interest rate risk Financial liabilities – borrowings (416 ) (9 ) 7 — n/a Currency risk Financial liabilities – borrowings (416 ) n/a (3 ) — n/a Hedge of net investment in a foreign operation A foreign currency exposure arises from the translation of the Group’s net investments in its subsidiaries which have USD and euro functional currencies. The hedged risk is the risk of changes in the GBPUSD and GBPEUR spot rates that will result in changes in the value of the group’s net investment in its USD and euro assets when translated into GBP. The hedged items are a portion of the Group’s assets which are denominated in USD and euro. The hedging instruments are debt and derivative financial instruments, including Cross Currency Swaps, FX Forwards and FX Collars which creates an exposure to USD and euro weakening against GBP. It is expected that the change in value of each of these items will mirror each other as there is a clear and direct economic relationship between the hedge and the hedged item in the hedge relationship. Hedge ineffectiveness would arise if the value of the hedged items fell below the value of the hedging instruments however this is unlikely as the value of the group’s assets denominated in USD and euro are significantly greater than the proposed net investment programme. The amounts related to items designated as hedging instruments were as follows. All figures in £ millions Carrying amount of Change in value of Nominal amounts of Hedging gains/(losses) Hedge ineffectiveness Financial liabilities – derivative financial instruments (59 ) (22 ) 607 (22 ) — Financial liabilities – borrowings (256 ) (10 ) (256 ) (10 ) — In addition to the above, £15m of hedging losses were recognised in OCI in relation to derivative financial instruments that matured during the year. Offsetting arrangements Derivative financial assets and liabilities subject to offsetting arrangements are as follows 2018 2017 All figures in £ millions Gross Gross Net derivative Gross Gross Net derivative Counterparties in an asset position 67 (44 ) 23 103 (78 ) 25 Counterparties in a liability position 1 (15 ) (14 ) 37 (62 ) (25 ) Total as presented in the balance sheet 68 (59 ) 9 140 (140 ) — All of the Group’s derivative financial instruments are subject to enforceable netting arrangements with individual counterparties, allowing net settlement in the event of default of either party. Offset arrangements in respect of cash balances are described in note 17. Counterparty exposure from all derivatives is managed, together with that from deposits and bank account balances, within credit limits that reflect published credit ratings and by reference to other market measures (e.g. market prices for credit default swaps) to ensure that there is no significant risk to any one counterparty. The Group has no material embedded derivatives that are required to be separately accounted for in accordance with IFRS 9 ‘Financial Instruments’. |
Cash and cash equivalents (excl
Cash and cash equivalents (excluding overdrafts) | 12 Months Ended |
Dec. 31, 2018 | |
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Cash and cash equivalents (excluding overdrafts) | 17. Cash and cash equivalents (excluding overdrafts) All figures in £ millions 2018 2017 Cash at bank and in hand 533 361 Short-term bank deposits 35 157 568 518 Cash at bank and in hand – within assets classified as held for sale — 127 568 645 Short-term bank deposits are invested with banks and earn interest at the prevailing short-term deposit rates. At the end of 2018, the currency split of cash and cash equivalents was US dollar 18% (2017: 36%), sterling 30% (2017: 8%), Canadian dollar 14% (2017: 2%), euro 6% (2017: 7%), renminbi 3% (2017: 20%) and other 29% (2017: 27%). At the end of 2017, a significant proportion of the renminbi cash related to assets held for sale. Cash and cash equivalents have fair values that approximate to their carrying value due to their short-term nature. Cash and cash equivalents include the following for the purpose of the cash flow statement: All figures in £ millions 2018 2017 Cash and cash equivalents 568 518 Cash and cash equivalents – within assets classified as held for sale — 127 Bank overdrafts (43 ) (15 ) 525 630 The Group has certain cash pooling arrangements in US dollars, sterling, euro and Canadian dollars where both the company and the bank have a legal right of offset. Offsetting amounts are presented gross in the balance sheet. Offset arrangements in respect of derivatives are shown in note 16. |
Financial liabilities - borrowi
Financial liabilities - borrowings | 12 Months Ended |
Dec. 31, 2018 | |
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Financial liabilities - borrowings | 18. Financial liabilities – borrowings The Group’s current and non-current All figures in £ millions 2018 2017 Non-current 1.875% euro notes 2021 (nominal amount €250m; 2017 nominal amount €500m) 233 463 3.75% US dollar notes 2022 (nominal amount $117m) 92 85 3.25% US dollar notes 2023 (nominal amount $94m) 74 69 1.375% euro notes 2025 (nominal amount €300m; nominal amount €500m) 273 445 Finance lease liabilities 2 4 674 1,066 Current Due within one year or on-demand: Bank loans and overdrafts 43 15 Finance lease liabilities 3 4 46 19 Total borrowings 720 1,085 Included in the non-current The maturities of the Group’s non-current All figures in £ millions 2018 2017 Between one and two years 1 3 Between two and five years 400 549 Over five years 273 514 674 1,066 The carrying amounts and market values of borrowings are as follows: 2018 2017 All figures in £ millions Effective Carrying Market Effective Carrying Market Bank loans and overdrafts n/a 43 43 n/a 15 15 1.875% euro notes 2021 2.04 % 233 233 2.04 % 463 467 3.75% US dollar notes 2022 3.94 % 92 91 3.94 % 85 87 3.25% US dollar notes 2023 3.36 % 74 71 3.36 % 69 67 1.375% euro notes 2025 1.44 % 273 266 1.44 % 445 445 Finance lease liabilities n/a 5 5 n/a 8 8 720 709 1,085 1,089 The market values stated above are based on clean market prices at the year end or, where these are not available, on the quoted market prices of comparable debt issued by other companies. The effective interest rates above relate to the underlying debt instruments. The carrying amounts of the Group’s borrowings before the effect of derivatives (see notes 16 and 19 for further information on the impact of derivatives) are denominated in the following currencies: All figures in £ millions 2018 2017 US dollar 188 172 Sterling 23 1 Euro 506 911 Other 3 1 720 1,085 The Group has $1.75bn (£1.4bn) of undrawn capacity on its committed borrowing facilities as at 31 December 2018 (2017: $1.75bn (£1.3bn) undrawn). In addition, there are a number of short-term facilities that are utilised in the normal course of business. All of the Group’s borrowings are unsecured. In respect of finance lease obligations, the rights to the leased asset revert to the lessor in the event of default. The maturity of the Group’s finance lease obligations is as follows: All figures in £ millions 2018 2017 Finance lease liabilities – minimum lease payments Not later than one year 3 4 Later than one year and not later than two years 1 3 Later than two years and not later than three years 1 1 Later than three years and not later than four years — — Later than four years and not later than five years — — Later than five years — — Future finance charges on finance leases — — Present value of finance lease liabilities 5 8 The present value of the Group’s finance lease obligations is as follows: All figures in £ millions 2018 2017 Not later than one year 3 4 Later than one year and not later than five years 2 4 Later than five years — — 5 8 The carrying amounts of the Group’s lease obligations approximate their fair value. |
Financial risk management
Financial risk management | 12 Months Ended |
Dec. 31, 2018 | |
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Financial risk management | 19. Financial risk management The Group’s approach to the management of financial risks together with sensitivity analyses of its financial instruments is set out below. Treasury policy Pearson’s treasury policies set out the group’s principles for addressing key financial risks including capital risk, liquidity risk, foreign exchange risk and interest rate risk and sets out measurable targets for each. The Audit Committee receive quarterly reports incorporating compliance with these measurable targets and review and approve the treasury policies annually. The treasury function is permitted to use derivatives where their use reduces a risk or allows a transaction to be undertaken more cost effectively. Derivatives permitted include swaps, forwards and collars to manage foreign exchange and interest rate risk, with foreign exchange swap and forward contracts the most commonly executed. Speculative transactions are not permitted. Capital risk The Group’s objectives when managing capital are: • To maintain a strong balance sheet and a solid investment grade rating; • To continue to invest in the business; • To have a sustainable and progressive dividend policy, and; • To return surplus cash to our shareholders where appropriate. The Group aims to maintain net debt at a level less than 1.5 times EBITDA before the adoption of IFRS 16 and less than 2.2 times EBITDA after the adoption of IFRS16. This is consistent with a solid investment grade rating (assuming no material deterioration in trading performance) and provides comfortable headroom against covenants. The Group is currently rated BBB (negative outlook) with Standard and Poor’s and Baa2 (stable outlook) with Moody’s. Net debt The Group’s net debt position is set out below: All figures in £ millions 2018 2017 Cash and cash equivalents 568 645 Marketable securities — 8 Derivative financial instruments 9 — Bank loans and overdrafts (43 ) (15 ) Bonds (672 ) (1,062 ) Finance lease liabilities (5 ) (8 ) Net debt (143 ) (432 ) Interest and foreign exchange rate management The Group’s principal currency exposure is to the US dollar which represents more than 60% of the Group’s sales. The Group’s long-term debt is primarily held in US dollars to provide a natural hedge of this exposure, which is achieved through issued US dollar debt or converting euro debt to US dollars using cross-currency swaps, forwards and collars. As at 31 December 2018, £617m of the Group’s debt is held at fixed rates (2017: £674m), with £103m held at floating rates (2017: £411m), partially offset by US dollar cash balances which attract floating rate interest. See note 16 for details of the Group’s hedging programme which addresses interest rate risk and foreign currency risk. Overseas profits are converted to sterling to satisfy sterling cash outflows such as dividends at the prevailing spot rate at the time of the transaction. To the extent the Group has sufficient sterling, US dollars may be held as dollar cash to provide a natural offset to the Group’s debt or to satisfy future US dollar cash outflows. The Group does not have significant cross border foreign exchange transactional exposures. As at 31 December 2018, the sensitivity of the carrying value of the Group’s financial instruments to fluctuations in interest rates and exchange rates is as follows: All figures in £ millions Carrying Impact of 1% Impact of 1% Impact of 10% Impact of 10% Investments in unlisted securities 93 — — (7 ) 9 Cash and cash equivalents 568 — — (36 ) 45 Derivative financial instruments 9 (3 ) 3 1 (1 ) Bonds (672 ) 17 (17 ) 61 (74 ) Other borrowings (48 ) — — 2 (3 ) Other net financial assets 620 — — (51 ) 62 Total financial instruments 570 14 (14 ) (30 ) 38 The table shows the sensitivities of the fair values of each class of financial instrument to an isolated change in either interest rates or foreign exchange rates. Other net financial assets comprises trade receivables less trade payables. A significant proportion of the movements shown above would impact equity rather than the income statement due to the location and functional currency of the entities in which they arise and the availability of net investment hedging. The Group’s income statement is reported at average rates for the year while the balance sheet is translated at the year-end year-end year-end Liquidity and re-financing The Group regularly reviews the level of cash and debt facilities required to fund its activities. This involves preparing a prudent cash flow forecast for the next three to five years, determining the level of debt facilities required to fund the business, planning for shareholder returns and repayments of maturing debt, and identifying an appropriate amount of headroom to provide a reserve against unexpected outflows. At 31 December 2018, the Group had cash of £0.5bn and an undrawn US dollar denominated revolving credit facility due 2021 of $1.75bn (£1.4bn). At 31 December 2017, the Group had cash of £0.6bn and an undrawn US dollar denominated revolving credit facility due 2021 of $1.75bn (£1.3bn). The $1.75bn facility contains interest cover and leverage covenants which the Group has complied with for the year ended 31 December 2018. The maturity of the carrying values of the Group’s borrowings and trade payables are set out in notes 18 and 24 respectively. At the end of 2018, the currency split of the Group’s trade payables was US dollar £178m, sterling £57m and other currencies £98m (2017: US dollar £137m, sterling £58m and other currencies £90m) . Trade payables are all due within one year (2017: all due within one year). The following table analyses the Group’s bonds and derivative assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Short dated derivative instruments have not been included in this table. The amounts disclosed in the table are the contractual undiscounted cash flows (including interest) and as such may differ from the amounts disclosed on the balance sheet. Analysed by maturity Analysed by currency All figures in £ millions Greater than Later than Five years Total USD GBP Other Total At 31 December 2018 Bonds 14 431 277 722 189 — 533 722 Rate derivatives – inflows (20 ) (288 ) (343 ) (651 ) (40 ) (167 ) (444 ) (651 ) Rate derivatives – outflows 23 289 341 653 254 390 9 653 FX forwards – inflows (251 ) (35 ) — (286 ) — (286 ) — (286 ) FX forwards – outflows 275 37 — 312 312 — — 312 Total 41 434 275 750 715 (63 ) 98 750 At 31 December 2017 Bonds 20 601 533 1,154 184 — 970 1,154 Rate derivatives – inflows (38 ) (975 ) (684 ) (1,697 ) (53 ) (751 ) (893 ) (1,697 ) Rate derivatives – outflows 48 1,060 667 1,775 1,003 751 21 1,775 FX forwards – inflows — — — — — — — — FX forwards – outflows — — — — — — — — Total 30 686 516 1,232 1,134 — 98 1,232 Financial counterparty and credit risk management Financial counterparty and credit risk arises from cash and cash equivalents, favourable derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables. Counterparty credit limits, which take published credit rating and other factors into account, are set to cover the Group’s total aggregate exposure to a single financial institution. The limits applicable to published credit rating bands are approved by the Chief Financial Officer within guidelines approved by the Board. Exposures and limits applicable to each financial institution are reviewed on a regular basis. Cash deposits and derivative transactions are made with approved counterparties up to pre-agreed non-investment For trade receivables and contract assets the Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, risk associated with the industry and country in which customers operate may also influence the credit risk. The credit quality of customers is assessed by taking into account financial position, past experience and other relevant factors. Individual credit limits are set for each customer based on internal ratings. The compliance with credit limits is regularly monitored by the Group. A default on a trade receivable is when the counterparty fails to make contractual payments within the stated payment terms. Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. The carrying amounts of financial assets, trade receivables and contract assets represent the maximum credit exposure. Trade receivables and contract assets are subject to impairment using the expected credit loss model. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected credit loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. See note 22 for further details about trade receivables and contract assets including movements in provisions for bad and doubtful debts. |
Intangible assets - pre-publica
Intangible assets - pre-publication | 12 Months Ended |
Dec. 31, 2018 | |
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Intangible assets - pre-publication | 20. Intangible assets – pre-publication All figures in £ millions 2018 2017 Cost At beginning of year 1,854 2,417 Exchange differences 70 (168 ) Additions 328 362 Disposal through business disposal — (1 ) Disposals (158 ) (248 ) Transfer from property, plant and equipment 2 — Transfer to assets classified as held for sale — (508 ) At end of year 2,096 1,854 Amortisation At beginning of year (1,113 ) (1,393 ) Exchange differences (53 ) 109 Charge for the year (271 ) (338 ) Disposals 158 248 Transfer to assets classified as held for sale — 261 At end of year (1,279 ) (1,113 ) Carrying amounts At end of year 817 741 Included in the above are pre-publication Amortisation is included in the income statement in cost of goods sold. In addition to the above £242m (2017: £247m) of pre-publication |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
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Inventories | 21. Inventories All figures in £ millions 2018 2017 Raw materials 5 4 Work in progress — 2 Finished goods 149 142 Returns asset 10 — 164 148 The cost of inventories recognised as an expense and included in the income statement in cost of goods sold amounted to £375m (2017: £324m). In 2018 £39m (2017: £38m) of inventory provisions was charged in the income statement. None of the inventory is pledged as security. Included within the inventory balance is the estimation of the right to receive goods from contracts with customers via returns (see note 1b). The value of the returns asset is measured at the carrying amount of the assets at the time of sale aligned to the Group’s normal inventory valuation methodology less any expected costs to recover the asset and any expected reduction in value. Impairment charges against the inventory returns asset are £nil in 2018. The returns asset all relates to finished goods. |
Trade and other receivables
Trade and other receivables | 12 Months Ended |
Dec. 31, 2018 | |
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Trade and other receivables | 22. Trade and other receivables All figures in £ millions 2018 2017 Current Trade receivables 874 739 Royalty advances 5 8 Prepayments 103 82 Deferred contract costs 1 — Accrued income 2 1 Other receivables 193 280 1,178 1,110 Non-current Trade receivables 30 21 Royalty advances 21 20 Prepayments 13 15 Deferred contract costs 1 — Accrued income 10 10 Other receivables 25 37 100 103 Accrued income represents contract assets which are unbilled amounts generally resulting from assessments and services revenue streams where revenue to be recognised over time has been recognised in excess of customer billings to date. Impairment charges on accrued income assets are £nil in 2018. The carrying value of the Group’s trade and other receivables approximates its fair value. Trade receivables are stated net of provisions for bad and doubtful debts. Trade and other receivables includes the impact of adoption of IFRS 15 in 2018 (see note 1b). This impact increased trade and other receivables as a result of the transfer of the sales return liability of £173m to trade and other liabilities that was previously netted in trade receivables. Comparatives have not been restated. The movements in the provision for bad and doubtful debts are as follows: All figures in £ millions 2018 2017 At beginning of year (116 ) (112 ) Adjustment on initial application of IFRS 9 (see note 1c) (12 ) — Exchange differences 2 7 Income statement movements (1 ) (38 ) Utilised 31 21 Disposal through business disposal — 1 Transfer to assets classified as held for sale — 5 At end of year (96 ) (116 ) Concentrations of credit risk with respect to trade receivables are limited due to the Group’s large number of customers, who are internationally dispersed. The ageing of the Group’s trade receivables is as follows: All figures in £ millions 2018 2017 Within due date 606 661 Up to three months past due date 172 187 Three to six months past due date 72 48 Six to nine months past due date 16 18 Nine to 12 months past due date 24 13 More than 12 months past due date 14 3 Total trade receivables 904 930 Less: sales return liability — (170 ) Net trade receivables 904 760 The Group reviews its bad debt provision at least twice a year following a detailed review of receivable balances and historical payment profiles. Management believes all the remaining receivable balances are fully recoverable. |
Provisions for other liabilitie
Provisions for other liabilities and charges | 12 Months Ended |
Dec. 31, 2018 | |
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Provisions for other liabilities and charges | 23. Provisions for other liabilities and charges All figures in £ millions Deferred Property Disposals Legal Total At 1 January 2018 45 3 11 21 80 Exchange differences 2 — — — 2 Charged to income statement — 103 — 3 106 Released to income statement — (2 ) — (5 ) (7 ) Utilised (5 ) (2 ) (5 ) (3 ) (15 ) Disposal through business disposal — — (1 ) — (1 ) At 31 December 2018 42 102 5 16 165 Analysis of provisions: 2018 All figures in £ millions Deferred Property Disposals Legal Total Current 6 2 5 7 20 Non-current 36 100 — 9 145 42 102 5 16 165 2017 Current 5 1 11 8 25 Non-current 40 2 — 13 55 45 3 11 21 80 Deferred consideration primarily relates to the formation of a venture in North America in 2011. The provision will be utilised over a number of years as payments are based on a royalty rate. The provision above represents management’s best estimate of the liability, however, the maximum that could be payable is £84m. Property provisions predominantly relate to restructuring and onerous leases. The main provisions relate to the consolidation of London properties and are expected to be utilised from 2020. Uncertainties around property provisions relate to prevailing market conditions including potential sublet income, lease terms including rent free periods, void periods, lease incentives and running costs. Disposals and closures include liabilities related to recent disposals and are expected to be utilised in 2019. Legal and other includes legal claims, contract disputes and potential contract losses with the provisions utilised as the cases are settled. Also included in legal and other are other restructuring provisions that are generally utilised within one year. |
Trade and other liabilities
Trade and other liabilities | 12 Months Ended |
Dec. 31, 2018 | |
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Trade and other liabilities | 24. Trade and other liabilities All figures in £ millions 2018 2017 Trade payables 311 265 Sales return liability 173 — Social security and other taxes 16 21 Accruals 397 447 Deferred income 387 322 Interest payable 46 45 Liability to purchase own shares — 151 Other liabilities 225 224 1,555 1,475 Less: non-current Accruals 15 26 Deferred income 66 35 Other liabilities 74 72 155 133 Current portion 1,400 1,342 The carrying value of the Group’s trade and other liabilities approximates its fair value. The deferred income balance comprises contract liabilities in respect of advance payments in assessment, testing and training businesses; subscription income in school and college businesses; and obligations to deliver digital content in future periods. Trade and other liabilities includes the impact of adoption of IFRS 15 in 2018 (see note 1b). This impact increased trade and other liabilities as a result of the transfer of the sales return liability of £173m that was previously netted in trade receivables and deferred income by £28m at 31 December 2018. Comparatives have not been restated. The liability to purchase own shares in 2017 relates to a buyback agreement for the purchase of the company’s own shares (see note 27). |
Retirement benefit and other po
Retirement benefit and other post-retirement obligations | 12 Months Ended |
Dec. 31, 2018 | |
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Retirement benefit and other post-retirement obligations | 25. Retirement benefit and other post-retirement obligations Background The Group operates a number of defined benefit and defined contribution retirement plans throughout the world. The largest plan is the Pearson Group Pension Plan (UK Group plan) in the UK, which is sectionalised to provide both defined benefit and defined contribution pension benefits. The defined benefit section was closed to new members from 1 November 2006. The defined contribution section, opened in 2003, is open to new and existing employees. Finally, there is a separate section within the UK Group plan set up for auto-enrolment. The defined benefit section of the UK Group plan is a final salary pension plan which provides benefits to members in the form of a guaranteed level of pension payable for life. The level of benefits depends on the length of service and final pensionable pay. The UK Group plan is funded with benefit payments from trustee-administered funds. The UK Group plan is administered in accordance with the Trust Deed and Rules in the interests of its beneficiaries by Pearson Group Pension Trustee Limited. A ruling in the Lloyds Bank High Court case in October 2018 provided clarity on how pension plans should equalise guaranteed minimum pensions (GMP) between males and females. The case ruling resulted in a past service charge in the income statement of £8m and an additional liability of £8m which has been incorporated into the valuation of the UK Group plan defined benefit obligation. This charge has been excluded from the Group’s adjusted earnings as this relates to historical circumstances. The charge is an estimate based on available data and revisions to these estimates in future years will be treated as assumption changes and recorded in other comprehensive income rather than the income statement. At 31 December 2018, the UK Group plan had approximately 24,000 members, analysed in the following table: All figures in % Active Deferred Pensioners Total Defined benefit 1 25 35 61 Defined contribution 9 30 — 39 Total 10 55 35 100 The other major defined benefit plans are based in the US. These are also final salary pension plans which provide benefits to members in the form of a guaranteed pension payable for life, with the level of benefits dependent on length of service and final pensionable pay. The majority of the US plans are funded. The Group also has several post-retirement medical benefit plans (PRMBs), principally in the US. PRMBs are unfunded but are accounted for and valued similarly to defined benefit pension plans. In 2018, changes made to the US PRMB have resulted in a curtailment gain of £11m being recognised in the income statement. The defined benefit schemes expose the Group to actuarial risks, such as life expectancy, inflation risks, and investment risk including asset volatility and changes in bond yields. The Group is not exposed to any unusual, entity-specific or plan-specific risks. The defined contribution section of the UK Group plan operates a Reference Scheme Test (RST) pension underpin for its members. Where a member’s fund value is insufficient to purchase the RST pension upon retirement, the UK Group plan is liable for the shortfall to cover the member’s RST pension. In 2017, the UK Group plan revised its approach to securing the RST underpin by converting a member’s fund value into a pension in the UK Group plan rather than purchasing an annuity with an insurer. A liability of £23m (2017: £32m) in respect of the underpin is included in the UK Group plan’s defined benefit obligation, calculated as the present value of projected payments less the fund value. The UK Group plan’s conversion factors are lower than the respective insurer annuity values and this drove a reduction in the underpin liability, resulting in an actuarial gain through other comprehensive income and an increase in the surplus at 31 December 2017. From 1 January 2018, members who have sufficient funds to purchase an RST pension are able to convert their fund value into a pension in the UK Group plan as an alternative to purchasing an annuity with an insurer. The Group does not recognise the assets and liabilities for members of the defined contribution section of the UK Group plan whose fund values are expected to be sufficient to purchase an RST pension without assistance from the UK Group plan. The defined contribution section of the UK Group plan had gross assets of £453m at 31 December 2018. Assumptions The principal assumptions used for the UK Group plan and the US PRMB are shown below. Weighted average assumptions have been shown for the other plans, which primarily relate to US pension plans. 2018 2017 2016 All figures in % UK Group Other PRMB UK Group Other PRMB UK Group Other PRMB Inflation 3.3 1.6 1.5 3.2 1.6 1.5 3.3 1.6 1.5 Rate used to discount plan liabilities 2.8 4.0 4.1 2.5 3.0 3.0 2.5 3.8 3.9 Expected rate of increase in salaries 3.8 2.9 3.0 3.7 3.0 3.0 3.8 3.0 3.0 Expected rate of increase for pensions in payment and deferred pensions 2.1 to 5.1 — — 2.1 to 5.1 — — 2.2 to 5.1 — — Initial rate of increase in healthcare rate — — 7.0 — — 6.5 — — 6.8 Ultimate rate of increase in healthcare rate — — 5.5 — — 5.0 — — 5.0 The UK discount rate is based on corporate bond yields adjusted to reflect the duration of liabilities. The US discount rate is set by reference to a US bond portfolio matching model. The inflation rate for the UK Group plan of 3.3% reflects the RPI rate. In line with changes to legislation in 2010, certain benefits have been calculated with reference to CPI as the inflationary measure and in these instances a rate of 2.3% has been used. The expected rate of increase in salaries has been set at 3.8% for 2018. For the UK Group plan, the mortality base table assumptions have been updated and are derived from the SAPS S2 for males and females, adjusted to reflect the observed experience of the plan, with CMI model improvement factors. A 1.5% long-term rate improvement on the CMI model is applied for both males and females. For the US plans, the mortality table (RP – 2018) and 2018 improvement scale (MP – 2018) with generational projection for male and female annuitants has been adopted. Using the above tables, the remaining average life expectancy in years of a pensioner retiring at age 65 on the balance sheet date for the UK Group plan and US plans is as follows: UK US All figures in years 2018 2017 2018 2017 Male 23.8 23.6 20.7 20.8 Female 24.5 25.7 22.7 22.8 The remaining average life expectancy in years of a pensioner retiring at age 65, 20 years after the balance sheet date, for the UK and US Group plans is as follows: UK US All figures in years 2018 2017 2018 2017 Male 25.4 25.7 22.3 22.5 Female 26.3 27.9 24.2 24.4 Although the Group anticipates that plan surpluses will be utilised during the life of the plan to address member benefits, the Group recognises its pension surplus in full in respect of the UK Group plan on the basis that it is management’s judgement that there are no substantive restrictions on the return of residual plan assets in the event of a winding up of the plan after all member obligations have been met. Financial statement information The amounts recognised in the income statement are as follows: 2018 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 7 2 9 56 (1 ) 64 Past service cost 8 — 8 — — 8 Curtailments — — — — (11 ) (11 ) Administration expenses 6 — 6 — — 6 Total operating expense 21 2 23 56 (12 ) 67 Interest on plan assets (82 ) (5 ) (87 ) — — (87 ) Interest on plan liabilities 68 6 74 — 2 76 Net finance (income)/expense (14 ) 1 (13 ) — 2 (11 ) Net income statement charge 7 3 10 56 (10 ) 56 2017 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 8 1 9 57 (1 ) 65 Administration expenses 9 1 10 — — 10 Total operating expense 17 2 19 57 (1 ) 75 Interest on plan assets (84 ) (5 ) (89 ) — — (89 ) Interest on plan liabilities 77 7 84 — 2 86 Net finance (income)/expense (7 ) 2 (5 ) — 2 (3 ) Net income statement charge 10 4 14 57 1 72 2016 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 8 2 10 67 — 77 Curtailments — — — — (2 ) (2 ) Administration expenses 6 — 6 — — 6 Total operating expense 14 2 16 67 (2 ) 81 Interest on plan assets (104 ) (6 ) (110 ) — — (110 ) Interest on plan liabilities 89 7 96 — 3 99 Net finance (income)/expense (15 ) 1 (14 ) — 3 (11 ) Net income statement charge (1 ) 3 2 67 1 70 The amounts recognised in the balance sheet are as follows: 2018 2017 All figures in £ millions UK Group Other funded Other Total UK Group Other funded Other Total Fair value of plan assets 3,240 141 — 3,381 3,337 155 — 3,492 Present value of defined benefit obligation (2,671 ) (158 ) (19 ) (2,848 ) (2,792 ) (161 ) (20 ) (2,973 ) Net pension asset/(liability) 569 (17 ) (19 ) 533 545 (6 ) (20 ) 519 Other post-retirement medical benefit obligation (49 ) (67 ) Other pension accruals (13 ) (11 ) Net retirement benefit asset 471 441 Analysed as: Retirement benefit assets 571 545 Retirement benefit obligations (100 ) (104 ) The following gains have been recognised in other comprehensive income: All figures in £ millions 2018 2017 2016 Amounts recognised for defined benefit plans 16 175 (277 ) Amounts recognised for post-retirement medical benefit plans 6 — 9 Total recognised in year 22 175 (268 ) The fair value of plan assets comprises the following: 2018 2017 All figures in % UK Group Other Total UK Group Other Total Insurance 28 1 29 29 — 29 Equities 1 1 2 1 1 2 Bonds — 2 2 — 3 3 Property 7 — 7 8 — 8 Pooled asset investment funds 44 — 44 44 — 44 Other 16 — 16 14 — 14 The plan assets do not include any of the Group’s own financial instruments, or any property occupied by the Group. The table below further disaggregates the plan assets into additional categories and those assets which have a quoted market price in an active market and those that do not: 2018 2017 All figures in % Quoted No quoted Quoted No quoted Insurance 29 — 29 — Non-UK — 2 — 2 Fixed-interest securities 2 — 3 — Property — 7 — 8 Pooled asset investment funds 44 — 44 — Other — 16 — 14 Total 75 25 76 24 The liquidity profile of the UK Group plan assets is as follows: All figures in % 2018 2017 Liquid – call <1 month 51 50 Less liquid – call 1–3 months — — Illiquid – call >3 months 49 50 Changes in the values of plan assets and liabilities of the retirement benefit plans are as follows: 2018 2017 All figures in £ millions UK Group Other Total UK Group Other Total Fair value of plan assets Opening fair value of plan assets 3,337 155 3,492 3,339 158 3,497 Exchange differences — 4 4 — (8 ) (8 ) Interest on plan assets 82 5 87 84 5 89 Return on plan assets excluding interest (45 ) (13 ) (58 ) (140 ) 10 (130 ) Contributions by employer 6 1 7 234 8 242 Benefits paid (140 ) (11 ) (151 ) (188 ) (18 ) (206 ) Other — — — 8 — 8 Closing fair value of plan assets 3,240 141 3,381 3,337 155 3,492 Present value of defined benefit obligation Opening defined benefit obligation (2,792 ) (181 ) (2,973 ) (3,181 ) (205 ) (3,386 ) Exchange differences — (3 ) (3 ) — 13 13 Current service cost (7 ) (2 ) (9 ) (8 ) (1 ) (9 ) Past service cost (8 ) — (8 ) — — — Administration expenses (6 ) — (6 ) (9 ) (1 ) (10 ) Interest on plan liabilities (68 ) (6 ) (74 ) (77 ) (7 ) (84 ) Actuarial gains/(losses) – experience (49 ) (2 ) (51 ) 126 6 132 Actuarial gains/(losses) – demographic (12 ) — (12 ) 133 1 134 Actuarial gains/(losses) – financial 131 6 137 44 (5 ) 39 Contributions by employee — — — — — — Other — — — (8 ) — (8 ) Benefits paid 140 11 151 188 18 206 Closing defined benefit obligation (2,671 ) (177 ) (2,848 ) (2,792 ) (181 ) (2,973 ) The weighted average duration of the defined benefit obligation is 16.1 years for the UK and 7.1 years for the US. Changes in the value of the US PRMB are as follows: All figures in £ millions 2018 2017 Opening defined benefit obligation (67 ) (77 ) Exchange differences (2 ) 5 Current service cost 1 1 Curtailments 11 — Interest on plan liabilities (2 ) (2 ) Actuarial gains/(losses) – experience 4 1 Actuarial gains/(losses) – demographic — 1 Actuarial gains/(losses) – financial 2 (2 ) Benefits paid 4 6 Closing defined benefit obligation (49 ) (67 ) Funding The UK Group plan is self-administered with the plan’s assets being held independently of the Group in trust. The trustee of the plan is required to act in the best interest of the plan’s beneficiaries. The most recent triennial actuarial valuation for funding purposes was completed as at 1 January 2018 and this valuation revealed a technical provisions funding surplus of £163m. The plan expects to be able to provide benefits (in accordance with the plan rules) with a very low level of reliance on future funding from the Group. Assets of the plan are divided into two elements: matching assets, which are assets that produce cash flows that can be expected to match the cash flows for a proportion of the membership, and include a liability-driven investment mandate (UK bonds, interest rate/inflation swaps and other derivative instruments), Pensioner buy-in In February 2019, the UK Group plan purchased a further pensioner buy-in buy-in buy-in Regular contributions to the plan in respect of the defined benefit sections are estimated to be £3m for 2019. Sensitivities The effect of a one percentage point increase and decrease in the discount rate on the defined benefit obligation and the total pension expense is as follows: 2018 All figures in £ millions 1% 1% Effect: (Decrease)/increase in defined benefit obligation – UK Group plan (386 ) 522 (Decrease)/increase in defined benefit obligation – US plan (11 ) 13 The effect of members living one year more or one year less on the defined benefit obligation is as follows: 2018 All figures in £ millions One year One year Effect: Increase/(decrease) in defined benefit obligation – UK Group plan 143 (138 ) Increase/(decrease) in defined benefit obligation – US plan 7 (8 ) The effect of a half percentage point increase and decrease in the inflation rate is as follows: 2018 All figures in £ millions 0.5% 0.5% Effect: Increase/(decrease) in defined benefit obligation – UK Group plan 129 (114 ) Increase/(decrease) in defined benefit obligation – US plan — — The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant, although in practice this is unlikely to occur and changes in some assumptions may be correlated. When calculating these sensitivities, the same method has been applied to calculate the defined benefit obligation as has been applied when calculating the liability recognised in the balance sheet. This methodology is the same as prior periods. |
Share-based payments
Share-based payments | 12 Months Ended |
Dec. 31, 2018 | |
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Share-based payments | 26. Share-based payments The Group recognised the following charges in the income statement in respect of its equity-settled share-based payment plans: All figures in £ millions 2018 2017 2016 Pearson plans 37 33 22 The Group operates the following equity-settled employee option and share plans: Worldwide Save for Shares Plan Save-As-You-Earn Employee Stock Purchase Plan six-month Long-Term Incentive Plan three-to non-market Management Incentive Plan non-market The number and weighted average exercise prices of share options granted under the Group’s plans are as follows: 2018 2017 Number of Weighted average Number of Weighted average Outstanding at beginning of year 2,981 6.84 2,978 8.14 Granted during the year 729 5.80 1,619 5.50 Exercised during the year (70 ) 6.57 (9 ) 7.00 Forfeited during the year (668 ) 7.58 (1,451 ) 8.04 Expired during the year (244 ) 8.19 (156 ) 9.09 Outstanding at end of year 2,728 5.76 2,981 6.84 Options exercisable at end of year 169 11.31 350 8.18 Options were exercised regularly throughout the year. The weighted average share price during the year was £8.45 (2017: £6.71). Early exercises arising from redundancy, retirement or death are treated as an acceleration of vesting and the Group therefore recognises in the income statement the amount that otherwise would have been recognised for services received over the remainder of the original vesting period. The options outstanding at the end of the year have weighted average remaining contractual lives and exercise prices as follows: 2018 2017 Range of exercise prices £ Number of Weighted average Number of Weighted average 5–10 2,553 2.29 2,697 2.52 >10 175 0.29 284 1.24 2,728 2.16 2,981 2.40 In 2018 and 2017, options were granted under the Worldwide Save for Shares Plan. The weighted average estimated fair value for the options granted was calculated using a Black–Scholes option pricing model. The weighted average estimated fair values and the inputs into the Black–Scholes model are as follows: 2018 2017 Fair value £ 1.88 £ 1.24 Weighted average share price £ 7.49 £ 6.83 Weighted average exercise price £ 5.80 £ 5.50 Expected volatility 35.78 % 34.75 % Expected life 3.7 years 3.7 years Risk-free rate 0.87 % 0.20 % Expected dividend yield 5.21 % 7.61 % Forfeiture rate 3.2 % 3.2 % The expected volatility is based on the historical volatility of the company’s share price over the previous three to seven years depending on the vesting term of the options. The following shares were granted under restricted share arrangements: 2018 2017 Number of Weighted average Number of Weighted average Long-Term Incentive Plan 2,907 7.55 6,453 6.61 Management Incentive Plan 2,035 7.45 — — The fair value of shares granted under the Long-Term Incentive Plan and the Management Incentive Plan that vest unconditionally is determined using the share price at the date of grant. The number of shares expected to vest is adjusted, based on historical experience, to account for potential forfeitures. Participants under the plan are entitled to dividends during the vesting period and therefore the share price is not discounted. Restricted shares with a market performance condition were valued by an independent actuary using a Monte Carlo model. Restricted shares with a non-market Non-market |
Share capital and share premium
Share capital and share premium | 12 Months Ended |
Dec. 31, 2018 | |
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Share capital and share premium | 27. Share capital and share premium Number of Share Share At 1 January 2017 822,127 205 2,597 Issue of ordinary shares – share option schemes 923 — 5 Purchase of own shares (20,996 ) (5 ) — At 31 December 2017 802,054 200 2,602 Issue of ordinary shares – share option schemes 864 1 5 Purchase of own shares (21,840 ) (6 ) — At 31 December 2018 781,078 195 2,607 The ordinary shares have a par value of 25p per share (2017: 25p per share). All issued shares are fully paid. All shares have the same rights. The £300m share buyback programme announced in October 2017 was completed on 16 February 2018. In 2017, the Group’s brokers purchased 21m shares at a value of £153m of which £149m had been cancelled at 31 December 2017. Cash payments of £149m had been made in respect of the purchases with the outstanding £4m settlement made at the beginning of January 2018. This £4m together with the remaining value of the buyback programme of £147m was recorded as a liability at 31 December 2017 (see note 24). A further 22m shares were purchased under the programme in 2018 (see note 37). The shares bought back have been cancelled and the nominal value of these shares transferred to a capital redemption reserve. The nominal value of shares cancelled at 31 December 2018 was £11m (2017: £5m). The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to shareholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt (see note 18), cash and cash equivalents (see note 17) and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group reviews its capital structure on a regular basis and will balance its overall capital structure through payments of dividends, new share issues as well as the issue of new debt or the redemption of existing debt in line with the financial risk policies outlined in note 19. |
Treasury shares
Treasury shares | 12 Months Ended |
Dec. 31, 2018 | |
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Treasury shares | 28. Treasury shares Pearson plc Number of £m At 1 January 2017 7,719 79 Purchase of treasury shares — — Release of treasury shares (1,725 ) (18 ) At 31 December 2017 5,994 61 Purchase of treasury shares — — Release of treasury shares (2,769 ) (28 ) At 31 December 2018 3,225 33 The Group holds Pearson plc shares in trust to satisfy its obligations under its restricted share plans (see note 26). These shares, representing 0.4% (2017: 0.8%) of called-up The nominal value of Pearson plc treasury shares amounts to £0.8m (2017: £1.5m). Dividends on treasury shares are waived. At 31 December 2018, the market value of Pearson plc treasury shares was £30m (2017: £44m). |
Other comprehensive income
Other comprehensive income | 12 Months Ended |
Dec. 31, 2018 | |
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Other comprehensive income | 29. Other comprehensive income 2018 Attributable to equity holders of the company Non- controlling Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign operations – Group — 91 — 91 — 91 Net exchange differences on translation of foreign operations – associates — (1 ) — (1 ) — (1 ) Currency translation adjustment disposed — (4 ) — (4 ) — (4 ) Attributable tax — — (4 ) (4 ) — (4 ) Items that are not reclassified to the income statement Fair value gain on other financial assets 8 — — 8 — 8 Attributable tax — — — — — — Remeasurement of retirement benefit obligations – Group — — 22 22 — 22 Remeasurement of retirement benefit obligations – associates — — 3 3 — 3 Attributable tax — — 9 9 — 9 Other comprehensive income/(expense) for the year 8 86 30 124 — 124 2017 Attributable to equity holders of the company Non- controlling Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign operations – Group — (158 ) — (158 ) — (158 ) Net exchange differences on translation of foreign operations – associates — (104 ) — (104 ) — (104 ) Currency translation adjustment disposed — (51 ) — (51 ) — (51 ) Attributable tax — — 9 9 — 9 Items that are not reclassified to the income statement Fair value gain on other financial assets 13 — — 13 — 13 Attributable tax — — (4 ) (4 ) — (4 ) Remeasurement of retirement benefit obligations – Group — — 175 175 — 175 Remeasurement of retirement benefit obligations – associates — — 7 7 — 7 Attributable tax — — (42 ) (42 ) — (42 ) Other comprehensive income/(expense) for the year 13 (313 ) 145 (155 ) — (155 ) 2016 Attributable to equity holders of the company Non- Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign — 909 — 909 1 910 Net exchange differences on translation of foreign — 3 — 3 — 3 Currency translation adjustment disposed — — — — — — Attributable tax — — (5 ) (5 ) — (5 ) Items that are not reclassified to the income statement Fair value gain on other financial assets — — — — — — Attributable tax — — — — — — Remeasurement of retirement benefit obligations – Group — — (268 ) (268 ) — (268 ) Remeasurement of retirement benefit obligations – associates — — (8 ) (8 ) — (8 ) Attributable tax — — 58 58 — 58 Other comprehensive income/(expense) for the year — 912 (223 ) 689 1 690 |
Business combinations
Business combinations | 12 Months Ended |
Dec. 31, 2018 | |
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Business combinations | 30. Business combinations There were no significant acquisitions in 2018 or 2017. There were no material adjustments to prior year acquisitions. The net cash outflow relating to acquisitions in the year is shown below. All figures in £ millions 2018 2017 2016 Cash flow on acquisitions Deferred payments for prior year acquisitions and other items (5 ) (11 ) (7 ) Cash – current year acquisitions — — (7 ) Acquisition costs and other acquisition liabilities paid — — (1 ) Net cash outflow (5 ) (11 ) (15 ) |
Disposals
Disposals | 12 Months Ended |
Dec. 31, 2018 | |
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Disposals | 31. Disposals In March 2018, the Group completed the sale of its Wall Street English language teaching business (WSE) resulting in a pre-tax 2018 2017 2016 All figures in £ millions Notes WSE UTEL Other Total Total Total Disposal of subsidiaries and associates Property, plant and equipment (17 ) — — (17 ) (7 ) (3 ) Intangible assets (15 ) — (2 ) (17 ) (9 ) — Investments in joint ventures and associates — (3 ) — (3 ) (352 ) — Net deferred income tax assets — — — — (3 ) (10 ) Intangible assets – pre-publication (8 ) — — (8 ) (1 ) (4 ) Inventories (1 ) — — (1 ) (2 ) — Trade and other receivables (30 ) — — (30 ) (16 ) (6 ) Current income tax receivable — — — — (5 ) — Cash and cash equivalents (excluding overdrafts) (119 ) — — (119 ) (13 ) (9 ) Net deferred income tax liabilities 16 — — 16 — — Trade and other liabilities 171 — 1 172 34 21 Provisions for other liabilities and charges 23 — — 1 1 — — Cumulative currency translation adjustment 29 4 — — 4 51 — Net (assets)/liabilities disposed 1 (3 ) — (2 ) (323 ) (11 ) Cash received 212 22 9 243 468 7 Deferred proceeds — — 2 2 — — Fair value of financial asset acquired — — 3 3 — — Costs (6 ) — (10 ) (16 ) (17 ) (16 ) Gain on disposal 207 19 4 230 128 (20 ) All figures in £ millions 2018 2017 2016 Cash flow from disposals Cash – current year disposals 243 468 11 Cash and cash equivalents disposed (119 ) (13 ) (9 ) Costs and other disposal liabilities paid (23 ) (25 ) (52 ) Net cash inflow 101 430 (50 ) Analysed as: Cash inflow/ from sale of subsidiaries 83 19 (54 ) Cash inflow from sale of joint ventures and associates 18 411 4 |
Held for sale
Held for sale | 12 Months Ended |
Dec. 31, 2018 | |
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Held for sale | 32. Held for sale Held for sale assets and liabilities in 2018 relate to the K12 school courseware business in the US (K12). Following the decision in 2017 to sell both the Wall Street English language teaching business (WSE) and the K12 business, the assets and liabilities of those businesses were classified as held for sale on the balance sheet at 31 December 2017. During 2018 WSE was sold and the K12 business remains on the balance sheet as a held for sale asset prior to the disposal announced in February 2019 (see note 37). 2018 2017 All figures in £ millions Notes Total Total Non-current Property, plant and equipment — 16 Intangible assets 168 181 Deferred income tax assets 98 68 Trade and other receivables 25 27 291 292 Current assets Intangible assets – pre-publication 242 247 Inventories 55 46 Trade and other receivables 60 48 Cash and cash equivalents (excluding overdrafts) 17 — 127 357 468 Assets classified as held for sale 648 760 Non-current Deferred income tax liabilities — (2 ) Other liabilities (371 ) (284 ) (371 ) (286 ) Current liabilities Trade and other liabilities (202 ) (302 ) (202 ) (302 ) Liabilities classified as held for sale (573 ) (588 ) Net assets classified as held for sale 75 172 Goodwill is allocated to the held for sale businesses on a relative fair value basis where these businesses form part of a larger cash generating unit (CGU). The goodwill allocated to the K12 business was reassessed at 31 December 2018. |
Cash generated from operations
Cash generated from operations | 12 Months Ended |
Dec. 31, 2018 | |
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Cash generated from operations | 33. Cash generated from operations All figures in £ millions Notes 2018 2017 2016 Profit 590 408 (2,335 ) Adjustments for: Income tax (92 ) 13 (222 ) Depreciation 10 66 90 95 Amortisation and impairment of acquired intangibles and goodwill 11 99 138 2,733 Amortisation of software 11 88 85 84 Net finance costs 6 55 30 60 Charges relating to GMP equalisation 8 — — Share of results of joint ventures and associates 12 (44 ) (78 ) (97 ) Profit on disposal of subsidiaries, associates, investments and fixed assets (315 ) (116 ) 40 Net foreign exchange adjustment from transactions 28 (26 ) 43 Share-based payment costs 26 37 33 22 Pre-publication (37 ) (35 ) (19 ) Inventories (10 ) 24 17 Trade and other receivables (15 ) 133 156 Trade and other liabilities 35 6 61 Retirement benefit obligations (9 ) (232 ) (106 ) Provisions for other liabilities and charges 63 (11 ) (10 ) Net cash generated from operations 547 462 522 Net cash generated from operations is translated at an exchange rate approximating the rate at the date of cash flow. The difference between this rate and the average rate used to translate profit gives rise to a currency adjustment in the reconciliation between net profit and net cash generated from operations. This adjustment reflects the timing difference between recognition of profit and the related cash receipts or payments. In the cash flow statement, proceeds from sale of property, plant and equipment comprise: All figures in £ millions 2018 2017 2016 Net book amount 41 12 9 Profit/(loss) on sale of property, plant and equipment 87 (12 ) (5 ) Proceeds from sale of property, plant and equipment 128 — 4 The movements in the Group’s current and non-current All figures in £ millions 2017 Financing Foreign Fair value 2018 Financial liabilities Non-current 1,066 (441 ) 10 8 643 Current borrowings 4 (1 ) 22 — 25 Total 1,070 (442 ) 32 8 668 2016 Financing Foreign Fair value 2017 Financial liabilities Non-current borrowings 2,517 (1,292 ) (149 ) (10 ) 1,066 Current borrowings 9 (7 ) (1 ) 3 4 Total 2,526 (1,299 ) (150 ) (7 ) 1,070 2015 Financing Foreign Fair value 2016 Financial liabilities Non-current borrowings 2,106 (3 ) 416 (2 ) 2,517 Current borrowings 247 (248 ) 5 5 9 Total 2,353 (251 ) 421 3 2,526 Non-current |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
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Contingencies | 34. Contingencies There are contingent Group liabilities that arise in the normal course of business in respect of indemnities, warranties and guarantees in relation to former subsidiaries and in respect of guarantees in relation to subsidiaries, joint ventures and associates. In addition, there are contingent liabilities of the Group in respect of unsettled or disputed tax liabilities, legal claims, contract disputes, royalties, copyright fees, permissions and other rights. None of these claims are expected to result in a material gain or loss to the Group. As previously reported, on 24 November 2017 the European Commission published an opening decision that the United Kingdom controlled foreign company group financing partial exemption (“FCPE”) constitutes State Aid. A press release on the final decision was published on 2 April 2019, stating that the FCPE is partly justified. The full decision has not yet been published. The Group has benefited from the FCPE in 2018 and prior years by approximately £116m. The Group is in the process of assessing the impact of the decision. No provision is currently recorded. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
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Commitments | 35. Commitments At the balance sheet date there were no commitments for capital expenditure contracted for but not yet incurred. The Group leases various offices and warehouses under non-cancellable The future aggregate minimum lease payments in respect of operating leases are as follows: All figures in £ millions 2018 2017 Not later than one year 143 156 Later than one year and not later than two years 130 139 Later than two years and not later than three years 115 121 Later than three years and not later than four years 101 100 Later than four years and not later than five years 91 86 Later than five years 595 599 1,175 1,201 In the event that the Group has excess capacity in its leased offices and warehouses it will enter into sub-lease sub-lease non-cancellable sub-leases All figures in £ millions 2018 2017 Not later than one year 51 45 Later than one year and not later than two years 44 45 Later than two years and not later than three years 41 40 Later than three years and not later than four years 39 35 Later than four years and not later than five years 35 33 Later than five years 124 138 334 336 |
Related party transactions
Related party transactions | 12 Months Ended |
Dec. 31, 2018 | |
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Related party transactions | 36. Related party transactions Joint ventures and associates Amounts advanced to joint ventures and associates during the year and at the balance sheet date are set out in note 12. Key management personnel Key management personnel are deemed to be the members of the Pearson executive. It is this Committee which had responsibility for planning, directing and controlling the activities of the Group in 2018. Key management personnel compensation is disclosed below: All figures in £ millions 2018 2017 Short-term employee benefits 6 12 Retirement benefits 1 1 Share-based payment costs 7 2 Total 14 15 There were no other material related party transactions. No guarantees have been provided to related parties. |
Events after the balance sheet
Events after the balance sheet date | 12 Months Ended |
Dec. 31, 2018 | |
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Events after the balance sheet date | 37. Events after the balance sheet date On 29 March 2019, the Group completed the sale of the US K12 courseware business to Nexus Capital Management LP for headline consideration of $250m comprising an initial cash payment of $25m and an unconditional vendor note for $225m expected to be repaid in three to seven years. Following the repayment of the vendor note, the Group is entitled to 20% of all future cash flows to equity holders and 20% of net proceeds if the business is sold. In February 2019, the UK Group pension plan purchased a further pensioner buy-in buy-in buy-in In March 2019, the Group executed market tenders to repurchase €55m of its €500m 1.875% notes due 2021 of which €250m were outstanding at 31 December 2018. In addition, the Group also announced the refinancing of its bank facility, reducing its size to $1.19bn and extending its maturity date to February 2024. |
Accounting policies (Policies)
Accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Statement [LineItems] | |
Basis of preparation | Basis of preparation These consolidated financial statements have been prepared on the going concern basis and in accordance with International Financial Reporting Standards (IFRS) and IFRS Interpretations Committee (IFRS IC) interpretations as issued by the IASB and in conformity with IFRS as adopted by the European Union (EU). These consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of financial assets and liabilities (including derivative financial instruments) at fair value. These accounting policies have been consistently applied to all years presented, unless otherwise stated. 1. Interpretations and amendments to published standards effective 2018 • IFRS 15 Revenue from Contracts with Customers • IFRS 9 Financial Instruments The impact of the adoption of these new standards is set out in notes 1b and 1c. A number of other new pronouncements are also effective from 1 January 2018 but they do not have a material impact on the consolidated financial statements. Additional disclosure has been given where relevant. 2. Standards, interpretations and amendments to published standards that are not yet effective IFRS 16 ‘Leases’, effective for annual reporting periods beginning on or after 1 January 2019. The Group will apply IFRS 16 on 1 January 2019 using the modified retrospective approach. Under this approach, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained earnings on 1 January 2019, with no restatement of comparative information. IFRS 16 requires lessees to recognise right-of-use The Group has assessed the impact of adopting IFRS 16 with reference to its existing lease portfolio. The most significant part of the portfolio is property leases, amounting to approximately 750, together with a number of low value vehicle and equipment leases. The lease liability has been measured at the present value of the remaining lease payments, discounted using the incremental borrowing rate at transition. The right-of-use right-of-use Adoption of the new standard will have a material impact on the Group. It is estimated that on transition the lease liability to be brought on balance sheet will be around £910m with the corresponding right-of-use In June 2015, the IASB issued an exposure draft ED/2015/5 ‘Remeasurement on a Plan Amendment, Curtailment or Settlement/ Availability of a Refund from a Defined benefit Plan (Proposed Amendments to IAS 19 and IFRIC 14)’. The proposed amendments to IFRIC 14, which may have restricted the Group’s ability to recognise a pension asset in respect of pension surpluses in its UK defined benefit plan, are currently on hold with the IASB. A number of other new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 January 2019, and have not been applied in preparing these financial statements. None of these is expected to have a material impact on the consolidated financial statements. 3. Critical accounting assumptions and judgements Intangible assets: Goodwill Intangible assets: Pre-publication Taxation Revenue recognition including provisions for returns Employee benefits: Pensions Provisions: Onerous leases |
Consolidation | Consolidation 1. Business combinations The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interest issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred in the operating expenses line of the income statement. Identifiable assets acquired and identifiable liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The determination of fair values often requires significant judgements and the use of estimates, and, for material acquisitions, the fair value of the acquired intangible assets is determined by an independent valuer. The excess of the consideration transferred, the amount of any non-controlling See the ‘Intangible assets’ policy for the accounting policy on goodwill. If this is less than the fair value of the net assets of the subsidiary acquired, in the case of a bargain purchase, the difference is recognised directly in the income statement. On an acquisition-by-acquisition non-controlling non-controlling IFRS 3 ‘Business Combinations’ has not been applied retrospectively to business combinations before the date of transition to IFRS. Management exercises judgement in determining the classification of its investments in its businesses, in line with the following: 2. Subsidiaries 3. Transactions with non-controlling non-controlling non-controlling non-controlling 4. Joint ventures and associates The Group’s share of its joint ventures’ and associates’ post-acquisition profits or losses is recognised in the income statement and its share of post-acquisition movements in reserves is recognised in reserves. The Group’s share of its joint ventures’ and associates’ results is recognised as a component of operating profit as these operations form part of the core publishing business of the Group and are an integral part of existing wholly-owned businesses. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in a joint venture or associate equals or exceeds its interest in the joint venture or associate, the Group does not recognise further losses unless the Group has incurred obligations or made payments on behalf of the joint venture or associate. Unrealised gains and losses on transactions between the Group and its joint ventures and associates are eliminated to the extent of the Group’s interest in these entities. 5. Contribution of a subsidiary to an associate or joint venture |
Foreign currency translation | Foreign currency translation 1. Functional and presentation currency 2. Transactions and balances year-end 3. Group companies i) Assets and liabilities are translated at the closing rate at the date of the balance sheet ii) Income and expenses are translated at average exchange rates iii) All resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. The Group treats specific inter-company loan balances, which are not intended to be repaid in the foreseeable future, as part of its net investment. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. The principal overseas currency for the Group is the US dollar. The average rate for the year against sterling was $1.34 (2017: $1.30) and the year-end |
Property, plant and equipment | Property, plant and equipment Property, plant and equipment are stated at historical cost less depreciation. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for intended use. Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost less their residual values over their estimated useful lives as follows: Buildings (freehold): 20 – 50 years Buildings (leasehold): over the period of the lease Plant and equipment: 3 – 10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. The carrying value of an asset is written down to its recoverable amount if the carrying value of the asset is greater than its estimated recoverable amount. |
Intangible assets | Intangible assets 1. Goodwill non-controlling Goodwill is tested at least annually for impairment and carried at cost less accumulated impairment losses. An impairment loss is recognised to the extent that the carrying value of goodwill exceeds the recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. These calculations require the use of estimates in respect of forecast cash flows and discount rates and significant management judgement in respect of CGU and cost allocation. A description of the key assumptions and sensitivities is included in note 11. Goodwill is allocated to aggregated cash-generating units for the purpose of impairment testing. The allocation is made to those aggregated cash-generating units that are expected to benefit from the business combination in which the goodwill arose. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. 2. Acquired software 3. Internally developed software 4. Acquired intangible assets 5. Pre-publication Pre-publication Pre-publication The assessment of the useful economic life and the recoverability of pre-publication Reviews are performed regularly to estimate recoverability of pre-publication pre-publication The investment in pre-publication |
Other financial assets | Other financial assets Other financial assets are non-derivative Marketable securities and cash deposits with maturities of greater than three months are classified and subsequently measured at fair value through profit and loss. They are remeasured at each balance sheet date by using market data and the use of established valuation techniques. Any movement in the fair value is immediately recognised in finance income or finance costs in the income statement. Investments in the equity instruments of other entities are classified and subsequently measured at fair value through other comprehensive income. Changes in fair value are recorded in equity in the fair value reserve via other comprehensive income. On subsequent disposal of the asset, the net fair value gains or losses are reclassified from the fair value reserve to retained earnings. Any dividends received from equity investments classified as fair value through other comprehensive income are recognised in the P&L unless they represent a return of capital. |
Inventories | Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method or an approximation thereof, such as the first in first out (FIFO) method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale. Provisions are made for slow-moving and obsolete stock. |
Royalty advances | Royalty advances Advances of royalties to authors are included within trade and other receivables when the advance is paid less any provision required to adjust the advance to its net realisable value. The realisable value of royalty advances relies on a degree of management estimation in determining the profitability of individual author contracts. If the estimated realisable value of author contracts is overstated, this will have an adverse effect on operating profits as these excess amounts will be written off. The recoverability of royalty advances is based upon an annual detailed management review of the age of the advance, the future sales projections for new authors and prior sales history of repeat authors. The royalty advance is expensed at the contracted or effective royalty rate as the related revenues are earned. Royalty advances which will be consumed within one year are held in current assets. Royalty advances which will be consumed after one year are held in non-current |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents in the cash flow statement include cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included in borrowings in current liabilities in the balance sheet. Short-term deposits and marketable securities with maturities of greater than three months do not qualify as cash and cash equivalents and are reported as financial assets. Movements on these financial assets are classified as cash flows from financing activities in the cash flow statement where these amounts are used to offset the borrowings of the Group or as cash flows from investing activities where these amounts are held to generate an investment return. |
Share capital | Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where any Group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs, net of income taxes, is deducted from equity attributable to the company’s equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders. Ordinary shares purchased under a buyback programme are cancelled and the nominal value of the shares is transferred to a capital redemption reserve. |
Borrowings | Borrowings Borrowings are recognised initially at fair value, which is proceeds received net of transaction costs incurred. Borrowings are subsequently stated at amortised cost with any difference between the proceeds (net of transaction costs) and the redemption value being recognised in the income statement over the period of the borrowings using the effective interest method. Accrued interest is included as part of borrowings. Where a debt instrument is in a fair value hedging relationship, an adjustment is made to its carrying value in the income statement to reflect the hedged risk. Where a debt instrument is in a net investment hedge relationship gains and losses on the effective portion of the hedge are recognised in other comprehensive income. |
Derivative financial instruments | Derivative financial instruments Derivatives are recognised at fair value and remeasured at each balance sheet date. The fair value of derivatives is determined by using market data and the use of established estimation techniques such as discounted cash flow and option valuation models. For derivatives in a hedge relationship, the currency basis spread is excluded from the designation as a hedging instrument and is separately accounted for as a cost of hedging, which is recognised in equity in a cost of hedging reserve. Changes in the fair value of derivatives are recognised immediately in finance income or costs. However, derivatives relating to borrowings and certain foreign exchange contracts are designated as part of a hedging transaction. The accounting treatment is summarised as follows: Typical reason for designation Reporting of gains and losses on Reporting of gains and Net investment hedge The derivative creates a foreign currency liability which is used to hedge changes in the value of a subsidiary which transacts in that currency. Recognised in other comprehensive income. On disposal, the accumulated value of gains and losses reported in other comprehensive income is transferred to the income statement. Fair value hedges The derivative transforms the interest profile on debt from fixed rate to floating rate. Changes in the value of the debt as a result of changes in interest rates are offset by equal and opposite changes in the value of the derivative. When the Group’s debt is swapped to floating rates, the contracts used are designated as fair value hedges. Gains and losses on the derivative are reported in finance income or finance costs. However, an equal and opposite change is made to the carrying value of the debt (a ‘fair value adjustment’) with the benefit/cost reported in finance income or finance costs. The net result should be a zero charge on a perfectly effective hedge. If the debt and derivative are disposed of, the value of the derivative and the debt (including the fair value adjustment) are reset to zero. Any resultant gain or loss is recognised in finance income or finance costs. Non-hedge These are not designated as hedging instruments. Typically these are short-term contracts to convert debt back to fixed rates or foreign exchange contracts where a natural offset exists. No hedge accounting applies. |
Taxation | Taxation Current tax is recognised at the amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax is provided, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts. Deferred income tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax is provided in respect of the undistributed earnings of subsidiaries, associates and joint ventures other than where it is intended that those undistributed earnings will not be remitted in the foreseeable future. Current and deferred tax are recognised in the income statement, except when the tax relates to items charged or credited directly to equity or other comprehensive income, in which case the tax is also recognised in equity or other comprehensive income. The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the estimates in relation to the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises tax provisions when it is considered probable that there will be a future outflow of funds to a tax authority. The provisions are based on management’s best judgement of the application of tax legislation and best estimates of future settlement amounts (see note 7). Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. Deferred tax assets and liabilities require management judgement and estimation in determining the amounts to be recognised. In particular, when assessing the extent to which deferred tax assets should be recognised, significant judgement is used when considering the timing of the recognition and estimation is used to determine the level of future taxable income together with any future tax planning strategies (see note 13). |
Employee benefits | Employee benefits 1. Pensions When the calculation results in a potential asset, the recognition of that asset is limited to the asset ceiling – that is the present value of any economic benefits available in the form of refunds from the plan or a reduction in future contributions. Management uses judgement to determine the level of refunds available from the plan in recognising an asset. The determination of the pension cost and defined benefit obligation of the Group’s defined benefit pension schemes depends on the selection of certain assumptions, which include the discount rate, inflation rate, salary growth and longevity (see note 25). Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. The service cost, representing benefits accruing over the year, is included in the income statement as an operating cost. Net interest is calculated by applying the discount rate to the net defined benefit obligation and is presented as finance costs or finance income. Obligations for contributions to defined contribution pension plans are recognised as an operating expense in the income statement as incurred. 2. Other post-retirement obligations 3. Share-based payments |
Provisions | Provisions The Group recognises a provision for deferred consideration. Where this is contingent on future performance or a future event, judgement is exercised in establishing the fair value. The Group recognises a provision for onerous lease contracts when the expected benefits to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. The calculation of onerous lease provisions involves estimates of potential sublet income, lease terms including rent free periods, void periods, lease incentives and running costs. The provision is based on the present value of future payments for surplus leased properties under non-cancellable sub-leasing |
Revenue recognition | Revenue recognition The Group’s revenue streams are courseware, assessments and services. Courseware includes curriculum materials provided in book form and/or via access to digital content. Assessments includes test development, processing and scoring services provided to governments, educational institutions, corporations and professional bodies. Services includes the operation of schools, colleges and universities, including sistemas in Brazil, as well as the provision of online learning services in partnership with universities and other academic institutions. Revenue is recognised in order to depict the transfer of control of promised goods and services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods and services. This process begins with the identification of our contract with a customer, which is generally through a master services agreement, customer purchase order, or a combination thereof. Within each contract, judgement is applied to determine the extent to which activities within the contract represent distinct performance obligations to be delivered and the total amount of transaction price to which we expect to be entitled. The transaction price determined is net of sales taxes, rebates and discounts, and after eliminating sales within the Group. Where a contract contains multiple performance obligations such as the provision of supplementary materials or online access with textbooks, revenue is allocated on the basis of relative standalone selling prices. Where a contract contains variable consideration significant estimation is required to determine the amount to which the Group is expected to be entitled. Revenue is recognised on contracts with customers when or as performance obligations are satisfied which is the period or the point in time where control of goods or services transfer to the customer. Judgement is applied to determine first whether control passes over time and if not, then the point in time at which control passes. Where revenue is recognised over time judgement is used to determine the method which best depicts the transfer of control. Where an input method is used significant estimation is required to determine the progress towards delivering the performance obligation. Revenue from the sale of books is recognised net of a provision for anticipated returns. This provision is based primarily on historical return rates, customer buying patterns and retailer behaviours including stock levels (see note 22). If these estimates do not reflect actual returns in future periods then revenues could be understated or overstated for a particular period. When the provision for returns is remeasured at each reporting date to reflect changes in estimates, a corresponding adjustment is also recorded to revenue. The Group may enter into contracts with another party in addition to our customer. In making the determination as to whether revenue should be recognised on a gross or net basis, the contract with the customer is analysed to understand which party controls the relevant good or service prior to transferring to the customer. This judgement is informed by facts and circumstances of the contract in determining whether the Group has promised to provide the specified good or service or whether the Group is arranging for the transfer of the specified good or service, including which party is responsible for fulfillment, has discretion to set the price to the customer and is responsible for inventory risk. On certain contracts, where the Group acts as an agent, only commissions and fees receivable for services rendered are recognised as revenue. Any third-party costs incurred on behalf of the principal that are rechargeable under the contractual arrangement are not included in revenue. Income from recharges of freight and other activities which are incidental to the normal revenue-generating activities is included in other income. The Group has applied IFRS 15 using the cumulative effect method and therefore comparative information has not been restated and continues to be reported under IAS 18 and IAS 11. The details of accounting policies under IAS 18 and IAS 11 are disclosed separately if they are different from those under IFRS 15. A description of the changes impacting the Group as well as a quantitative impact analysis has been disclosed in note 1b. Additional details on the Group’s revenue streams are also included in note 3. |
Leases | Leases Leases of property, plant and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the commencement of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in financial liabilities – borrowings. The interest element of the finance cost is charged to the income statement over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset or the lease term. Leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases by the lessee. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease |
Dividends | Dividends Final dividends are recorded in the Group’s financial statements in the period in which they are approved by the company’s shareholders. Interim dividends are recorded when paid. |
Discontinued operations | Discontinued operations A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or meets the criteria to be classified as held for sale. Discontinued operations are presented in the income statement as a separate line and are shown net of tax. |
Assets and liabilities held for sale | Assets and liabilities held for sale Assets and liabilities are classified as held for sale and stated at the lower of carrying amount and fair value less costs to sell if it is highly probable that the carrying amount will be recovered principally through a sale transaction rather than through continuing use. No depreciation is charged in respect of non-current non-current |
Trade receivables | Trade receivables Trade receivables are stated at fair value after provision for bad and doubtful debts. Following the adoption of IFRS 9 in 2018, provisions for bad and doubtful debts are based on the expected credit loss model. The ‘simplified approach’ is used with the expected loss allowance measured at an amount equal to the lifetime expected credit losses. In 2017, trade receivables are also stated after provision for anticipated future sales returns (also see Revenue recognition policy and note 1b). |
IFRS 15 [member] | |
Statement [LineItems] | |
Change of accounting policy | 1b. Change of accounting policy: IFRS 15 The Group has adopted IFRS 15 ‘Revenue from Contracts with Customers’ at 1 January 2018 and applied the modified retrospective approach. Comparatives for 2017 have not been restated and the cumulative impact of adoption has been recognised as a decrease to retained earnings with a corresponding decrease in net assets at 1 January 2018 as follows: All figures in £ millions 2018 Retained earnings Unexercised customer rights (or breakage) (103 ) Online Program Management (OPM) marketing (38 ) Administration fees (2 ) Commissions 1 Income tax 34 Total impact at 1 January 2018 (108 ) Current assets Inventories 12 Trade and other receivables 133 Assets classified as held for sale 31 Non-current Deferred income tax liabilities 16 Current liabilities Trade and other liabilities (215 ) Liabilities classified as held for sale (85 ) Total impact at 1 January 2018 (108 ) IFRS 15 has had an impact on retained earnings in four areas as outlined below. There was no net impact on any associate investments of the Group. Unexercised customer rights (or breakage): The Group sells rights to future performance to customers which may go unexercised. While the customer has paid for future performance, usage is at the customer’s discretion and those rights may expire prior to usage, or never be used. The Group maintains historical customer data to understand usage patterns over time (i.e. redemption rates). Where the Group expects to have no future obligation (based on these redemption rates), revenue has historically been recognised immediately for this portion of the sale. Under IFRS 15, where the Group previously recognised this breakage element on subscriptions, revenue is now recognised evenly over the period of use. Where breakage relates to sales of tests or vouchers, revenue is now recognised when the underlying tests are delivered. This revised treatment in respect of breakage has primarily affected the school and higher education businesses in North America and resulted in higher deferred income at adoption on 1 January 2018. Online Program Management (OPM) marketing: Historically the OPM business recognised revenue for the pre-semester pre-semester pre-semester Administration fees: This relates to non-refundable up-front Commissions: This relates to incremental costs of obtaining customer contracts, such as sales incentive plans or sales commissions specifically linked to obtaining new contracts. Historically such commissions have been charged to the profit and loss account as incurred. Under IFRS 15, sales commissions in respect of customer transactions with an accounting period of greater than one year have been capitalised and amortised over that accounting period, using practical expedients permissible under the new standard. This revised treatment affects the US Assessments business and resulted in a higher contract related asset upon adoption on 1 January 2018. In addition to the changes above, IFRS 15 also requires that the Group’s provision for sales returns is reclassified. This provision was previously netted off in trade receivables and from 1 January 2018 this is now shown in two parts as a separate sales return liability within trade and other liabilities and an inventory returns asset within inventory. The effect on transition was to increase trade and other receivables by £170m, increase trade and other liabilities by £182m and inventory by £12m. In addition, held for sale assets and liabilities were both increased by £13m. The impact of adoption on the results for 2018 is outlined below. 2018 All figures in £ millions Amounts pre Transition In period Amounts as Sales 4,120 — 9 4,129 Operating profit 544 — 9 553 Profit before tax 489 — 9 498 Income tax 94 — (2 ) 92 Profit for the year 583 — 7 590 Other comprehensive income/(expense) for the year 130 — (6 ) 124 Total comprehensive income for the year 713 — 1 714 Current assets Inventories 154 12 (2 ) 164 Trade and other receivables 1,058 133 (13 ) 1,178 Assets classified as held for sale 630 31 (13 ) 648 Non-current Deferred income tax liabilities (154 ) 16 2 (136 ) Current liabilities Trade and other liabilities (1,193 ) (215 ) 8 (1,400 ) Liabilities classified as held for sale (507 ) (85 ) 19 (573 ) Net assets 4,632 (108 ) 1 4,525 Had the Group been applying IFRS 15 during 2017, it is estimated that both sales and profit before tax would have been £2m higher for the full year, with the balance sheet impact at the beginning and end of the year being similar. |
IFRS9 [member] | |
Statement [LineItems] | |
Change of accounting policy | 1c. Change of accounting policy: IFRS 9 The Group adopted IFRS 9 ‘Financial Instruments’ at 1 January 2018 and applied the new rules in accordance with the transitional provisions. Comparatives for 2017 have not been restated. The Group has assessed the impact of adopting IFRS 9 and the only material adjustment is an increase in the provision for losses against trade debtors which was reflected as an adjustment to retained earnings at 1 January 2018 as shown below. All figures in £ millions 2018 Retained earnings Provision for losses against trade debtors (13 ) Income tax 3 Total impact at 1 January 2018 (10 ) Non-current Deferred income tax assets 3 Current assets Trade and other receivables (12 ) Assets classified as held for sale (1 ) Total impact at 1 January 2018 (10 ) The adjustment arises from adoption of the expected credit loss model for impairments under IFRS 9. The adoption of this model requires the recognition of impairment provisions based on expected credit losses rather than only incurred credit losses, as is the case under IAS 39. Although there is a transition impact from adoption of the new model there was no material impact on profit before tax for 2018. Under IFRS 9, the Group’s equity financial investments continue to be recognised at fair value and the Group has elected to take the option to recognise all movements in fair value in other comprehensive income (FVOCI). Gains or losses realised on the subsequent sale of these financial assets (FVOCI investments) are no longer recycled through the profit and loss account, but are instead reclassified from the FVOCI reserve to retained earnings. There was one small disposal of these assets during 2018 resulting in a reclassification of a £2m gain. IFRS 9 also introduced a new, simpler hedge accounting model with a principles-based approach designed to align the accounting result with the economic hedging strategy. The Group previously used fair value hedge relationships to hedge interest rate risk and currency risk on its bond borrowings and also used net investment hedging relationships to hedge currency re-translation The following table shows the original classification and measurement categories of financial assets and liabilities under IAS 39 and the new classification and measurement categories under IFRS 9 as at 1 January 2018. The effect of adopting IFRS 9 on the carrying amounts of financial assets and liabilities relates solely to the new impairment requirements as shown in the previous table, all other carrying values remained the same. Original classification and measurement New classification and measurement Financial assets Investments in unlisted securities Available for sale – fair value Fair value through OCI Cash and cash equivalents Loans and receivables – amortised cost Financial assets at amortised cost Marketable securities Available for sale – fair value Fair value through profit or loss Derivative financial instruments used for hedging Derivatives in a hedge relationship – fair value Fair value – hedging instrument Other derivative financial instruments Held for trading – fair value Fair value through profit or loss Trade receivables Loans and receivables – amortised cost Financial assets at amortised cost Financial liabilities Derivative financial instruments used for hedging Derivatives in a hedge relationship – fair value Fair value – hedging instrument Other derivative financial instruments Held for trading – fair value Fair value through profit or loss Trade payables Other liabilities – amortised cost Other financial liabilities – amortised cost Liability to purchase own shares Other liabilities – amortised cost Other financial liabilities – amortised cost Bank loans and overdrafts Other liabilities – amortised cost Other financial liabilities – amortised cost Finance lease liabilities Other liabilities – amortised cost Other financial liabilities – amortised cost Bonds Other liabilities – amortised cost Other financial liabilities – amortised cost |
Accounting policies (Tables)
Accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Estimated Useful Lives of Property, Plant and Equipment | Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost less their residual values over their estimated useful lives as follows: Buildings (freehold): 20 – 50 years Buildings (leasehold): over the period of the lease Plant and equipment: 3 – 10 years |
Schedule of Impact of IFRS 15 Adoption Recognised as a Decrease to Retained Earnings with Correspond Decrease in Net Assets | The Group has adopted IFRS 15 ‘Revenue from Contracts with Customers’ at 1 January 2018 and applied the modified retrospective approach. Comparatives for 2017 have not been restated and the cumulative impact of adoption has been recognised as a decrease to retained earnings with a corresponding decrease in net assets at 1 January 2018 as follows: All figures in £ millions 2018 Retained earnings Unexercised customer rights (or breakage) (103 ) Online Program Management (OPM) marketing (38 ) Administration fees (2 ) Commissions 1 Income tax 34 Total impact at 1 January 2018 (108 ) Current assets Inventories 12 Trade and other receivables 133 Assets classified as held for sale 31 Non-current Deferred income tax liabilities 16 Current liabilities Trade and other liabilities (215 ) Liabilities classified as held for sale (85 ) Total impact at 1 January 2018 (108 ) The impact of adoption on the results for 2018 is outlined below. 2018 All figures in £ millions Amounts pre Transition In period Amounts as Sales 4,120 — 9 4,129 Operating profit 544 — 9 553 Profit before tax 489 — 9 498 Income tax 94 — (2 ) 92 Profit for the year 583 — 7 590 Other comprehensive income/(expense) for the year 130 — (6 ) 124 Total comprehensive income for the year 713 — 1 714 Current assets Inventories 154 12 (2 ) 164 Trade and other receivables 1,058 133 (13 ) 1,178 Assets classified as held for sale 630 31 (13 ) 648 Non-current Deferred income tax liabilities (154 ) 16 2 (136 ) Current liabilities Trade and other liabilities (1,193 ) (215 ) 8 (1,400 ) Liabilities classified as held for sale (507 ) (85 ) 19 (573 ) Net assets 4,632 (108 ) 1 4,525 |
Schedule of Impact of IFRS 9 Adoption Recognised as a Decrease to Retained Earnings with Correspond Decrease in Net Assets | The Group adopted IFRS 9 ‘Financial Instruments’ at 1 January 2018 and applied the new rules in accordance with the transitional provisions. Comparatives for 2017 have not been restated. The Group has assessed the impact of adopting IFRS 9 and the only material adjustment is an increase in the provision for losses against trade debtors which was reflected as an adjustment to retained earnings at 1 January 2018 as shown below. All figures in £ millions 2018 Retained earnings Provision for losses against trade debtors (13 ) Income tax 3 Total impact at 1 January 2018 (10 ) Non-current Deferred income tax assets 3 Current assets Trade and other receivables (12 ) Assets classified as held for sale (1 ) Total impact at 1 January 2018 (10 ) |
Summary of Classification and Measurement Categories of Financial Assets and Liabilities Under IAS 39 and the New Classification and Measurement Categories Under IFRS 9 | The following table shows the original classification and measurement categories of financial assets and liabilities under IAS 39 and the new classification and measurement categories under IFRS 9 as at 1 January 2018. The effect of adopting IFRS 9 on the carrying amounts of financial assets and liabilities relates solely to the new impairment requirements as shown in the previous table, all other carrying values remained the same. Original classification and measurement New classification and measurement Financial assets Investments in unlisted securities Available for sale – fair value Fair value through OCI Cash and cash equivalents Loans and receivables – amortised cost Financial assets at amortised cost Marketable securities Available for sale – fair value Fair value through profit or loss Derivative financial instruments used for hedging Derivatives in a hedge relationship – fair value Fair value – hedging instrument Other derivative financial instruments Held for trading – fair value Fair value through profit or loss Trade receivables Loans and receivables – amortised cost Financial assets at amortised cost Financial liabilities Derivative financial instruments used for hedging Derivatives in a hedge relationship – fair value Fair value – hedging instrument Other derivative financial instruments Held for trading – fair value Fair value through profit or loss Trade payables Other liabilities – amortised cost Other financial liabilities – amortised cost Liability to purchase own shares Other liabilities – amortised cost Other financial liabilities – amortised cost Bank loans and overdrafts Other liabilities – amortised cost Other financial liabilities – amortised cost Finance lease liabilities Other liabilities – amortised cost Other financial liabilities – amortised cost Bonds Other liabilities – amortised cost Other financial liabilities – amortised cost |
Segment information (Tables)
Segment information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Segment Reporting Information | For more detail on the services and products included in each business segment refer to Item 4. 2018 All figures in £ millions Notes North Core Growth Penguin Corporate Group Sales 2,784 806 539 — — 4,129 Adjusted operating profit 362 57 59 68 — 546 Cost of major restructuring (78 ) (16 ) — (8 ) — (102 ) Intangible charges (72 ) (8 ) (19 ) (14 ) — (113 ) Other net gains and losses 4 — 226 — — 230 UK pension GMP equalisation — (8 ) — — — (8 ) Operating profit 216 25 266 46 — 553 Finance costs 6 (91 ) Finance income 6 36 Profit before tax 498 Income tax 7 92 Profit for the year 590 Segment assets 4,366 1,975 536 — 636 7,513 Joint ventures 12 — — — — — — Associates 12 — 5 — 387 — 392 Total assets 4,366 1,980 536 387 636 7,905 Other segment items Share of results of joint ventures and associates 12 (4 ) 1 1 46 — 44 Capital expenditure 10, 11 135 25 36 — — 196 Pre-publication 20 234 90 64 — — 388 Depreciation 10 41 12 13 — — 66 Amortisation 11, 20 344 92 89 — — 525 Included in the North America segment above is £60m in pre-publication 2017 All figures in £ millions Notes North Core Growth Penguin Corporate Group Sales 2,929 815 769 — — 4,513 Adjusted operating profit 394 50 38 94 — 576 Cost of major restructuring (60 ) (11 ) (8 ) — — (79 ) Intangible charges (89 ) (12 ) (37 ) (28 ) — (166 ) Other net gains and losses (3 ) — 35 96 — 128 Impact of US tax reform — — — (8 ) — (8 ) Operating profit 242 27 28 154 — 451 Finance costs 6 (110 ) Finance income 6 80 Profit before tax 421 Income tax 7 (13 ) Profit for the year 408 Segment assets 4,116 1,914 667 — 793 7,490 Joint ventures 12 — — 3 — — 3 Associates 12 4 3 — 388 — 395 Total assets 4,120 1,917 670 388 793 7,888 Other segment items Share of results of joint ventures and associates 12 5 1 1 71 — 78 Capital expenditure 10,11 162 35 43 — — 240 Pre-publication 20 218 84 59 — — 361 Depreciation 10 56 13 21 — — 90 Amortisation 11,20 348 103 110 — — 561 2016 All figures in £ millions Notes North Core Growth Penguin Corporate Group Continuing operations Sales 2,981 803 768 — — 4,552 Adjusted operating profit 420 57 29 129 — 635 Cost of major restructuring (172 ) (62 ) (95 ) (9 ) — (338 ) Intangible charges (2,684 ) (16 ) (33 ) (36 ) — (2,769 ) Other net gains and losses (12 ) (12 ) (1 ) — — (25 ) Operating (loss)/profit (2,448 ) (33 ) (100 ) 84 — (2,497 ) Finance costs 6 (97 ) Finance income 6 37 Loss before tax (2,557 ) Income tax 7 222 Loss for the year from continuing operations (2,335 ) Segment assets 4,859 1,461 859 — 1,640 8,819 Joint ventures 12 — — 2 — — 2 Associates 12 1 4 — 1,240 — 1,245 Total assets 4,860 1,465 861 1,240 1,640 10,066 Other segment items Share of results of joint ventures and associates 12 (1 ) 1 (1 ) 98 — 97 Capital expenditure 10, 11 153 42 51 — — 246 Pre-publication investment 20 235 92 68 — — 395 Depreciation 10 56 12 27 — — 95 Amortisation 11, 20 394 109 116 — — 619 Impairment 11 2,548 — — — — 2,548 |
Summary of Operating Segments in Geographic Areas | The Group operates in the following main geographic areas: Sales Non-current assets All figures in £ millions 2018 2017 2016 2018 2017 UK 377 384 393 900 796 Other European countries 246 262 255 143 128 US 2,627 2,770 2,829 2,162 2,247 Canada 126 126 118 250 240 Asia Pacific 455 643 632 146 151 Other countries 298 328 325 137 184 Total 4,129 4,513 4,552 3,738 3,746 |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Analysis of Group's Revenue Streams | The following tables analyse the Group’s revenue streams. Courseware includes curriculum materials provided in book form and/or via access to digital content. Assessments includes test development, processing and scoring services provided to governments, educational institutions, corporations and professional bodies. Services includes the operation of schools, colleges and universities, including sistemas in Brazil as well as the provision of online learning services in partnership with universities and other academic institutions. 2018 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 378 172 127 677 Higher Education Courseware 1,042 87 57 1,186 English Courseware 16 58 102 176 1,436 317 286 2,039 Assessments School and Higher Education Assessments 332 247 23 602 Clinical Assessments 140 45 — 185 Professional and English Certification 344 150 64 558 816 442 87 1,345 Services School Services 288 2 47 337 Higher Education Services 244 40 29 313 English Services — 5 90 95 532 47 166 745 Total 2,784 806 539 4,129 2017 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 394 171 139 704 Higher Education Courseware 1,146 93 63 1,302 English Courseware 20 60 102 182 1,560 324 304 2,188 Assessments School and Higher Education Assessments 355 256 23 634 Clinical Assessments 146 46 — 192 Professional and English Certification 341 138 60 539 842 440 83 1,365 Services School Services 274 5 54 333 Higher Education Services 253 34 32 319 English Services — 12 296 308 527 51 382 960 Total 2,929 815 769 4,513 2016 All figures in £ millions North Core Growth Group Sales: Courseware School Courseware 418 173 127 718 Higher Education Courseware 1,147 92 60 1,299 English Courseware 21 65 97 183 1,586 330 284 2,200 Assessments School and Higher Education Assessments 378 268 21 667 Clinical Assessments 143 40 — 183 Professional and English Certification 333 112 49 494 854 420 70 1,344 Services School Services 259 6 54 319 Higher Education Services 269 29 46 344 English Services 13 18 314 345 541 53 414 1,008 Total 2,981 803 768 4,552 |
Summary of transfer of goods and services over time and at a point in time | The Group derived revenue for the year to 31 December 2018 from the transfer of goods and services over time and at a point in time in the following major product lines: All figures in £ millions North Core Growth Total Courseware Products transferred at a point in time (sale or return) 718 313 197 1,228 Products transferred at a point in time (other) — — 35 35 Products and services transferred over time 718 4 54 776 1,436 317 286 2,039 Assessments Products transferred at a point in time 146 65 6 217 Products and services transferred over time 670 377 81 1,128 816 442 87 1,345 Services Products transferred at a point in time — 26 38 64 Products and services transferred over time 532 21 128 681 532 47 166 745 Total sales 2,784 806 539 4,129 |
Summary of remaining transaction price on unsatisfied or partially unsatisfied performance obligations from contracts with customers | The below table depicts the remaining transaction price on unsatisfied or partially unsatisfied performance obligations from contracts with customers as at 31 December 2018. Sales Deferred Committed Total remaining 2019 2020 2021 Courseware Products transferred at a point in time (sale or return) 1,228 1 — 1 1 — — Products transferred at a point in time (other) 35 — — — — — — Products and services transferred over time 776 679 8 687 272 131 284 Assessments Products transferred at a point in time 217 — — — — — — Products and services transferred over time 1,128 196 402 598 420 173 5 Services Products transferred at a point in time 64 — — — — — — Products and services transferred over time – subscriptions 310 17 — 17 13 3 1 Products and services transferred over time – other ongoing performance obligations 371 19 145 164 162 1 1 Total 4,129 912 555 1,467 868 308 291 |
Operating expenses (Tables)
Operating expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Operating Expenses by Function | All figures in £ millions 2018 2017 2016 By function: Cost of goods sold 1,943 2,066 2,093 Operating expenses Distribution costs 88 84 88 Selling, marketing and product development costs 759 896 908 Administrative and other expenses 1,039 1,207 1,240 Restructuring costs 90 79 329 Other income (69 ) (64 ) (85 ) Total net operating expenses 1,907 2,202 2,480 Other net gains and losses (230 ) (128 ) 25 Impairment of intangible assets — — 2,548 Total 3,620 4,140 7,146 |
Summary of Analysis of Restructuring Costs | An analysis of major restructuring costs is as follows: All figures in £ millions 2018 2017 2016 By nature: Product costs 12 15 32 Employee costs 56 11 139 Depreciation and amortisation 1 13 29 Property and facilities (5 ) 24 43 Technology and communications 1 2 7 Professional and outsourced services 9 12 31 General and administrative costs 16 2 48 Total restructuring – operating expenses 90 79 329 Share of associate restructuring 12 — 9 Total 102 79 338 |
Summary of Operating Expenses by Nature | All figures in £ millions Notes 2018 2017 2016 By nature: Royalties expensed 236 246 264 Other product costs 516 564 616 Employee benefit expense 5 1,637 1,805 1,888 Contract labour 161 152 206 Employee-related expense 115 127 122 Promotional costs 233 229 217 Depreciation of property, plant and equipment 10 66 90 95 Amortisation of intangible assets – pre-publication 20 338 338 350 Amortisation of intangible assets – software 11 88 85 84 Amortisation of intangible assets – other 11 99 138 185 Impairment of intangible assets — — 2,548 Property and facilities 147 202 243 Technology and communications 192 218 188 Professional and outsourced services 396 322 378 Other general and administrative costs 85 140 140 Costs capitalised to intangible assets (390 ) (324 ) (318 ) Other net gains and losses (230 ) (128 ) 25 Other income (69 ) (64 ) (85 ) Total 3,620 4,140 7,146 |
Summary of Services From the Group's Auditors | During the year the Group obtained the following services from the Group’s auditors: All figures in £ millions 2018 2017 2016 The audit of parent company and consolidated financial statements 4 4 5 The audit of the company’s subsidiaries 2 2 2 Total audit fees 6 6 7 Audit-related and other assurance services 1 1 1 Other non-audit — 1 1 Total other services 1 2 2 Total non-audit 1 2 2 Total 7 8 9 |
Summary of Reconciliation Between Audit and Non-Audit Service Fees | Reconciliation between audit and non-audit All figures in £ millions 2018 2017 2016 Group audit fees including fees for attestation under section 404 of the Sarbanes-Oxley Act 6 6 7 Non-audit 1 2 2 Total 7 8 9 |
Employee information (Tables)
Employee information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Classification of Employee Benefit | All figures in £ millions Notes 2018 2017 2016 Employee benefit expense Wages and salaries (including termination costs) 1,421 1,567 1,661 Social security costs 112 130 124 Share-based payment costs 26 37 33 22 Retirement benefits – defined contribution plans 25 56 57 67 Retirement benefits – defined benefit plans 25 23 19 16 Other post-retirement medical benefits 25 (12 ) (1 ) (2 ) Total 1,637 1,805 1,888 |
Summary of Average Number of Employees | The details of the emoluments of the Directors of Pearson plc are shown in the report on Directors’ remuneration. Average number employed 2018 2017 2016 Employee numbers North America 14,113 16,295 16,841 Core 5,192 5,291 5,664 Growth 4,521 8,268 9,868 Other 496 485 346 Total 24,322 30,339 32,719 |
Net finance costs (Tables)
Net finance costs (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Information About Finance Income and Costs | All figures in £ millions Notes 2018 2017 2016 Interest payable on financial liabilities at amortised cost and associated derivatives (42 ) (99 ) (74 ) Net foreign exchange losses (36 ) — (21 ) Finance costs associated with transactions (1 ) (6 ) — Derivatives not in a hedge relationship (7 ) (5 ) (2 ) Derivatives in a hedge relationship (5 ) — — Finance costs (91 ) (110 ) (97 ) Interest receivable on financial assets at amortised cost 18 20 15 Net finance income in respect of retirement benefits 25 11 3 11 Net foreign exchange gains — 44 1 Derivatives not in a hedge relationship 6 12 10 Derivatives in a hedge relationship 1 1 — Finance income 36 80 37 Net finance costs (55 ) (30 ) (60 ) |
Income tax (Tables)
Income tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Components of Current Tax Expense Income and Adjustments for Current Tax of Prior Periods | All figures in £ millions Notes 2018 2017 2016 Current tax Credit/(charge) in respect of current year 92 (121 ) (66 ) Adjustments in respect of prior years 34 (2 ) 27 Total current tax credit/(charge) 126 (123 ) (39 ) Deferred tax In respect of temporary differences (6 ) 96 277 Other adjustments in respect of prior years (28 ) 14 (16 ) Total deferred tax (charge)/credit 13 (34 ) 110 261 Total tax credit/(charge) 92 (13 ) 222 |
Summary of Profit Before Tax Differences Calculated | The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the UK tax rate as follows. All figures in £ millions 2018 2017 2016 Profit before tax 498 421 (2,557 ) Tax calculated at UK rate (2018: 19%, 2017: 19.25%, 2016: 20%) (94 ) (81 ) 511 Effect of overseas tax rates (28 ) 15 424 Joint venture and associate income reported net of tax 8 15 19 Intangible impairment not subject to tax — — (722 ) Intra-group financing benefit 25 26 34 Movement in provisions for tax uncertainties 111 49 (37 ) Impact of US tax reform — (1 ) — Net expense not subject to tax (29 ) (39 ) (8 ) Benefit from change in US tax accounting treatment 25 — — Gains and losses on sale of businesses not subject to tax 77 8 15 Utilisation of previously unrecognised tax losses and credits — (1 ) — Unrecognised tax losses (9 ) (16 ) (25 ) Adjustments in respect of prior years 6 12 11 Total tax credit/(charge) 92 (13 ) 222 UK 37 (36 ) 46 Overseas 55 23 176 Total tax credit/(charge) 92 (13 ) 222 Tax rate reflected in earnings (18.5 )% 3.1 % 8.7 % |
Summary of Tax Benefit/(Charge) Recognised in Other Comprehensive Income | The tax benefit/(charge) recognised in other comprehensive income is as follows: All figures in £ millions 2018 2017 2016 Net exchange differences on translation of foreign operations (4 ) 9 (5 ) Fair value gain on other financial assets — (4 ) — Remeasurement of retirement benefit obligations 9 (42 ) 58 5 (37 ) 53 |
Earnings per share (Tables)
Earnings per share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Earnings Per Share | All figures in £ millions Notes 2018 2017 2016 Earnings/(loss) for the year from continuing operations 590 408 (2,335 ) Non-controlling (2 ) (2 ) (2 ) Earnings/(loss) attributable to equity holders of the company 588 406 (2,337 ) Weighted average number of shares (millions) 778.1 813.4 814.8 Effect of dilutive share options (millions) 0.6 0.3 — Weighted average number of shares (millions) for diluted earnings 778.7 813.7 814.8 Earnings/(loss) per share Basic 75.6p 49.9p (286.8)p Diluted 75.5p 49.9p (286.8)p |
Dividends (Tables)
Dividends (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Dividends Declared | All figures in £ millions 2018 2017 2016 Final paid in respect of prior year 12.0p (2017: 34.0p, 2016: 34.0p) 93 277 277 Interim paid in respect of current year 5.5p (2017: 5.0p, 2016: 18.0p) 43 41 147 136 318 424 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Summary of Property, plant and equipment | All figures in £ millions Land and Plant and Assets in Total Cost At 1 January 2017 398 560 20 978 Exchange differences (20 ) (29 ) (2 ) (51 ) Additions 26 40 24 90 Disposals (13 ) (34 ) — (47 ) Disposal through business disposal (11 ) (5 ) — (16 ) Reclassifications 5 8 (13 ) — Transfer to intangible assets — (11 ) — (11 ) Transfer to assets classified as held for sale (55 ) (2 ) — (57 ) At 31 December 2017 330 527 29 886 Exchange differences 11 14 1 26 Additions 32 22 12 66 Disposals (75 ) (97 ) — (172 ) Reclassifications 19 (8 ) (11 ) — Transfer to intangible assets — — (11 ) (11 ) Transfer to intangible assets – pre-publication — — (2 ) (2 ) At 31 December 2018 317 458 18 793 All figures in £ millions Land and Plant and Assets in Total Depreciation At 1 January 2017 (229 ) (406 ) — (635 ) Exchange differences 12 23 — 35 Charge for the year (35 ) (55 ) — (90 ) Disposals 9 26 — 35 Disposal through business disposal 6 3 — 9 Transfer to assets classified as held for sale 40 1 — 41 At 31 December 2017 (197 ) (408 ) — (605 ) Exchange differences (5 ) (11 ) — (16 ) Charge for the year (20 ) (46 ) — (66 ) Disposals 34 97 — 131 Reclassifications (7 ) 7 — — At 31 December 2018 (195 ) (361 ) — (556 ) Carrying amounts At 1 January 2017 169 154 20 343 At 31 December 2017 133 119 29 281 At 31 December 2018 122 97 18 237 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Intangible Assets | All figures in £ millions Goodwill Software Acquired Acquired Acquired Other Total Cost At 1 January 2017 2,341 798 974 353 211 600 5,277 Exchange differences (148 ) (46 ) (74 ) (26 ) (6 ) (50 ) (350 ) Additions – internal development — 133 — — — — 133 Additions – purchased — 17 — — — — 17 Disposals — (23 ) — — — — (23 ) Disposal through business disposal — (4 ) (9 ) (19 ) — (27 ) (59 ) Transfer from property, plant and equipment — 11 — — — — 11 Transfer to assets classified as held for sale (163 ) (4 ) (2 ) (27 ) (21 ) (34 ) (251 ) At 31 December 2017 2,030 882 889 281 184 489 4,755 Exchange differences 74 32 39 (2 ) — 1 144 Additions – internal development — 124 — — — — 124 Additions – purchased — 6 — — — — 6 Disposals — (94 ) (18 ) (12 ) — (33 ) (157 ) Disposal through business disposal — (2 ) — — — — (2 ) Transfer from property, plant and equipment — 11 — — — — 11 Transfer from assets classified as held for sale 7 — — — — — 7 At 31 December 2018 2,111 959 910 267 184 457 4,888 Amortisation At 1 January 2017 — (461 ) (555 ) (209 ) (198 ) (412 ) (1,835 ) Exchange differences — 30 43 13 4 36 126 Charge for the year — (85 ) (77 ) (18 ) (3 ) (40 ) (223 ) Disposals — 21 — — — — 21 Disposal through business disposal — 2 8 18 — 22 50 Transfer to assets classified as held for sale — — 1 16 19 34 70 At 31 December 2017 — (493 ) (580 ) (180 ) (178 ) (360 ) (1,791 ) Exchange differences — (23 ) (26 ) 1 2 (10 ) (56 ) Charge for the year — (88 ) (59 ) (14 ) (2 ) (24 ) (187 ) Disposals — 92 18 12 — 33 155 Disposal through business disposal — — — — — — — At 31 December 2018 — (512 ) (647 ) (181 ) (178 ) (361 ) (1,879 ) Carrying amounts At 1 January 2017 2,341 337 419 144 13 188 3,442 At 31 December 2017 2,030 389 309 101 6 129 2,964 At 31 December 2018 2,111 447 263 86 6 96 3,009 |
Summary of Useful Economic Life of Intangible Assets | The range of useful economic lives for each major class of intangible asset (excluding goodwill and software) is shown below: 2018 Class of intangible asset Useful economic life Acquired customer lists, contracts and relationships 3-20 years Acquired trademarks and brands 2-20 Acquired publishing rights 5-20 Other intangibles acquired 2-20 |
Summary of Amortisation Profile of Intangible Assets | The expected amortisation profile of acquired intangible assets is shown below: 2018 All figures in £ millions One to Six to More than Total Class of intangible asset Acquired customer lists, contracts and relationships 187 66 10 263 Acquired trademarks and brands 49 27 10 86 Acquired publishing rights 5 1 — 6 Other intangibles acquired 77 19 — 96 |
Summary of Carrying Value of Goodwill | The carrying value of the goodwill in each of the CGUs is summarised below: All figures in £ millions 2018 2017 North America 930 1,013 Core 701 641 Growth (includes Brazil, China, India and South Africa) — — Pearson VUE 480 376 Total 2,111 2,030 |
Summary of Cumulative Impact of Changes in Assumptions Used in Calculating the Fair Value | The table below shows the headroom at 31 December 2018 and the cumulative impact of changes in the assumptions used in calculating the fair value. All figures in £ millions Headroom at 1% increase in 5% decrease in annual 10% decrease in 1% decrease in Headroom/(impairment) North America 356 128 27 (301 ) 167 Core 210 67 84 (42 ) 83 Brazil 20 (8 ) 3 (14 ) (4 ) |
Investments in joint ventures_2
Investments in joint ventures and associates (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Amounts Recognized in Financial Statements | The amounts recognised in the balance sheet are as follows: All figures in £ millions 2018 2017 Associates 392 395 Joint ventures — 3 Total 392 398 The amounts recognised in the income statement are as follows: All figures in £ millions 2018 2017 Associates 43 77 Joint ventures 1 1 Total 44 78 |
Summary of Material Associates and Financial Information of Material Associate | The Group has the following material associates: Principal place Ownership Nature of Measurement Penguin Random House Ltd UK/Global 25 % See below Equity Penguin Random House LLC US 25 % See below Equity The summarised financial information of the material associate is detailed below: 2018 2017 All figures in £ millions Penguin Penguin Assets Non-current 1,043 1,048 Current assets 1,929 1,758 Liabilities Non-current (1,104 ) (859 ) Current liabilities (1,546 ) (1,579 ) Net assets 322 368 Sales 2,775 2,693 Profit for the year 185 171 Other comprehensive income/(expense) 13 (60 ) Total comprehensive income 198 111 Dividends received from associate in relation to profits 67 146 Re-capitalisation 50 312 A reconciliation of the summarised financial information to the carrying value of the material associate is shown below: 2018 2017 All figures in £ millions Penguin Penguin Opening net assets 368 1,386 Exchange differences 18 (18 ) Profit for the year 185 171 Other comprehensive income/(expense) 13 (60 ) Dividends, net of tax paid (262 ) (1,167 ) Tax adjustments in relation to disposals — 56 Closing net assets 322 368 Share of net assets 80 92 Goodwill 307 296 Carrying value of associate 387 388 |
Summary of Individually Immaterial Associates | Information on other individually immaterial associates is detailed below: All figures in £ millions 2018 2017 (Loss)/profit for the year (3 ) 7 Total comprehensive (expense)/income (3 ) 7 |
Summary of Individually Immaterial Joint Ventures | Information on joint ventures, all of which are individually immaterial, is detailed below: All figures in £ millions 2018 2017 Profit for the year 1 1 Total comprehensive income 1 1 |
Deferred income tax (Tables)
Deferred income tax (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Deferred Income Tax | Deferred income tax All figures in £ millions 2018 2017 Deferred income tax assets 60 95 Deferred income tax liabilities (136 ) (164 ) Net deferred income tax (76 ) (69 ) |
Schedule of Movement on Net Deferred Income Assets and Liabilities | The movement in deferred income tax assets and liabilities during the year is as follows: All figures in £ millions Trading Returns Retirement Deferred Goodwill and Other Total Deferred income tax assets/(liabilities) At 1 January 2017 22 35 37 117 (295 ) 69 (15 ) Exchange differences (2 ) (3 ) (4 ) (8 ) 19 (8 ) (6 ) Income statement (charge)/benefit (11 ) 6 7 (9 ) 118 (1 ) 110 Disposal through business disposal — — — — — (3 ) (3 ) Tax benefit in other comprehensive income — — (84 ) — — (5 ) (89 ) Transfer to assets/(liabilities) classified as held for sale — (4 ) — (73 ) 3 8 (66 ) At 31 December 2017 9 34 (44 ) 27 (155 ) 60 (69 ) Adjustment on initial application of IFRS 15 (see note 1b) — — — 15 — 1 16 Adjustment on initial application of IFRS 9 (see note 1c) — — — — — 3 3 Exchange differences — 1 1 6 (16 ) (5 ) (13 ) Income statement (charge)/benefit 11 (4 ) (21 ) 20 (34 ) (14 ) (42 ) Disposal through business disposal — — — — — 16 16 Tax charge in other comprehensive income — — 9 — — — 9 Tax charge in equity — — — — — 4 4 At 31 December 2018 20 31 (55 ) 68 (205 ) 65 (76 ) |
Classification of financial i_2
Classification of financial instruments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Classification of Each Class of Financial Assets and their Carrying Values | The accounting classification of each class of the Group’s financial assets, and their carrying values, is as follows: 2018 2017 Fair value Amortised Fair value Amortised All figures in £ millions Notes FVOCI FVTPL Fair value Financial Total Available Derivatives Derivatives Loans and Total Investments in unlisted securities 15 93 — — — 93 77 — — — 77 Cash and cash equivalents 17 — — — 568 568 — — — 518 518 Cash and cash equivalents – within assets classified as held for sale 32 — — — — — — — — 127 127 Marketable securities — — — — — 8 — — — 8 Derivative financial instruments 16 — 4 64 — 68 — 3 137 — 140 Trade receivables 22 — — — 904 904 — — — 760 760 Trade receivables – within assets classified as held for sale — — — 49 49 — — — 22 22 Total financial assets 93 4 64 1,521 1,682 85 3 137 1,427 1,652 |
Schedule of Accounting Classification of Class of Financial Liabilities, Together with their Carrying Values and Market Values | The accounting classification of each class of the Group’s financial liabilities, together with their carrying values and market values, is as follows: 2018 2017 Fair value Amortised Fair value Amortised All figures in £ millions Notes FVTPL Fair value Other Total Total Derivatives Derivatives Other Total Total Derivative financial instruments 16 — (59 ) — (59 ) (59 ) — (140 ) — (140 ) (140 ) Trade payables 24 — — (311 ) (311 ) (311 ) — — (265 ) (265 ) (265 ) Trade payables – within liabilities classified as held for sale — — (22 ) (22 ) (22 ) — — (20 ) (20 ) (20 ) Liability to purchase own shares 24 — — — — — — — (151 ) (151 ) (151 ) Bank loans and overdrafts 18 — — (43 ) (43 ) (43 ) — — (15 ) (15 ) (15 ) Other borrowings due within one year 18 — — (3 ) (3 ) (3 ) — — (4 ) (4 ) (4 ) Borrowings due after more than one year 18 — — (674 ) (674 ) (663 ) — — (1,066 ) (1,066 ) (1,070 ) Total financial liabilities — (59 ) (1,053 ) (1,112 ) (1,101 ) — (140 ) (1,521 ) (1,661 ) (1,665 ) |
Schedule of Analysis of the Movements in Level 3 Fair Value Remeasurements | The following table analyses the movements in level 3 fair value remeasurements: 2018 2017 All figures in £ millions Investments Investments At beginning of year 77 65 Exchange differences 4 (4 ) Acquisition of investments 13 3 Fair value movements 7 13 Disposal of investments (8 ) — At end of year 93 77 |
Other financial assets (Tables)
Other financial assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Other Financial Assets | All figures in £ millions 2018 2017 At beginning of year 77 65 Exchange differences 4 (4 ) Acquisition of investments 13 3 Fair value movements 7 13 Disposal of investments (8 ) — At end of year 93 77 |
Derivative financial instrume_2
Derivative financial instruments and hedge accounting (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Outstanding Derivative Financial Instruments | The Group’s approach to the management of financial risks is set out in note 19. The Group’s outstanding derivative financial instruments are as follows: 2018 2017 All figures in £ millions Gross notional Assets Liabilities Gross notional Assets Liabilities Interest rate derivatives – in a fair value hedge relationship 404 13 — 799 23 — Interest rate derivatives – not in a hedge relationship 362 3 — 429 3 — Cross-currency rate derivatives – in a hedge relationship 577 51 (35 ) 1,522 114 (140 ) FX forwards and collars – in a hedge relationship 434 — (24 ) — — — Other derivatives – not in a hedge relationship 473 1 — — — — Total 2,250 68 (59 ) 2,750 140 (140 ) Analysed as expiring: In less than one year 771 1 (23 ) — — — Later than one year and not later than five years 795 22 (1 ) 1,638 65 (95 ) Later than five years 684 45 (35 ) 1,112 75 (45 ) Total 2,250 68 (59 ) 2,750 140 (140 ) |
Summary of Instruments to Hedge Exposures to Changes in Interest Rates and Foreign Currency Risk Associated with Borrowings | At December 2018, the Group held the following instruments to hedge exposures to changes in interest rates and foreign currency risk associated with borrowings. All figures in £ millions Carrying amount of Change in fair value of hedging Nominal amounts of hedging Interest rate risk Financial assets – derivative financial instruments 13 (7 ) 404 Currency risk Financial assets – derivative financial instruments 51 3 404 |
Summary of Amounts at the Reporting Rate Relating to Items Designated as Hedge Items | The amounts at the reporting date relating to items designated as hedge items were as follows: All figures in £ millions Carrying amount of Accumulated amount Change in fair value of Hedge Line item in profit or Interest rate risk Financial liabilities – borrowings (416 ) (9 ) 7 — n/a Currency risk Financial liabilities – borrowings (416 ) n/a (3 ) — n/a |
Summary of Amounts Related to Items Designated as Hedging Instruments | The amounts related to items designated as hedging instruments were as follows. All figures in £ millions Carrying amount of Change in value of Nominal amounts of Hedging gains/(losses) Hedge ineffectiveness Financial liabilities – derivative financial instruments (59 ) (22 ) 607 (22 ) — Financial liabilities – borrowings (256 ) (10 ) (256 ) (10 ) — |
Disclosure of Derivative Financial Assets and Liabilities Subject to Offsetting Arrangements | Derivative financial assets and liabilities subject to offsetting arrangements are as follows 2018 2017 All figures in £ millions Gross Gross Net derivative Gross Gross Net derivative Counterparties in an asset position 67 (44 ) 23 103 (78 ) 25 Counterparties in a liability position 1 (15 ) (14 ) 37 (62 ) (25 ) Total as presented in the balance sheet 68 (59 ) 9 140 (140 ) — |
Cash and cash equivalents (ex_2
Cash and cash equivalents (excluding overdrafts) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Cash and Cash Equivalents | All figures in £ millions 2018 2017 Cash at bank and in hand 533 361 Short-term bank deposits 35 157 568 518 Cash at bank and in hand – within assets classified as held for sale — 127 568 645 |
Summary of Cash and Cash Equivalents for Purpose of CashFlow Statement | All figures in £ millions 2018 2017 Cash and cash equivalents 568 518 Cash and cash equivalents – within assets classified as held for sale — 127 Bank overdrafts (43 ) (15 ) 525 630 |
Financial liabilities - borro_2
Financial liabilities - borrowings (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Current and Non - Current Borrowings | The Group’s current and non-current All figures in £ millions 2018 2017 Non-current 1.875% euro notes 2021 (nominal amount €250m; 2017 nominal amount €500m) 233 463 3.75% US dollar notes 2022 (nominal amount $117m) 92 85 3.25% US dollar notes 2023 (nominal amount $94m) 74 69 1.375% euro notes 2025 (nominal amount €300m; nominal amount €500m) 273 445 Finance lease liabilities 2 4 674 1,066 Current Due within one year or on-demand: Bank loans and overdrafts 43 15 Finance lease liabilities 3 4 46 19 Total borrowings 720 1,085 |
Summary of Maturities of the Group's Non-Current Borrowings | The maturities of the Group’s non-current All figures in £ millions 2018 2017 Between one and two years 1 3 Between two and five years 400 549 Over five years 273 514 674 1,066 |
Summary of Carrying Amounts and Market Value of Borrowings | The carrying amounts and market values of borrowings are as follows: 2018 2017 All figures in £ millions Effective Carrying Market Effective Carrying Market Bank loans and overdrafts n/a 43 43 n/a 15 15 1.875% euro notes 2021 2.04 % 233 233 2.04 % 463 467 3.75% US dollar notes 2022 3.94 % 92 91 3.94 % 85 87 3.25% US dollar notes 2023 3.36 % 74 71 3.36 % 69 67 1.375% euro notes 2025 1.44 % 273 266 1.44 % 445 445 Finance lease liabilities n/a 5 5 n/a 8 8 720 709 1,085 1,089 |
Summary of Carrying Amounts of Borrowings which Denominated in Currencies | The carrying amounts of the Group’s borrowings before the effect of derivatives (see notes 16 and 19 for further information on the impact of derivatives) are denominated in the following currencies: All figures in £ millions 2018 2017 US dollar 188 172 Sterling 23 1 Euro 506 911 Other 3 1 720 1,085 |
Summary of Maturity of the Group's Finance Lease Obligations | The maturity of the Group’s finance lease obligations is as follows: All figures in £ millions 2018 2017 Finance lease liabilities – minimum lease payments Not later than one year 3 4 Later than one year and not later than two years 1 3 Later than two years and not later than three years 1 1 Later than three years and not later than four years — — Later than four years and not later than five years — — Later than five years — — Future finance charges on finance leases — — Present value of finance lease liabilities 5 8 |
Summary of Present Value of Finance Lease Obligations | The present value of the Group’s finance lease obligations is as follows: All figures in £ millions 2018 2017 Not later than one year 3 4 Later than one year and not later than five years 2 4 Later than five years — — 5 8 |
Financial risk management (Tabl
Financial risk management (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Net Debt Position | The Group’s net debt position is set out below: All figures in £ millions 2018 2017 Cash and cash equivalents 568 645 Marketable securities — 8 Derivative financial instruments 9 — Bank loans and overdrafts (43 ) (15 ) Bonds (672 ) (1,062 ) Finance lease liabilities (5 ) (8 ) Net debt (143 ) (432 ) |
Summary of Sensitivity of The Carrying Value of Financial Instruments to Fluctuations in Interest Rates and Exchange Rates | As at 31 December 2018, the sensitivity of the carrying value of the Group’s financial instruments to fluctuations in interest rates and exchange rates is as follows: All figures in £ millions Carrying Impact of 1% Impact of 1% Impact of 10% Impact of 10% Investments in unlisted securities 93 — — (7 ) 9 Cash and cash equivalents 568 — — (36 ) 45 Derivative financial instruments 9 (3 ) 3 1 (1 ) Bonds (672 ) 17 (17 ) 61 (74 ) Other borrowings (48 ) — — 2 (3 ) Other net financial assets 620 — — (51 ) 62 Total financial instruments 570 14 (14 ) (30 ) 38 |
Schedule of Contractual Undiscounted Cash Flows Analysed by Maturity and Currency | The following table analyses the Group’s bonds and derivative assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. Short dated derivative instruments have not been included in this table. The amounts disclosed in the table are the contractual undiscounted cash flows (including interest) and as such may differ from the amounts disclosed on the balance sheet. Analysed by maturity Analysed by currency All figures in £ millions Greater than Later than Five years Total USD GBP Other Total At 31 December 2018 Bonds 14 431 277 722 189 — 533 722 Rate derivatives – inflows (20 ) (288 ) (343 ) (651 ) (40 ) (167 ) (444 ) (651 ) Rate derivatives – outflows 23 289 341 653 254 390 9 653 FX forwards – inflows (251 ) (35 ) — (286 ) — (286 ) — (286 ) FX forwards – outflows 275 37 — 312 312 — — 312 Total 41 434 275 750 715 (63 ) 98 750 At 31 December 2017 Bonds 20 601 533 1,154 184 — 970 1,154 Rate derivatives – inflows (38 ) (975 ) (684 ) (1,697 ) (53 ) (751 ) (893 ) (1,697 ) Rate derivatives – outflows 48 1,060 667 1,775 1,003 751 21 1,775 FX forwards – inflows — — — — — — — — FX forwards – outflows — — — — — — — — Total 30 686 516 1,232 1,134 — 98 1,232 |
Intangible assets - pre-publi_2
Intangible assets - pre-publication (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Intangible Assets Pre-publication | All figures in £ millions 2018 2017 Cost At beginning of year 1,854 2,417 Exchange differences 70 (168 ) Additions 328 362 Disposal through business disposal — (1 ) Disposals (158 ) (248 ) Transfer from property, plant and equipment 2 — Transfer to assets classified as held for sale — (508 ) At end of year 2,096 1,854 Amortisation At beginning of year (1,113 ) (1,393 ) Exchange differences (53 ) 109 Charge for the year (271 ) (338 ) Disposals 158 248 Transfer to assets classified as held for sale — 261 At end of year (1,279 ) (1,113 ) Carrying amounts At end of year 817 741 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Current Inventories | All figures in £ millions 2018 2017 Raw materials 5 4 Work in progress — 2 Finished goods 149 142 Returns asset 10 — 164 148 |
Trade and other receivables (Ta
Trade and other receivables (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Trade and Other Receivables | All figures in £ millions 2018 2017 Current Trade receivables 874 739 Royalty advances 5 8 Prepayments 103 82 Deferred contract costs 1 — Accrued income 2 1 Other receivables 193 280 1,178 1,110 Non-current Trade receivables 30 21 Royalty advances 21 20 Prepayments 13 15 Deferred contract costs 1 — Accrued income 10 10 Other receivables 25 37 100 103 |
Summary of Movements on Provision for Bad and Doubtful Debts | The movements in the provision for bad and doubtful debts are as follows: All figures in £ millions 2018 2017 At beginning of year (116 ) (112 ) Adjustment on initial application of IFRS 9 (see note 1c) (12 ) — Exchange differences 2 7 Income statement movements (1 ) (38 ) Utilised 31 21 Disposal through business disposal — 1 Transfer to assets classified as held for sale — 5 At end of year (96 ) (116 ) |
Summary of Ageing of Group's Trade Receivables | The ageing of the Group’s trade receivables is as follows: All figures in £ millions 2018 2017 Within due date 606 661 Up to three months past due date 172 187 Three to six months past due date 72 48 Six to nine months past due date 16 18 Nine to 12 months past due date 24 13 More than 12 months past due date 14 3 Total trade receivables 904 930 Less: sales return liability — (170 ) Net trade receivables 904 760 |
Provisions for other liabilit_2
Provisions for other liabilities and charges (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Provisions for Other Liabilities and Charges | All figures in £ millions Deferred Property Disposals Legal Total At 1 January 2018 45 3 11 21 80 Exchange differences 2 — — — 2 Charged to income statement — 103 — 3 106 Released to income statement — (2 ) — (5 ) (7 ) Utilised (5 ) (2 ) (5 ) (3 ) (15 ) Disposal through business disposal — — (1 ) — (1 ) At 31 December 2018 42 102 5 16 165 |
Summary of Analysis of Provisions | Analysis of provisions: 2018 All figures in £ millions Deferred Property Disposals Legal Total Current 6 2 5 7 20 Non-current 36 100 — 9 145 42 102 5 16 165 2017 Current 5 1 11 8 25 Non-current 40 2 — 13 55 45 3 11 21 80 |
Trade and other liabilities (Ta
Trade and other liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Trade and Other Liabilities | All figures in £ millions 2018 2017 Trade payables 311 265 Sales return liability 173 — Social security and other taxes 16 21 Accruals 397 447 Deferred income 387 322 Interest payable 46 45 Liability to purchase own shares — 151 Other liabilities 225 224 1,555 1,475 Less: non-current Accruals 15 26 Deferred income 66 35 Other liabilities 74 72 155 133 Current portion 1,400 1,342 |
Retirement benefit and other _2
Retirement benefit and other post-retirement obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Defined Plan Analysis | At 31 December 2018, the UK Group plan had approximately 24,000 members, analysed in the following table: All figures in % Active Deferred Pensioners Total Defined benefit 1 25 35 61 Defined contribution 9 30 — 39 Total 10 55 35 100 |
Summary of Principal Assumptions Used for UK Group Plan and US PRMB | The principal assumptions used for the UK Group plan and the US PRMB are shown below. Weighted average assumptions have been shown for the other plans, which primarily relate to US pension plans. 2018 2017 2016 All figures in % UK Group Other PRMB UK Group Other PRMB UK Group Other PRMB Inflation 3.3 1.6 1.5 3.2 1.6 1.5 3.3 1.6 1.5 Rate used to discount plan liabilities 2.8 4.0 4.1 2.5 3.0 3.0 2.5 3.8 3.9 Expected rate of increase in salaries 3.8 2.9 3.0 3.7 3.0 3.0 3.8 3.0 3.0 Expected rate of increase for pensions in payment and deferred pensions 2.1 to 5.1 — — 2.1 to 5.1 — — 2.2 to 5.1 — — Initial rate of increase in healthcare rate — — 7.0 — — 6.5 — — 6.8 Ultimate rate of increase in healthcare rate — — 5.5 — — 5.0 — — 5.0 |
Summary of Remaining Average Life Expectancy in Years of Pensioner Retiring at Age 65 | Using the above tables, the remaining average life expectancy in years of a pensioner retiring at age 65 on the balance sheet date for the UK Group plan and US plans is as follows: UK US All figures in years 2018 2017 2018 2017 Male 23.8 23.6 20.7 20.8 Female 24.5 25.7 22.7 22.8 The remaining average life expectancy in years of a pensioner retiring at age 65, 20 years after the balance sheet date, for the UK and US Group plans is as follows: UK US All figures in years 2018 2017 2018 2017 Male 25.4 25.7 22.3 22.5 Female 26.3 27.9 24.2 24.4 |
Summary of Amounts Recognised in Income Statement | The amounts recognised in the income statement are as follows: 2018 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 7 2 9 56 (1 ) 64 Past service cost 8 — 8 — — 8 Curtailments — — — — (11 ) (11 ) Administration expenses 6 — 6 — — 6 Total operating expense 21 2 23 56 (12 ) 67 Interest on plan assets (82 ) (5 ) (87 ) — — (87 ) Interest on plan liabilities 68 6 74 — 2 76 Net finance (income)/expense (14 ) 1 (13 ) — 2 (11 ) Net income statement charge 7 3 10 56 (10 ) 56 2017 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 8 1 9 57 (1 ) 65 Administration expenses 9 1 10 — — 10 Total operating expense 17 2 19 57 (1 ) 75 Interest on plan assets (84 ) (5 ) (89 ) — — (89 ) Interest on plan liabilities 77 7 84 — 2 86 Net finance (income)/expense (7 ) 2 (5 ) — 2 (3 ) Net income statement charge 10 4 14 57 1 72 2016 All figures in £ millions UK Group Defined Sub-total Defined PRMB Total Current service cost 8 2 10 67 — 77 Curtailments — — — — (2 ) (2 ) Administration expenses 6 — 6 — — 6 Total operating expense 14 2 16 67 (2 ) 81 Interest on plan assets (104 ) (6 ) (110 ) — — (110 ) Interest on plan liabilities 89 7 96 — 3 99 Net finance (income)/expense (15 ) 1 (14 ) — 3 (11 ) Net income statement charge (1 ) 3 2 67 1 70 |
Summary of Amounts Recognised in Balance Sheet | The amounts recognised in the balance sheet are as follows: 2018 2017 All figures in £ millions UK Group Other funded Other Total UK Group Other funded Other Total Fair value of plan assets 3,240 141 — 3,381 3,337 155 — 3,492 Present value of defined benefit obligation (2,671 ) (158 ) (19 ) (2,848 ) (2,792 ) (161 ) (20 ) (2,973 ) Net pension asset/(liability) 569 (17 ) (19 ) 533 545 (6 ) (20 ) 519 Other post-retirement medical benefit obligation (49 ) (67 ) Other pension accruals (13 ) (11 ) Net retirement benefit asset 471 441 Analysed as: Retirement benefit assets 571 545 Retirement benefit obligations (100 ) (104 ) |
Summary of Gains (Losses) Recognised in Other Comprehensive Income | The following gains have been recognised in other comprehensive income: All figures in £ millions 2018 2017 2016 Amounts recognised for defined benefit plans 16 175 (277 ) Amounts recognised for post-retirement medical benefit plans 6 — 9 Total recognised in year 22 175 (268 ) |
Summary of Fair Value of Plan Assets | The fair value of plan assets comprises the following: 2018 2017 All figures in % UK Group Other Total UK Group Other Total Insurance 28 1 29 29 — 29 Equities 1 1 2 1 1 2 Bonds — 2 2 — 3 3 Property 7 — 7 8 — 8 Pooled asset investment funds 44 — 44 44 — 44 Other 16 — 16 14 — 14 |
Summary of of Quoted and Non Quoted Market Price | The table below further disaggregates the plan assets into additional categories and those assets which have a quoted market price in an active market and those that do not: 2018 2017 All figures in % Quoted No quoted Quoted No quoted Insurance 29 — 29 — Non-UK — 2 — 2 Fixed-interest securities 2 — 3 — Property — 7 — 8 Pooled asset investment funds 44 — 44 — Other — 16 — 14 Total 75 25 76 24 |
Summary of Liquidity Profile of UK Group Plan Assets | The liquidity profile of the UK Group plan assets is as follows: All figures in % 2018 2017 Liquid – call <1 month 51 50 Less liquid – call 1–3 months — — Illiquid – call >3 months 49 50 |
Summary of Changes in Values of Plan Assets and Liabilities | Changes in the values of plan assets and liabilities of the retirement benefit plans are as follows: 2018 2017 All figures in £ millions UK Group Other Total UK Group Other Total Fair value of plan assets Opening fair value of plan assets 3,337 155 3,492 3,339 158 3,497 Exchange differences — 4 4 — (8 ) (8 ) Interest on plan assets 82 5 87 84 5 89 Return on plan assets excluding interest (45 ) (13 ) (58 ) (140 ) 10 (130 ) Contributions by employer 6 1 7 234 8 242 Benefits paid (140 ) (11 ) (151 ) (188 ) (18 ) (206 ) Other — — — 8 — 8 Closing fair value of plan assets 3,240 141 3,381 3,337 155 3,492 Present value of defined benefit obligation Opening defined benefit obligation (2,792 ) (181 ) (2,973 ) (3,181 ) (205 ) (3,386 ) Exchange differences — (3 ) (3 ) — 13 13 Current service cost (7 ) (2 ) (9 ) (8 ) (1 ) (9 ) Past service cost (8 ) — (8 ) — — — Administration expenses (6 ) — (6 ) (9 ) (1 ) (10 ) Interest on plan liabilities (68 ) (6 ) (74 ) (77 ) (7 ) (84 ) Actuarial gains/(losses) – experience (49 ) (2 ) (51 ) 126 6 132 Actuarial gains/(losses) – demographic (12 ) — (12 ) 133 1 134 Actuarial gains/(losses) – financial 131 6 137 44 (5 ) 39 Contributions by employee — — — — — — Other — — — (8 ) — (8 ) Benefits paid 140 11 151 188 18 206 Closing defined benefit obligation (2,671 ) (177 ) (2,848 ) (2,792 ) (181 ) (2,973 ) |
Summary of Changes in Value of US PRMB | Changes in the value of the US PRMB are as follows: All figures in £ millions 2018 2017 Opening defined benefit obligation (67 ) (77 ) Exchange differences (2 ) 5 Current service cost 1 1 Curtailments 11 — Interest on plan liabilities (2 ) (2 ) Actuarial gains/(losses) – experience 4 1 Actuarial gains/(losses) – demographic — 1 Actuarial gains/(losses) – financial 2 (2 ) Benefits paid 4 6 Closing defined benefit obligation (49 ) (67 ) |
Summary of Effect Percentage of Discount Rate Increase (Decrease) on Defined Benefit Obligation and Total Pension Expense | The effect of a one percentage point increase and decrease in the discount rate on the defined benefit obligation and the total pension expense is as follows: 2018 All figures in £ millions 1% 1% Effect: (Decrease)/increase in defined benefit obligation – UK Group plan (386 ) 522 (Decrease)/increase in defined benefit obligation – US plan (11 ) 13 The effect of members living one year more or one year less on the defined benefit obligation is as follows: 2018 All figures in £ millions One year One year Effect: Increase/(decrease) in defined benefit obligation – UK Group plan 143 (138 ) Increase/(decrease) in defined benefit obligation – US plan 7 (8 ) The effect of a half percentage point increase and decrease in the inflation rate is as follows: 2018 All figures in £ millions 0.5% 0.5% Effect: Increase/(decrease) in defined benefit obligation – UK Group plan 129 (114 ) Increase/(decrease) in defined benefit obligation – US plan — — |
Share-based payments (Tables)
Share-based payments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Charges in Income Statement in Respect of Equity-settled Share-based Payment Plans | The Group recognised the following charges in the income statement in respect of its equity-settled share-based payment plans: All figures in £ millions 2018 2017 2016 Pearson plans 37 33 22 |
Summary of Number and Weighted Average Exercise Prices of Share Options Granted under Group's Plans | The number and weighted average exercise prices of share options granted under the Group’s plans are as follows: 2018 2017 Number of Weighted average Number of Weighted average Outstanding at beginning of year 2,981 6.84 2,978 8.14 Granted during the year 729 5.80 1,619 5.50 Exercised during the year (70 ) 6.57 (9 ) 7.00 Forfeited during the year (668 ) 7.58 (1,451 ) 8.04 Expired during the year (244 ) 8.19 (156 ) 9.09 Outstanding at end of year 2,728 5.76 2,981 6.84 Options exercisable at end of year 169 11.31 350 8.18 |
Summary of Weighted Average Remaining Contractual Lives and Exercise Prices of Options Outstanding | The options outstanding at the end of the year have weighted average remaining contractual lives and exercise prices as follows: 2018 2017 Range of exercise prices £ Number of Weighted average Number of Weighted average 5–10 2,553 2.29 2,697 2.52 >10 175 0.29 284 1.24 2,728 2.16 2,981 2.40 |
Summary of Weighted Average Estimated Fair Values and Inputs into Black-Scholes Model | The weighted average estimated fair values and the inputs into the Black–Scholes model are as follows: 2018 2017 Fair value £ 1.88 £ 1.24 Weighted average share price £ 7.49 £ 6.83 Weighted average exercise price £ 5.80 £ 5.50 Expected volatility 35.78 % 34.75 % Expected life 3.7 years 3.7 years Risk-free rate 0.87 % 0.20 % Expected dividend yield 5.21 % 7.61 % Forfeiture rate 3.2 % 3.2 % |
Summary of Weighted Average Estimated Fair Values and Inputs into Black-Scholes Model | The following shares were granted under restricted share arrangements: 2018 2017 Number of Weighted average Number of Weighted average Long-Term Incentive Plan 2,907 7.55 6,453 6.61 Management Incentive Plan 2,035 7.45 — — |
Share capital and share premi_2
Share capital and share premium (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Share Capital and Share Premium | Number of Share Share At 1 January 2017 822,127 205 2,597 Issue of ordinary shares – share option schemes 923 — 5 Purchase of own shares (20,996 ) (5 ) — At 31 December 2017 802,054 200 2,602 Issue of ordinary shares – share option schemes 864 1 5 Purchase of own shares (21,840 ) (6 ) — At 31 December 2018 781,078 195 2,607 |
Treasury shares (Tables)
Treasury shares (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Treasury Shares | Treasury shares Pearson plc Number of £m At 1 January 2017 7,719 79 Purchase of treasury shares — — Release of treasury shares (1,725 ) (18 ) At 31 December 2017 5,994 61 Purchase of treasury shares — — Release of treasury shares (2,769 ) (28 ) At 31 December 2018 3,225 33 |
Other comprehensive income (Tab
Other comprehensive income (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Other Comprehensive Income | 2018 Attributable to equity holders of the company Non- controlling Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign operations – Group — 91 — 91 — 91 Net exchange differences on translation of foreign operations – associates — (1 ) — (1 ) — (1 ) Currency translation adjustment disposed — (4 ) — (4 ) — (4 ) Attributable tax — — (4 ) (4 ) — (4 ) Items that are not reclassified to the income statement Fair value gain on other financial assets 8 — — 8 — 8 Attributable tax — — — — — — Remeasurement of retirement benefit obligations – Group — — 22 22 — 22 Remeasurement of retirement benefit obligations – associates — — 3 3 — 3 Attributable tax — — 9 9 — 9 Other comprehensive income/(expense) for the year 8 86 30 124 — 124 2017 Attributable to equity holders of the company Non- controlling Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign operations – Group — (158 ) — (158 ) — (158 ) Net exchange differences on translation of foreign operations – associates — (104 ) — (104 ) — (104 ) Currency translation adjustment disposed — (51 ) — (51 ) — (51 ) Attributable tax — — 9 9 — 9 Items that are not reclassified to the income statement Fair value gain on other financial assets 13 — — 13 — 13 Attributable tax — — (4 ) (4 ) — (4 ) Remeasurement of retirement benefit obligations – Group — — 175 175 — 175 Remeasurement of retirement benefit obligations – associates — — 7 7 — 7 Attributable tax — — (42 ) (42 ) — (42 ) Other comprehensive income/(expense) for the year 13 (313 ) 145 (155 ) — (155 ) 2016 Attributable to equity holders of the company Non- Total All figures in £ millions Fair value Translation Retained Total Items that may be reclassified to the income statement Net exchange differences on translation of foreign — 909 — 909 1 910 Net exchange differences on translation of foreign — 3 — 3 — 3 Currency translation adjustment disposed — — — — — — Attributable tax — — (5 ) (5 ) — (5 ) Items that are not reclassified to the income statement Fair value gain on other financial assets — — — — — — Attributable tax — — — — — — Remeasurement of retirement benefit obligations – Group — — (268 ) (268 ) — (268 ) Remeasurement of retirement benefit obligations – associates — — (8 ) (8 ) — (8 ) Attributable tax — — 58 58 — 58 Other comprehensive income/(expense) for the year — 912 (223 ) 689 1 690 |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Cash Flow on Acquisitions | All figures in £ millions 2018 2017 2016 Cash flow on acquisitions Deferred payments for prior year acquisitions and other items (5 ) (11 ) (7 ) Cash – current year acquisitions — — (7 ) Acquisition costs and other acquisition liabilities paid — — (1 ) Net cash outflow (5 ) (11 ) (15 ) |
Disposals (Tables)
Disposals (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Schedule of Disposals Including Business Closures | 2018 2017 2016 All figures in £ millions Notes WSE UTEL Other Total Total Total Disposal of subsidiaries and associates Property, plant and equipment (17 ) — — (17 ) (7 ) (3 ) Intangible assets (15 ) — (2 ) (17 ) (9 ) — Investments in joint ventures and associates — (3 ) — (3 ) (352 ) — Net deferred income tax assets — — — — (3 ) (10 ) Intangible assets – pre-publication (8 ) — — (8 ) (1 ) (4 ) Inventories (1 ) — — (1 ) (2 ) — Trade and other receivables (30 ) — — (30 ) (16 ) (6 ) Current income tax receivable — — — — (5 ) — Cash and cash equivalents (excluding overdrafts) (119 ) — — (119 ) (13 ) (9 ) Net deferred income tax liabilities 16 — — 16 — — Trade and other liabilities 171 — 1 172 34 21 Provisions for other liabilities and charges 23 — — 1 1 — — Cumulative currency translation adjustment 29 4 — — 4 51 — Net (assets)/liabilities disposed 1 (3 ) — (2 ) (323 ) (11 ) Cash received 212 22 9 243 468 7 Deferred proceeds — — 2 2 — — Fair value of financial asset acquired — — 3 3 — — Costs (6 ) — (10 ) (16 ) (17 ) (16 ) Gain on disposal 207 19 4 230 128 (20 ) All figures in £ millions 2018 2017 2016 Cash flow from disposals Cash – current year disposals 243 468 11 Cash and cash equivalents disposed (119 ) (13 ) (9 ) Costs and other disposal liabilities paid (23 ) (25 ) (52 ) Net cash inflow 101 430 (50 ) Analysed as: Cash inflow/ from sale of subsidiaries 83 19 (54 ) Cash inflow from sale of joint ventures and associates 18 411 4 |
Held for sale (Tables)
Held for sale (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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Summary of Assets and Liabilities | Held for sale assets and liabilities in 2018 relate to the K12 school courseware business in the US (K12). Following the decision in 2017 to sell both the Wall Street English language teaching business (WSE) and the K12 business, the assets and liabilities of those businesses were classified as held for sale on the balance sheet at 31 December 2017. During 2018 WSE was sold and the K12 business remains on the balance sheet as a held for sale asset prior to the disposal announced in February 2019 (see note 37). 2018 2017 All figures in £ millions Notes Total Total Non-current Property, plant and equipment — 16 Intangible assets 168 181 Deferred income tax assets 98 68 Trade and other receivables 25 27 291 292 Current assets Intangible assets – pre-publication 242 247 Inventories 55 46 Trade and other receivables 60 48 Cash and cash equivalents (excluding overdrafts) 17 — 127 357 468 Assets classified as held for sale 648 760 Non-current Deferred income tax liabilities — (2 ) Other liabilities (371 ) (284 ) (371 ) (286 ) Current liabilities Trade and other liabilities (202 ) (302 ) (202 ) (302 ) Liabilities classified as held for sale (573 ) (588 ) Net assets classified as held for sale 75 172 |
Cash generated from operations
Cash generated from operations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Summary of Cash Generated from Operations | All figures in £ millions Notes 2018 2017 2016 Profit 590 408 (2,335 ) Adjustments for: Income tax (92 ) 13 (222 ) Depreciation 10 66 90 95 Amortisation and impairment of acquired intangibles and goodwill 11 99 138 2,733 Amortisation of software 11 88 85 84 Net finance costs 6 55 30 60 Charges relating to GMP equalisation 8 — — Share of results of joint ventures and associates 12 (44 ) (78 ) (97 ) Profit on disposal of subsidiaries, associates, investments and fixed assets (315 ) (116 ) 40 Net foreign exchange adjustment from transactions 28 (26 ) 43 Share-based payment costs 26 37 33 22 Pre-publication (37 ) (35 ) (19 ) Inventories (10 ) 24 17 Trade and other receivables (15 ) 133 156 Trade and other liabilities 35 6 61 Retirement benefit obligations (9 ) (232 ) (106 ) Provisions for other liabilities and charges 63 (11 ) (10 ) Net cash generated from operations 547 462 522 |
Summary of Proceeds from Sale of Property, Plant and Equipment | In the cash flow statement, proceeds from sale of property, plant and equipment comprise: All figures in £ millions 2018 2017 2016 Net book amount 41 12 9 Profit/(loss) on sale of property, plant and equipment 87 (12 ) (5 ) Proceeds from sale of property, plant and equipment 128 — 4 |
Summary of Current and Non-current Borrowings | The movements in the Group’s current and non-current All figures in £ millions 2017 Financing Foreign Fair value 2018 Financial liabilities Non-current 1,066 (441 ) 10 8 643 Current borrowings 4 (1 ) 22 — 25 Total 1,070 (442 ) 32 8 668 2016 Financing Foreign Fair value 2017 Financial liabilities Non-current borrowings 2,517 (1,292 ) (149 ) (10 ) 1,066 Current borrowings 9 (7 ) (1 ) 3 4 Total 2,526 (1,299 ) (150 ) (7 ) 1,070 2015 Financing Foreign Fair value 2016 Financial liabilities Non-current borrowings 2,106 (3 ) 416 (2 ) 2,517 Current borrowings 247 (248 ) 5 5 9 Total 2,353 (251 ) 421 3 2,526 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Summary of Future Aggregate Minimum Lease Payments in Respect of Operating Leases | The future aggregate minimum lease payments in respect of operating leases are as follows: All figures in £ millions 2018 2017 Not later than one year 143 156 Later than one year and not later than two years 130 139 Later than two years and not later than three years 115 121 Later than three years and not later than four years 101 100 Later than four years and not later than five years 91 86 Later than five years 595 599 1,175 1,201 |
Summary of Future Aggregate Minimum Sub-lease Payments Expected to Received under Non-cancellable Sub-leases | warehouses it will enter into sub-lease sub-lease non-cancellable sub-leases All figures in £ millions 2018 2017 Not later than one year 51 45 Later than one year and not later than two years 44 45 Later than two years and not later than three years 41 40 Later than three years and not later than four years 39 35 Later than four years and not later than five years 35 33 Later than five years 124 138 334 336 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Text block [abstract] | |
Summary of Key Management Personnel Compensation | Key management personnel are deemed to be the members of the Pearson executive. It is this Committee which had responsibility for planning, directing and controlling the activities of the Group in 2018. Key management personnel compensation is disclosed below: All figures in £ millions 2018 2017 Short-term employee benefits 6 12 Retirement benefits 1 1 Share-based payment costs 7 2 Total 14 15 |
Accounting Policies - Additiona
Accounting Policies - Additional Information (Detail) | Jan. 01, 2018GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) |
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Depreciation | £ 66,000,000 | £ 90,000,000 | £ 95,000,000 | |
Amortisation period | Greater than one year | |||
Increase trade and other receivables | £ 170,000,000 | £ (15,000,000) | 133,000,000 | 156,000,000 |
Increase trade and other liabilities | 182,000,000 | 35,000,000 | £ 6,000,000 | £ 61,000,000 |
Increase inventory returns asset within inventory | 12,000,000 | |||
Increase held for sale assets | 13,000,000 | |||
Increase held for sale liabilities | £ 13,000,000 | |||
Estimated sales and profit before income tax | 2,000,000 | |||
Impact of IFRS 16 leases [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Estimated Lease Liabilities | 910,000,000 | |||
Right Of Use Assets | 435,000,000 | |||
Additional Lease Receivables | 215,000,000 | |||
Decrease In Value Of Net Assets | 100,000,000 | |||
Estimated Reduction Value Of Profit Loss Before Tax | 10,000,000 | |||
Estimated Increase In Profit Loss From Operating Activities | 20,000,000 | |||
Estimated Increase In Finance Costs | £ 30,000,000 | |||
Sterling [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Average foreign exchange rate | 1.34 | 1.30 | ||
Year end foreign exchange rate | 1.27 | 1.35 | 1.23 | |
Non-current assets or disposal groups classified as held for sale [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Depreciation | £ 0 | |||
Bottom of range [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Percentage of voting rights held in associate | 20.00% | |||
Bottom of range [member] | Software [member] | Not internally generated [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 3 years | |||
Bottom of range [member] | Internally developed software [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 3 years | |||
Bottom of range [member] | Acquired intangible assets [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 2 years | |||
Bottom of range [member] | Pre-publication assets [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 0 years | |||
Top of range [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Percentage of voting rights held in associate | 50.00% | |||
Top of range [member] | Software [member] | Not internally generated [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 8 years | |||
Top of range [member] | Internally developed software [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 8 years | |||
Top of range [member] | Acquired intangible assets [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 20 years | |||
Top of range [member] | Pre-publication assets [member] | ||||
Disclosure of Summary of Significant Accounting Policies [Line items] | ||||
Useful lives of intangible assets | 5 years |
Accounting Policies - Estimated
Accounting Policies - Estimated Useful Lives of Property, Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Buildings (freehold) [member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 20 years |
Buildings (freehold) [member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 50 years |
Buildings (leasehold) [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | over the period of the lease |
Plant and equipment [member] | Bottom of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 3 years |
Plant and equipment [member] | Top of range [member] | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Estimated useful lives | 10 years |
Accounting Policies - Schedule
Accounting Policies - Schedule of Impact of IFRS 15 Adoption Recognised as a Decrease to Retained Earnings with Correspond Decrease in Net Assets (Detail) - GBP (£) £ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure Of Impact Of Ifrs15 Adoption Recognised As Decrease To Retained Earnings With Correspond Decrease In Net Assets [line items] | ||||
Sales | £ 4,129 | £ 4,513 | £ 4,552 | |
Retained earnings | ||||
Online Program Management (OPM) marketing | (233) | (229) | (217) | |
Administration fees | (6) | (10) | (6) | |
Income tax | 92 | (13) | 222 | |
Operating profit | 553 | 451 | (2,497) | |
Profit before tax | 498 | 421 | (2,557) | |
Income tax | 92 | (13) | 222 | |
Profit for the year | 590 | 408 | (2,335) | |
Other comprehensive income/(expense) for the year | 124 | (155) | 690 | |
Total comprehensive income for the year | 714 | 253 | £ (1,645) | |
Current assets | ||||
Inventories | 164 | 148 | ||
Trade and other receivables | 1,178 | 1,110 | ||
Assets classified as held for sale | 648 | |||
Non-current liabilities | ||||
Deferred income tax liabilities | (136) | (164) | ||
Current liabilities | ||||
Trade and other liabilities | (1,400) | (1,342) | ||
Liabilities classified as held for sale | (573) | |||
Net assets | 4,525 | £ 4,021 | ||
Translation adjustment [member] | ||||
Retained earnings | ||||
Unexercised customer rights (or breakage) | £ (103) | |||
Online Program Management (OPM) marketing | (38) | |||
Administration fees | (2) | |||
Commissions | 1 | |||
Income tax | 34 | |||
Total impact at 1 January 2018 | (108) | |||
Income tax | 34 | |||
Current assets | ||||
Inventories | 12 | 12 | ||
Trade and other receivables | 133 | 133 | ||
Assets classified as held for sale | 31 | 31 | ||
Non-current liabilities | ||||
Deferred income tax liabilities | 16 | 16 | ||
Current liabilities | ||||
Trade and other liabilities | (215) | (215) | ||
Liabilities classified as held for sale | (85) | (85) | ||
Net assets | (108) | |||
Total impact at 1 January 2018 | £ (108) | |||
Amounts pre IFRS 15 [member] | ||||
Disclosure Of Impact Of Ifrs15 Adoption Recognised As Decrease To Retained Earnings With Correspond Decrease In Net Assets [line items] | ||||
Sales | 4,120 | |||
Retained earnings | ||||
Income tax | 94 | |||
Operating profit | 544 | |||
Profit before tax | 489 | |||
Income tax | 94 | |||
Profit for the year | 583 | |||
Other comprehensive income/(expense) for the year | 130 | |||
Total comprehensive income for the year | 713 | |||
Current assets | ||||
Inventories | 154 | |||
Trade and other receivables | 1,058 | |||
Assets classified as held for sale | 630 | |||
Non-current liabilities | ||||
Deferred income tax liabilities | (154) | |||
Current liabilities | ||||
Trade and other liabilities | (1,193) | |||
Liabilities classified as held for sale | (507) | |||
Net assets | 4,632 | |||
In period adjustment [member] | ||||
Disclosure Of Impact Of Ifrs15 Adoption Recognised As Decrease To Retained Earnings With Correspond Decrease In Net Assets [line items] | ||||
Sales | 9 | |||
Retained earnings | ||||
Income tax | (2) | |||
Operating profit | 9 | |||
Profit before tax | 9 | |||
Income tax | (2) | |||
Profit for the year | 7 | |||
Other comprehensive income/(expense) for the year | (6) | |||
Total comprehensive income for the year | 1 | |||
Current assets | ||||
Inventories | (2) | |||
Trade and other receivables | (13) | |||
Assets classified as held for sale | (13) | |||
Non-current liabilities | ||||
Deferred income tax liabilities | 2 | |||
Current liabilities | ||||
Trade and other liabilities | 8 | |||
Liabilities classified as held for sale | 19 | |||
Net assets | £ 1 |
Accounting Policies - Schedul_2
Accounting Policies - Schedule of Impact of IFRS 9 Adoption Recognised as a Decrease to Retained Earnings with Correspond Decrease in Net Assets (Detail) - GBP (£) £ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Retained earnings | ||||
Income tax | £ 92 | £ (13) | £ 222 | |
Non-current assets | ||||
Deferred income tax assets | (60) | (95) | ||
Current assets | ||||
Trade and other receivables | (1,178) | £ (1,110) | ||
Assets classified as held for sale | £ (648) | |||
Increase (decrease) due to application of IFRS 9 [member] | ||||
Retained earnings | ||||
Provision for losses against trade debtors | £ (13) | |||
Income tax | 3 | |||
Total impact at 1 January 2018 | (10) | |||
Non-current assets | ||||
Deferred income tax assets | 3 | |||
Current assets | ||||
Trade and other receivables | (12) | |||
Assets classified as held for sale | (1) | |||
Total impact at 1 January 2018 | £ (10) |
Accounting Policies - Summary o
Accounting Policies - Summary of Classification and Measurement Categories of Financial Assets and Liabilities Under IAS 39 and the New Classification and Measurement Categories Under IFRS 9 (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Investments in unlisted securities [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Available for sale - fair value |
New classification and measurement under IFRS 9 | Fair value through OCI |
Cash and cash equivalents [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Loans and receivables - amortised cost |
New classification and measurement under IFRS 9 | Financial assets at amortised cost |
Marketable securities [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Available for sale - fair value |
New classification and measurement under IFRS 9 | Fair value through profit or loss |
Derivative financial instruments used for hedging [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Derivatives in a hedge relationship - fair value |
New classification and measurement under IFRS 9 | Fair value - hedging instrument |
Derivative financial instruments used for hedging [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Derivatives in a hedge relationship - fair value |
New classification and measurement under IFRS 9 | Fair value - hedging instrument |
Other derivative financial instruments [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Held for trading - fair value |
New classification and measurement under IFRS 9 | Fair value through profit or loss |
Other derivative financial instruments [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Held for trading - fair value |
New classification and measurement under IFRS 9 | Fair value through profit or loss |
Trade receivables [member] | Financial assets, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Loans and receivables - amortised cost |
New classification and measurement under IFRS 9 | Financial assets at amortised cost |
Trade payables [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Other liabilities - amortised cost |
New classification and measurement under IFRS 9 | Other financial liabilities - amortised cost |
Liability to purchase own shares [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Other liabilities - amortised cost |
New classification and measurement under IFRS 9 | Other financial liabilities - amortised cost |
Bank loans and overdrafts [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Other liabilities - amortised cost |
New classification and measurement under IFRS 9 | Other financial liabilities - amortised cost |
Finance lease liabilities [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Other liabilities - amortised cost |
New classification and measurement under IFRS 9 | Other financial liabilities - amortised cost |
Bonds [member] | Financial liabilities, class [member] | |
Disclosure of aanalysis of financial assets and liabilities [line items] | |
Original classification and measurement under IAS 39 | Other liabilities - amortised cost |
New classification and measurement under IFRS 9 | Other financial liabilities - amortised cost |
Segment Information - Schedule
Segment Information - Schedule of Segment Reporting Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of operating segments [line items] | |||
Sales | £ 4,129 | £ 4,513 | £ 4,552 |
Adjusted operating profit | 546 | 576 | 635 |
Cost of major restructuring | (102) | (79) | (338) |
Intangible charges | (113) | (166) | (2,769) |
Other net gains and losses | 230 | 128 | (25) |
UK pension GMP equalisation | (8) | ||
Impact of US tax reform | (8) | ||
Operating (loss)/profit | 553 | 451 | (2,497) |
Finance costs | (91) | (110) | (97) |
Finance income | 36 | 80 | 37 |
Loss before tax | 498 | 421 | (2,557) |
Income tax | 92 | (13) | 222 |
Earnings/(loss) for the year from continuing operations | 590 | 408 | (2,335) |
Assets | 7,905 | 7,888 | 10,066 |
Share of results of joint ventures and associates | 44 | 78 | 97 |
Capital expenditure | 196 | 240 | 246 |
Pre-publication investment | 388 | 361 | 395 |
Depreciation | 66 | 90 | 95 |
Amortisation | 525 | 561 | 619 |
Impairment | 2,548 | ||
Continuing operation [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 4,129 | 4,513 | 4,552 |
Continuing operation [member] | Corporate [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 636 | 793 | 1,640 |
Continuing operation [member] | Penguin Random House [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Adjusted operating profit | 68 | 94 | 129 |
Cost of major restructuring | (8) | (9) | |
Intangible charges | (14) | (28) | (36) |
Other net gains and losses | 96 | ||
Impact of US tax reform | (8) | ||
Operating (loss)/profit | 46 | 154 | 84 |
Assets | 387 | 388 | 1,240 |
Share of results of joint ventures and associates | 46 | 71 | 98 |
North America [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 2,784 | 2,929 | 2,981 |
North America [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 2,784 | 2,929 | 2,981 |
Adjusted operating profit | 362 | 394 | 420 |
Cost of major restructuring | (78) | (60) | (172) |
Intangible charges | (72) | (89) | (2,684) |
Other net gains and losses | 4 | (3) | (12) |
Operating (loss)/profit | 216 | 242 | (2,448) |
Assets | 4,366 | 4,120 | 4,860 |
Share of results of joint ventures and associates | (4) | 5 | (1) |
Capital expenditure | 135 | 162 | 153 |
Pre-publication investment | 234 | 218 | 235 |
Depreciation | 41 | 56 | 56 |
Amortisation | 344 | 348 | 394 |
Impairment | 2,548 | ||
Core [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 806 | 815 | 803 |
Core [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 806 | 815 | 803 |
Adjusted operating profit | 57 | 50 | 57 |
Cost of major restructuring | (16) | (11) | (62) |
Intangible charges | (8) | (12) | (16) |
Other net gains and losses | (12) | ||
UK pension GMP equalisation | (8) | ||
Operating (loss)/profit | 25 | 27 | (33) |
Assets | 1,980 | 1,917 | 1,465 |
Share of results of joint ventures and associates | 1 | 1 | 1 |
Capital expenditure | 25 | 35 | 42 |
Pre-publication investment | 90 | 84 | 92 |
Depreciation | 12 | 13 | 12 |
Amortisation | 92 | 103 | 109 |
Growth [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 539 | 769 | 768 |
Growth [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 539 | 769 | 768 |
Adjusted operating profit | 59 | 38 | 29 |
Cost of major restructuring | (8) | (95) | |
Intangible charges | (19) | (37) | (33) |
Other net gains and losses | 226 | 35 | (1) |
Operating (loss)/profit | 266 | 28 | (100) |
Assets | 536 | 670 | 861 |
Share of results of joint ventures and associates | 1 | 1 | (1) |
Capital expenditure | 36 | 43 | 51 |
Pre-publication investment | 64 | 59 | 68 |
Depreciation | 13 | 21 | 27 |
Amortisation | 89 | 110 | 116 |
Segments assets [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 7,513 | 7,490 | 8,819 |
Segments assets [member] | Continuing operation [member] | Corporate [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 636 | 793 | 1,640 |
Segments assets [member] | North America [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 4,366 | 4,116 | 4,859 |
Segments assets [member] | Core [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 1,975 | 1,914 | 1,461 |
Segments assets [member] | Growth [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 536 | 667 | 859 |
Joint ventures [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 3 | 2 | |
Joint ventures [member] | Growth [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 3 | 2 | |
Associates [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 392 | 395 | 1,245 |
Associates [member] | Penguin Random House [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 2,775 | 2,693 | |
Associates [member] | Continuing operation [member] | Penguin Random House [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 387 | 388 | 1,240 |
Associates [member] | North America [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | 4 | 1 | |
Associates [member] | Core [member] | Continuing operation [member] | Operating segments [member] | |||
Disclosure of operating segments [line items] | |||
Assets | £ 5 | £ 3 | £ 4 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) - GBP (£) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of operating segments [line items] | |||
Pre-publication investment | £ 388,000,000 | £ 361,000,000 | £ 395,000,000 |
Amortisation | 525,000,000 | 561,000,000 | 619,000,000 |
Sales | 4,129,000,000 | 4,513,000,000 | 4,552,000,000 |
Cost of major restructuring incurred | 102,000,000 | 79,000,000 | 338,000,000 |
onerous leases | 91,000,000 | ||
Profit from sale of property | 81,000,000 | ||
Intangible amortisation charges | 113,000,000 | 166,000,000 | 2,769,000,000 |
Impairment of goodwill | 2,548,000,000 | ||
Other gains and losses | 230,000,000 | 128,000,000 | (25,000,000) |
Profit on sale of test preparation business | 44,000,000 | ||
Other gains and losses | 96,000,000 | ||
Share of profit from associates adversely impacted | 8,000,000 | ||
Property, plant and equipment and intangible assets acquired through business combination | 0 | ||
WSE [member] | |||
Disclosure of operating segments [line items] | |||
Other gains and losses | 207,000,000 | ||
UTEL [member] | |||
Disclosure of operating segments [line items] | |||
Other gains and losses | 19,000,000 | ||
Other smaller disposal items [member] | |||
Disclosure of operating segments [line items] | |||
Other gains and losses | 4,000,000 | ||
North America [member] | |||
Disclosure of operating segments [line items] | |||
Sales | 2,784,000,000 | 2,929,000,000 | 2,981,000,000 |
North America [member] | Pre-publication investment [member] | |||
Disclosure of operating segments [line items] | |||
Pre-publication investment | 60,000,000 | ||
North America [member] | Amortisation [member] | |||
Disclosure of operating segments [line items] | |||
Amortisation | 67,000,000 | ||
North America [member] | Goodwill [member] | |||
Disclosure of operating segments [line items] | |||
Impairment of goodwill | 2,548,000,000 | ||
Inter-segment amounts [member] | |||
Disclosure of operating segments [line items] | |||
Sales | £ 0 | £ 0 | £ 0 |
Segment Information - Summary o
Segment Information - Summary of Operating Segments in Geographic Areas (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of geographical areas [line items] | |||
Sales | £ 4,129 | £ 4,513 | £ 4,552 |
Continuing operation [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 4,129 | 4,513 | 4,552 |
Non-current assets | 3,738 | 3,746 | |
Continuing operation [member] | UK [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 377 | 384 | 393 |
Non-current assets | 900 | 796 | |
Continuing operation [member] | Other European countries [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 246 | 262 | 255 |
Non-current assets | 143 | 128 | |
Continuing operation [member] | United States [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 2,627 | 2,770 | 2,829 |
Non-current assets | 2,162 | 2,247 | |
Continuing operation [member] | Canada [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 126 | 126 | 118 |
Non-current assets | 250 | 240 | |
Continuing operation [member] | Asia Pacific [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 455 | 643 | 632 |
Non-current assets | 146 | 151 | |
Continuing operation [member] | Other countries [member] | |||
Disclosure of geographical areas [line items] | |||
Sales | 298 | 328 | £ 325 |
Non-current assets | £ 137 | £ 184 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Analysis of Group's Revenue Streams (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 4,129 | £ 4,513 | £ 4,552 |
Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 2,039 | 2,188 | 2,200 |
Courseware [member] | School courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 677 | 704 | 718 |
Courseware [member] | Higher education courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,186 | 1,302 | 1,299 |
Courseware [member] | English courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 176 | 182 | 183 |
Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,345 | 1,365 | 1,344 |
Assessments [member] | School and higher education assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 602 | 634 | 667 |
Assessments [member] | Clinical Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 185 | 192 | 183 |
Assessments [member] | Professional and English Certification [Member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 558 | 539 | 494 |
Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 745 | 960 | 1,008 |
Services [member] | School Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 337 | 333 | 319 |
Services [member] | Higher Education Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 313 | 319 | 344 |
Services [member] | English Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 95 | 308 | 345 |
North America [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 2,784 | 2,929 | 2,981 |
North America [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,436 | 1,560 | 1,586 |
North America [member] | Courseware [member] | School courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 378 | 394 | 418 |
North America [member] | Courseware [member] | Higher education courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,042 | 1,146 | 1,147 |
North America [member] | Courseware [member] | English courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 16 | 20 | 21 |
North America [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 816 | 842 | 854 |
North America [member] | Assessments [member] | School and higher education assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 332 | 355 | 378 |
North America [member] | Assessments [member] | Clinical Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 140 | 146 | 143 |
North America [member] | Assessments [member] | Professional and English Certification [Member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 344 | 341 | 333 |
North America [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 532 | 527 | 541 |
North America [member] | Services [member] | School Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 288 | 274 | 259 |
North America [member] | Services [member] | Higher Education Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 244 | 253 | 269 |
North America [member] | Services [member] | English Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 13 | ||
Core [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 806 | 815 | 803 |
Core [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 317 | 324 | 330 |
Core [member] | Courseware [member] | School courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 172 | 171 | 173 |
Core [member] | Courseware [member] | Higher education courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 87 | 93 | 92 |
Core [member] | Courseware [member] | English courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 58 | 60 | 65 |
Core [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 442 | 440 | 420 |
Core [member] | Assessments [member] | School and higher education assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 247 | 256 | 268 |
Core [member] | Assessments [member] | Clinical Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 45 | 46 | 40 |
Core [member] | Assessments [member] | Professional and English Certification [Member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 150 | 138 | 112 |
Core [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 47 | 51 | 53 |
Core [member] | Services [member] | School Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 2 | 5 | 6 |
Core [member] | Services [member] | Higher Education Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 40 | 34 | 29 |
Core [member] | Services [member] | English Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 5 | 12 | 18 |
Growth [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 539 | 769 | 768 |
Growth [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 286 | 304 | 284 |
Growth [member] | Courseware [member] | School courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 127 | 139 | 127 |
Growth [member] | Courseware [member] | Higher education courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 57 | 63 | 60 |
Growth [member] | Courseware [member] | English courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 102 | 102 | 97 |
Growth [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 87 | 83 | 70 |
Growth [member] | Assessments [member] | School and higher education assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 23 | 23 | 21 |
Growth [member] | Assessments [member] | Professional and English Certification [Member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 64 | 60 | 49 |
Growth [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 166 | 382 | 414 |
Growth [member] | Services [member] | School Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 47 | 54 | 54 |
Growth [member] | Services [member] | Higher Education Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 29 | 32 | 46 |
Growth [member] | Services [member] | English Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 90 | £ 296 | £ 314 |
Revenue From Contracts With C_4
Revenue From Contracts With Customers - Summary of transfer of goods and services over time and at a point in time (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 4,129 | £ 4,513 | £ 4,552 |
Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 2,039 | 2,188 | 2,200 |
Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,345 | 1,365 | 1,344 |
Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 745 | 960 | 1,008 |
Goods or services transferred at point in time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 217 | ||
Goods or services transferred at point in time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 64 | ||
Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 776 | ||
Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,128 | ||
Goods or services transferred over time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 681 | ||
sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,228 | ||
Other [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 35 | ||
North America [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 2,784 | 2,929 | 2,981 |
North America [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 1,436 | 1,560 | 1,586 |
North America [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 816 | 842 | 854 |
North America [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 532 | 527 | 541 |
North America [member] | Goods or services transferred at point in time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 146 | ||
North America [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 718 | ||
North America [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 670 | ||
North America [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 532 | ||
North America [member] | sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 718 | ||
Core [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 806 | 815 | 803 |
Core [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 317 | 324 | 330 |
Core [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 442 | 440 | 420 |
Core [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 47 | 51 | 53 |
Core [member] | Goods or services transferred at point in time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 65 | ||
Core [member] | Goods or services transferred at point in time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 26 | ||
Core [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 4 | ||
Core [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 377 | ||
Core [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 21 | ||
Core [member] | sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 313 | ||
Growth [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 539 | 769 | 768 |
Growth [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 286 | 304 | 284 |
Growth [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 87 | 83 | 70 |
Growth [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 166 | £ 382 | £ 414 |
Growth [member] | Goods or services transferred at point in time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 6 | ||
Growth [member] | Goods or services transferred at point in time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 38 | ||
Growth [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 54 | ||
Growth [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 81 | ||
Growth [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 128 | ||
Growth [member] | sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | 197 | ||
Growth [member] | Other [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of disaggregation of revenue from contracts with customers [line items] | |||
Revenue | £ 35 |
Revenue From Contracts With C_5
Revenue From Contracts With Customers - Summary of remaining transaction price on unsatisfied or partially unsatisfied performance obligations from contracts with customers (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | £ 4,129 | £ 4,513 | £ 4,552 |
Deferred income | 912 | ||
Committed sales | 555 | ||
Remaining transaction price | 1,467 | ||
Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 2,039 | 2,188 | 2,200 |
Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 1,345 | 1,365 | 1,344 |
Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 745 | £ 960 | £ 1,008 |
Goods or services transferred at point in time [member] | Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 217 | ||
Goods or services transferred at point in time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 64 | ||
Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 776 | ||
Deferred income | 679 | ||
Committed sales | 8 | ||
Remaining transaction price | 687 | ||
Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 1,128 | ||
Deferred income | 196 | ||
Committed sales | 402 | ||
Remaining transaction price | 598 | ||
Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 681 | ||
sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 1,228 | ||
Deferred income | 1 | ||
Remaining transaction price | 1 | ||
Other [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 35 | ||
Subscriptions [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 310 | ||
Deferred income | 17 | ||
Remaining transaction price | 17 | ||
Other ongoing performance obligations [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Revenue | 371 | ||
Deferred income | 19 | ||
Committed sales | 145 | ||
Remaining transaction price | 164 | ||
2019 [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 868 | ||
2019 [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 272 | ||
2019 [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 420 | ||
2019 [member] | sale or return [member] | Goods or services transferred at point in time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 1 | ||
2019 [member] | Subscriptions [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 13 | ||
2019 [member] | Other ongoing performance obligations [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 162 | ||
2020 [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 308 | ||
2020 [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 131 | ||
2020 [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 173 | ||
2020 [member] | Subscriptions [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 3 | ||
2020 [member] | Other ongoing performance obligations [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 1 | ||
2021 and later [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 291 | ||
2021 and later [member] | Goods or services transferred over time [member] | Courseware [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 284 | ||
2021 and later [member] | Goods or services transferred over time [member] | Assessments [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 5 | ||
2021 and later [member] | Subscriptions [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | 1 | ||
2021 and later [member] | Other ongoing performance obligations [member] | Goods or services transferred over time [member] | Services [member] | |||
Disclosure of transaction price allocated to remaining performance obligations [line items] | |||
Remaining transaction price | £ 1 |
Operating Expenses - Summary of
Operating Expenses - Summary of Operating Expenses by Function (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating Expenses 1 [abstract] | |||
Cost of goods sold | £ 1,943 | £ 2,066 | £ 2,093 |
Distribution costs | 88 | 84 | 88 |
Selling, marketing and product development costs | 759 | 896 | 908 |
Administrative and other expenses | 1,039 | 1,207 | 1,240 |
Restructuring costs | 90 | 79 | 329 |
Other income | (69) | (64) | (85) |
Total net operating expenses | 1,907 | 2,202 | 2,480 |
Other net gains and losses | (230) | (128) | 25 |
Impairment of intangible assets | 2,548 | ||
Total | £ 3,620 | £ 4,140 | £ 7,146 |
Operating Expenses - Additional
Operating Expenses - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Operating expense [line items] | |||
Research and efficacy costs | £ 14 | £ 14 | £ 23 |
Restructuring costs | 90 | 79 | 329 |
Penguin Random House [member] | |||
Operating expense [line items] | |||
Service fee income | 3 | 3 | 4 |
Restructuring costs | £ 12 | £ 0 | £ 9 |
Operating expenses - Summary _2
Operating expenses - Summary of Analysis of Restructuring Costs (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of restructuring costs [line items] | |||
Property and facilities | £ 147 | £ 202 | £ 243 |
Technology and communications | 192 | 218 | 188 |
Professional and outsourced services | 396 | 322 | 378 |
Total restructuring - operating expenses | 90 | 79 | 329 |
Total | 102 | 79 | 338 |
Restructuring Costs [member] | |||
Disclosure of restructuring costs [line items] | |||
Product costs | 12 | 15 | 32 |
Employee costs | 56 | 11 | 139 |
Depreciation and amortisation | 1 | 13 | 29 |
Property and facilities | (5) | 24 | 43 |
Technology and communications | 1 | 2 | 7 |
Professional and outsourced services | 9 | 12 | 31 |
General and administrative costs | 16 | 2 | 48 |
Total restructuring - operating expenses | 90 | 79 | 329 |
Share of associate restructuring | 12 | 9 | |
Total | £ 102 | £ 79 | £ 338 |
Operating Expenses - Summary _3
Operating Expenses - Summary of Operating Expenses by Nature (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Expense by nature [line items] | |||
Royalties expensed | £ 236 | £ 246 | £ 264 |
Other product costs | 516 | 564 | 616 |
Employee benefit expense | 1,637 | 1,805 | 1,888 |
Contract labour | 161 | 152 | 206 |
Employee-related expense | 115 | 127 | 122 |
Promotional costs | 233 | 229 | 217 |
Depreciation of property, plant and equipment | 66 | 90 | 95 |
Impairment of intangible assets | 2,548 | ||
Property and facilities | 147 | 202 | 243 |
Technology and communications | 192 | 218 | 188 |
Professional and outsourced services | 396 | 322 | 378 |
Other general and administrative costs | 85 | 140 | 140 |
Costs capitalised to intangible assets | (390) | (324) | (318) |
Other net gains and losses | (230) | (128) | 25 |
Other income | (69) | (64) | (85) |
Total | 3,620 | 4,140 | 7,146 |
Pre-publication assets [member] | |||
Expense by nature [line items] | |||
Amortisation of intangible assets | 338 | 338 | 350 |
Software [member] | |||
Expense by nature [line items] | |||
Amortisation of intangible assets | 88 | 85 | 84 |
Other acquired intangibles [member] | |||
Expense by nature [line items] | |||
Amortisation of intangible assets | £ 99 | £ 138 | £ 185 |
Operating Expenses - Summary _4
Operating Expenses - Summary of Services From the Group's Auditors (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Auditors Remuneration [line items] | |||
Total audit fees | £ 6 | £ 6 | £ 7 |
Audit-related and other assurance services | 1 | 1 | 1 |
Other non-audit services | 1 | 1 | |
Total other services | 1 | 2 | 2 |
Total non-audit services | 1 | 2 | 2 |
Total | 7 | 8 | 9 |
Parent [member] | |||
Auditors Remuneration [line items] | |||
Total audit fees | 4 | 4 | 5 |
Subsidiaries [member] | |||
Auditors Remuneration [line items] | |||
Total audit fees | £ 2 | £ 2 | £ 2 |
Operating Expenses - Summary _5
Operating Expenses - Summary of Reconciliation Between Audit and Non-Audit Service Fees (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Auditor's remuneration [abstract] | |||
Group audit fees including fees for attestation under section 404 of the Sarbanes-Oxley Act | £ 6 | £ 6 | £ 7 |
Non-audit fees | 1 | 2 | 2 |
Total | £ 7 | £ 8 | £ 9 |
Employee Information - Summary
Employee Information - Summary of Classification of Employee Benefit (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee benefit expense | |||
Wages and salaries (including termination costs) | £ 1,421 | £ 1,567 | £ 1,661 |
Social security costs | 112 | 130 | 124 |
Share-based payment costs | 37 | 33 | 22 |
Retirement benefits - defined contribution plans | 56 | 57 | 67 |
Retirement benefits - defined benefit plans | 23 | 19 | 16 |
Other post-retirement medical benefits | (12) | (1) | (2) |
Total | £ 1,637 | £ 1,805 | £ 1,888 |
Employee Information - Summar_2
Employee Information - Summary of Average Number of Employees (Detail) - Continuing operation [member] - Employee | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of number of employees [line items] | |||
Average number of employees | 24,322 | 30,339 | 32,719 |
North America [member] | |||
Disclosure of number of employees [line items] | |||
Average number of employees | 14,113 | 16,295 | 16,841 |
Core [member] | |||
Disclosure of number of employees [line items] | |||
Average number of employees | 5,192 | 5,291 | 5,664 |
Growth [member] | |||
Disclosure of number of employees [line items] | |||
Average number of employees | 4,521 | 8,268 | 9,868 |
Other Segment [member] | |||
Disclosure of number of employees [line items] | |||
Average number of employees | 496 | 485 | 346 |
Net Finance Costs - Schedule of
Net Finance Costs - Schedule of Information About Finance Income and Costs (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of finance income and costs [line items] | |||
Interest payable on financial liabilities at amortised cost and associated derivatives | £ (42) | £ (99) | £ (74) |
Net foreign exchange losses | (36) | (21) | |
Finance costs associated with transactions | (1) | (6) | |
Finance costs | (91) | (110) | (97) |
Interest receivable on financial assets at amortised cost | 18 | 20 | 15 |
Net finance income in respect of retirement benefits | 11 | 3 | 11 |
Net foreign exchange gains | 44 | 1 | |
Finance income | 36 | 80 | 37 |
Net finance costs | (55) | (30) | (60) |
Not designated in hedging relationship [member] | |||
Disclosure of finance income and costs [line items] | |||
Finance costs | (7) | (5) | (2) |
Finance income | 6 | 12 | £ 10 |
Designated in hedging relationship [member] | |||
Disclosure of finance income and costs [line items] | |||
Finance costs | (5) | ||
Finance income | £ 1 | £ 1 |
Net Finance Costs - Additional
Net Finance Costs - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of finance income and costs [line items] | |||
Net movement on hedging instrument in fair value hedges | £ 0 | £ 1 | £ 0 |
Gain (loss) on underlying bonds in fair value hedges | 4 | 37 | (4) |
Gain (loss) on hedging instrument in fair value hedges | 4 | (36) | 4 |
Related parties [member] | |||
Disclosure of finance income and costs [line items] | |||
Interest receivable | £ 1 | £ 1 | £ 1 |
Income Tax - Summary of Compone
Income Tax - Summary of Components of Current Tax Expense Income and Adjustments for Current Tax of Prior Periods (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Major components of tax expense (income) [abstract] | |||
Credit/(charge) in respect of current year | £ 92 | £ (121) | £ (66) |
Adjustments in respect of prior years | 34 | (2) | 27 |
Total current tax credit/(charge) | 126 | (123) | (39) |
Deferred tax | |||
In respect of temporary differences | (6) | 96 | 277 |
Other adjustments in respect of prior years | (28) | 14 | (16) |
Total deferred tax (charge)/credit | (34) | 110 | 261 |
Total tax credit/(charge) | £ 92 | £ (13) | £ 222 |
Income Tax - Summary of Profit
Income Tax - Summary of Profit Before Tax Differences Calculated (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Effective Tax Rate [Line Items] | |||
Profit before tax | £ 498 | £ 421 | £ (2,557) |
Tax calculated at UK rate (2018: 19%, 2017: 19.25%) | (94) | (81) | 511 |
Effect of overseas tax rates | (28) | 15 | 424 |
Joint venture and associate income reported net of tax | 8 | 15 | 19 |
Intangible impairment not subject to tax | (722) | ||
Intra-group financing benefit | 25 | 26 | 34 |
Movement in provisions for tax uncertainties | 111 | 49 | (37) |
Impact of US tax reform | (1) | ||
Net expense not subject to tax | (29) | (39) | (8) |
Benefit from change in US tax accounting treatment | 25 | ||
Gains and losses on sale of businesses not subject to tax | 77 | 8 | 15 |
Utilisation of previously unrecognised tax losses and credits | (1) | ||
Unrecognised tax losses | (9) | (16) | (25) |
Adjustments in respect of prior years | 6 | 12 | 11 |
Total tax credit/(charge) | £ 92 | £ (13) | £ 222 |
Tax rate reflected in earnings | (18.50%) | 3.10% | 8.70% |
UK [member] | |||
Reconciliation of Effective Tax Rate [Line Items] | |||
Total tax credit/(charge) | £ 37 | £ (36) | £ 46 |
Overseas [member] | |||
Reconciliation of Effective Tax Rate [Line Items] | |||
Total tax credit/(charge) | £ 55 | £ 23 | £ 176 |
Income Tax - Summary of Profi_2
Income Tax - Summary of Profit Before Tax Differences Calculated (Parenthetical) (Detail) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
UK [member] | |||
Reconciliation of Effective Tax Rate [Line Items] | |||
Applicable tax rate | 19.00% | 19.25% | 20.00% |
Income Tax - Additional Informa
Income Tax - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income tax [line items] | ||||
Current tax liability | £ 72 | £ 231 | ||
Provisions for tax uncertainties | 181 | 280 | ||
Tax charges relating to share based payments | 4 | 0 | £ 0 | |
2014 and earlier tax year [member] | ||||
Income tax [line items] | ||||
Provisions for tax uncertainties | 181 | 57 | ||
2015 tax year [member] | ||||
Income tax [line items] | ||||
Provisions for tax uncertainties | £ 66 | |||
2016 tax year [member] | ||||
Income tax [line items] | ||||
Provisions for tax uncertainties | £ 29 | |||
2017 tax year [member] | ||||
Income tax [line items] | ||||
Provisions for tax uncertainties | 23 | |||
2018 tax year [member] | ||||
Income tax [line items] | ||||
Provisions for tax uncertainties | 6 | |||
Amount of liabilities increase | 25 | £ 25 | ||
2019 tax year [member] | ||||
Income tax [line items] | ||||
Amount of Liabilities decrease | £ 50 |
Income Tax - Summary of Tax Ben
Income Tax - Summary of Tax Benefit/(Charge) Recognised in Other Comprehensive Income (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income tax relating to components of other comprehensive income [abstract] | |||
Net exchange differences on translation of foreign operations | £ (4) | £ 9 | £ (5) |
Fair value gain on other financial assets | (4) | ||
Remeasurement of retirement benefit obligations | 9 | (42) | 58 |
Tax benefit/(charge) recognised in other comprehensive income | £ 5 | £ (37) | £ 53 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Earnings Per Share (Detail) - GBP (£) £ / shares in Units, £ in Millions, shares in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings per share [abstract] | |||
Earnings/(loss) for the year from continuing operations | £ 590 | £ 408 | £ (2,335) |
Non-controlling interest | (2) | (2) | (2) |
Earnings/(loss) attributable to equity holders of the company | £ 588 | £ 406 | £ (2,337) |
Weighted average number of shares (millions) | 778.1 | 813.4 | 814.8 |
Effect of dilutive share options (millions) | 0.6 | 0.3 | |
Weighted average number of shares (millions) for diluted earnings | 778.7 | 813.7 | 814.8 |
Earnings/(loss) per share | |||
Basic | £ 0.756 | £ 0.499 | £ (2.868) |
Diluted | £ 0.755 | £ 0.499 | £ (2.868) |
Dividends - Summary of Dividend
Dividends - Summary of Dividends Declared (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of dividends [line items] | |||
Dividends paid | £ 136 | £ 318 | £ 424 |
Final dividend [member] | |||
Disclosure of dividends [line items] | |||
Dividends paid | 93 | 277 | 277 |
Interim dividend [member] | |||
Disclosure of dividends [line items] | |||
Dividends paid | £ 43 | £ 41 | £ 147 |
Dividends - Summary of Divide_2
Dividends - Summary of Dividends Declared (Parenthetical) (Detail) - £ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Final dividend [member] | |||
Disclosure of dividends [line items] | |||
Dividends paid per share | £ 0.12 | £ 0.34 | £ 0.34 |
Interim dividend [member] | |||
Disclosure of dividends [line items] | |||
Dividends paid per share | £ 0.055 | £ 0.050 | £ 0.180 |
Dividends - Additional Informat
Dividends - Additional Information (Detail) £ / shares in Units, £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£)£ / shares | |
Disclosure of Dividends [abstract] | |
Dividends proposed per share | £ / shares | £ 0.13 |
Dividends proposed estimated effect on shareholders' funds | £ | £ 102 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, plant and equipment (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | £ 281 | £ 343 | |
Charge for the year | (66) | (90) | £ (95) |
Disposals | (41) | (12) | (9) |
Ending Balance | 237 | 281 | 343 |
Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 886 | 978 | |
Exchange differences | 26 | (51) | |
Additions | 66 | 90 | |
Disposals | (172) | (47) | |
Disposal through business disposal | (16) | ||
Transfer to intangible assets | (11) | (11) | |
Transfer to assets classified as held for sale | (57) | ||
Transfer to intangible assets - pre-publication | (2) | ||
Ending Balance | 793 | 886 | 978 |
Depreciation [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | (605) | (635) | |
Exchange differences | (16) | 35 | |
Charge for the year | (66) | (90) | |
Disposals | 131 | 35 | |
Disposal through business disposal | 9 | ||
Transfer to assets classified as held for sale | 41 | ||
Ending Balance | (556) | (605) | (635) |
Land and buildings [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 133 | 169 | |
Ending Balance | 122 | 133 | 169 |
Land and buildings [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 330 | 398 | |
Exchange differences | 11 | (20) | |
Additions | 32 | 26 | |
Disposals | (75) | (13) | |
Disposal through business disposal | (11) | ||
Reclassifications | 19 | 5 | |
Transfer to assets classified as held for sale | (55) | ||
Ending Balance | 317 | 330 | 398 |
Land and buildings [member] | Depreciation [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | (197) | (229) | |
Exchange differences | (5) | 12 | |
Charge for the year | (20) | (35) | |
Disposals | 34 | 9 | |
Disposal through business disposal | 6 | ||
Reclassifications | (7) | ||
Transfer to assets classified as held for sale | 40 | ||
Ending Balance | (195) | (197) | (229) |
Plant and equipment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 119 | 154 | |
Ending Balance | 97 | 119 | 154 |
Plant and equipment [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 527 | 560 | |
Exchange differences | 14 | (29) | |
Additions | 22 | 40 | |
Disposals | (97) | (34) | |
Disposal through business disposal | (5) | ||
Reclassifications | (8) | 8 | |
Transfer to intangible assets | (11) | ||
Transfer to assets classified as held for sale | (2) | ||
Ending Balance | 458 | 527 | 560 |
Plant and equipment [member] | Depreciation [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | (408) | (406) | |
Exchange differences | (11) | 23 | |
Charge for the year | (46) | (55) | |
Disposals | 97 | 26 | |
Disposal through business disposal | 3 | ||
Reclassifications | 7 | ||
Transfer to assets classified as held for sale | 1 | ||
Ending Balance | (361) | (408) | (406) |
Assets in course of construction [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 29 | 20 | |
Ending Balance | 18 | 29 | 20 |
Assets in course of construction [member] | Cost [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Beginning Balance | 29 | 20 | |
Exchange differences | 1 | (2) | |
Additions | 12 | 24 | |
Reclassifications | (11) | (13) | |
Transfer to intangible assets | (11) | ||
Transfer to intangible assets - pre-publication | (2) | ||
Ending Balance | £ 18 | £ 29 | £ 20 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation expense | £ 66 | £ 90 | £ 95 |
Property, plant and equipment [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Net carrying amount of leased plant and equipment included within PPE | 7 | 9 | |
Cost of goods sold [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation expense | 18 | 23 | |
Operating expense [member] | |||
Disclosure of detailed information about property, plant and equipment [line items] | |||
Depreciation expense | £ 48 | £ 67 |
Intangible Assets - Summary of
Intangible Assets - Summary of Intangible Assets (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | £ 2,964 | £ 3,442 |
Ending balance | 3,009 | 2,964 |
Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 4,755 | 5,277 |
Exchange differences | 144 | (350) |
Disposals | (157) | (23) |
Disposal through business disposal | (2) | (59) |
Transfer from property, plant and equipment | 11 | 11 |
Transfer to assets classified as held for sale | 7 | (251) |
Ending balance | 4,888 | 4,755 |
Cost [member] | Internally generated [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Additions | 124 | 133 |
Cost [member] | Not internally generated [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Additions | 6 | 17 |
Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (1,791) | (1,835) |
Exchange differences | (56) | 126 |
Charge for the year | (187) | (223) |
Disposals | 155 | 21 |
Disposal through business disposal | 50 | |
Transfer to assets classified as held for sale | 70 | |
Ending balance | (1,879) | (1,791) |
Goodwill [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 2,030 | 2,341 |
Ending balance | 2,111 | 2,030 |
Goodwill [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 2,030 | 2,341 |
Exchange differences | 74 | (148) |
Transfer to assets classified as held for sale | 7 | (163) |
Ending balance | 2,111 | 2,030 |
Software [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 389 | 337 |
Ending balance | 447 | 389 |
Software [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 882 | 798 |
Exchange differences | 32 | (46) |
Disposals | (94) | (23) |
Disposal through business disposal | (2) | (4) |
Transfer from property, plant and equipment | 11 | 11 |
Transfer to assets classified as held for sale | (4) | |
Ending balance | 959 | 882 |
Software [member] | Cost [member] | Internally generated [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Additions | 124 | 133 |
Software [member] | Cost [member] | Not internally generated [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Additions | 6 | 17 |
Software [member] | Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (493) | (461) |
Exchange differences | (23) | 30 |
Charge for the year | (88) | (85) |
Disposals | 92 | 21 |
Disposal through business disposal | 2 | |
Ending balance | (512) | (493) |
Acquired customer lists, contracts and relationships [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 309 | 419 |
Ending balance | 263 | 309 |
Acquired customer lists, contracts and relationships [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 889 | 974 |
Exchange differences | 39 | (74) |
Disposals | (18) | |
Disposal through business disposal | (9) | |
Transfer to assets classified as held for sale | (2) | |
Ending balance | 910 | 889 |
Acquired customer lists, contracts and relationships [member] | Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (580) | (555) |
Exchange differences | (26) | 43 |
Charge for the year | (59) | (77) |
Disposals | 18 | |
Disposal through business disposal | 8 | |
Transfer to assets classified as held for sale | 1 | |
Ending balance | (647) | (580) |
Acquired trademarks and brands [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 101 | 144 |
Ending balance | 86 | 101 |
Acquired trademarks and brands [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 281 | 353 |
Exchange differences | (2) | (26) |
Disposals | (12) | |
Disposal through business disposal | (19) | |
Transfer to assets classified as held for sale | (27) | |
Ending balance | 267 | 281 |
Acquired trademarks and brands [member] | Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (180) | (209) |
Exchange differences | 1 | 13 |
Charge for the year | (14) | (18) |
Disposals | 12 | |
Disposal through business disposal | 18 | |
Transfer to assets classified as held for sale | 16 | |
Ending balance | (181) | (180) |
Acquired publishing rights [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 6 | 13 |
Ending balance | 6 | 6 |
Acquired publishing rights [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 184 | 211 |
Exchange differences | (6) | |
Transfer to assets classified as held for sale | (21) | |
Ending balance | 184 | 184 |
Acquired publishing rights [member] | Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (178) | (198) |
Exchange differences | 2 | 4 |
Charge for the year | (2) | (3) |
Transfer to assets classified as held for sale | 19 | |
Ending balance | (178) | (178) |
Other acquired intangibles [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 129 | 188 |
Ending balance | 96 | 129 |
Other acquired intangibles [member] | Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | 489 | 600 |
Exchange differences | 1 | (50) |
Disposals | (33) | |
Disposal through business disposal | (27) | |
Transfer to assets classified as held for sale | (34) | |
Ending balance | 457 | 489 |
Other acquired intangibles [member] | Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Beginning balance | (360) | (412) |
Exchange differences | (10) | 36 |
Charge for the year | (24) | (40) |
Disposals | 33 | |
Disposal through business disposal | 22 | |
Transfer to assets classified as held for sale | 34 | |
Ending balance | £ (361) | £ (360) |
Intangible assets - Additional
Intangible assets - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about intangible assets [line items] | ||
Carrying value of goodwill | £ 2,111 | £ 2,030 |
Description of valuation techniques used to measure fair value less costs of disposal | The recoverable amount of each aggregated CGU is based on fair value less costs of disposal. Goodwill is tested at least annually for impairment. Other than goodwill there are no intangible assets with indefinite lives. The goodwill is generally denominated in the currency of the relevant cash flows and therefore the impairment review is not materially sensitive to exchange rate fluctuations. | |
Description of key assumptions | For the purpose of estimating the fair value less costs of disposal of the CGUs, management has used an income approach based on present value techniques. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, management's best estimate about future developments and market assumptions. The fair value less costs of disposal measurement is categorised as Level 3 on the fair value hierarchy. | |
Perpetuity growth rate | 2.00% | |
Description of management's approach to determining values assigned to key assumptions | Forecast sales growth rates Forecast sales growth rates are based on past experience adjusted for the strategic direction and near-term investment priorities within each CGU. Key assumptions include growth in Online Program Management, Online Blended Learning and Professional Certification, stabilisation in UK Qualifications and US Assessments, and ongoing pressures in the US higher education courseware market. The five-year sales forecasts use average nominal growth rates between 3% and 6% for mature markets and between 5% and 14% for emerging markets with high inflation. | |
Cost of goods sold [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortisation expense | £ 18 | 17 |
Operating expense [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Amortisation expense | £ 169 | £ 206 |
Goodwill [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Description of accounting of goodwill prior to adoption of IFRS | For acquisitions completed between 1 January 1998 and 31 December 2002, no value was ascribed to intangibles other than goodwill which was amortised over a period of up to 20 years. On adoption of IFRS on 1 January 2003, the Group chose not to restate the goodwill balance and at that date the balance was frozen (i.e. amortisation ceased). | |
Bottom of range [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Post tax discount rate used in calculating fair value | 7.90% | |
CGU growth rate | 3.00% | |
Average nominal growth rate used in sales forecast for mature markets | 2.00% | |
Average nominal growth rate used in sales forecast for emerging markets | (1.00%) | |
Top of range [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Post tax discount rate used in calculating fair value | 15.80% | |
CGU growth rate | 6.50% | |
Average nominal growth rate used in sales forecast for mature markets | 3.00% | |
Average nominal growth rate used in sales forecast for emerging markets | 12.00% |
Intangible Assets - Summary o_2
Intangible Assets - Summary of Useful Economic Life of Intangible Assets (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Bottom of range [member] | Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 3 years |
Bottom of range [member] | Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 2 years |
Bottom of range [member] | Acquired publishing rights [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 5 years |
Bottom of range [member] | Other acquired intangibles [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 2 years |
Top of range [member] | Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 20 years |
Top of range [member] | Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 20 years |
Top of range [member] | Acquired publishing rights [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 20 years |
Top of range [member] | Other acquired intangibles [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Useful life of intangible assets | 20 years |
Intangible Assets - Summary o_3
Intangible Assets - Summary of Amortisation Profile of Intangible Assets (Detail) £ in Millions | Dec. 31, 2018GBP (£) |
Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | £ 263 |
Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 86 |
Acquired publishing rights [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 6 |
Other acquired intangibles [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 96 |
One to five years [member] | Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 187 |
One to five years [member] | Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 49 |
One to five years [member] | Acquired publishing rights [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 5 |
One to five years [member] | Other acquired intangibles [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 77 |
Six to ten years [member] | Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 66 |
Six to ten years [member] | Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 27 |
Six to ten years [member] | Acquired publishing rights [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 1 |
Six to ten years [member] | Other acquired intangibles [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 19 |
More than ten years [member] | Acquired customer lists, contracts and relationships [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | 10 |
More than ten years [member] | Acquired trademarks and brands [member] | |
Disclosure of detailed information about intangible assets [line items] | |
Acquired intangible assets are included within non-current Intangible assets | £ 10 |
Intangible Assets - Summary o_4
Intangible Assets - Summary of Carrying Value of Goodwill (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about intangible assets [line items] | ||
Goodwill | £ 2,111 | £ 2,030 |
North America [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Goodwill | 930 | 1,013 |
Core [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Goodwill | 701 | 641 |
Pearson VUE [member] | ||
Disclosure of detailed information about intangible assets [line items] | ||
Goodwill | £ 480 | £ 376 |
Intangible Assets - Summary o_5
Intangible Assets - Summary of Cumulative Impact of Changes in Assumptions Used in Calculating the Fair Value (Detail) £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
North America [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Headroom at 31 December 2018 | £ 356 |
1% increase in average discount rate | 128 |
5% decrease in annual contribution | 27 |
10% decrease in annual contribution | (301) |
1% decrease in perpetuity growth rate | 167 |
Core [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Headroom at 31 December 2018 | 210 |
1% increase in average discount rate | 67 |
5% decrease in annual contribution | 84 |
10% decrease in annual contribution | (42) |
1% decrease in perpetuity growth rate | 83 |
Brazil [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Headroom at 31 December 2018 | 20 |
1% increase in average discount rate | (8) |
5% decrease in annual contribution | 3 |
10% decrease in annual contribution | (14) |
1% decrease in perpetuity growth rate | £ (4) |
Investments in Joint Ventures_3
Investments in Joint Ventures and Associates - Summary of Financial Statements (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Investments in subsidiaries, joint ventures and associates [abstract] | |||
Associates | £ 392 | £ 395 | |
Joint ventures | 3 | ||
Total | 392 | 398 | |
Associates | 43 | 77 | |
Joint ventures | 1 | 1 | |
Total | £ 44 | £ 78 | £ 97 |
Investments in Joint Ventures_4
Investments in Joint Ventures and Associates - Summary of Materials (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Penguin Random House Ltd [member] | |
Disclosure of associates [line items] | |
Name of Associates | Penguin Random House Ltd |
Principal place of business | UK/Global |
Ownership interest | 25.00% |
Measurement method | Equity |
Penguin Random House LLC [member] | |
Disclosure of associates [line items] | |
Name of Associates | Penguin Random House LLC |
Principal place of business | US |
Ownership interest | 25.00% |
Measurement method | Equity |
Investments in Joint Ventures_5
Investments in Joint Ventures and Associates - Additional Information (Detail) - GBP (£) | Oct. 05, 2017 | Jul. 01, 2013 | Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Random House [member] | |||||
Investments in associates and joint ventures [line items] | |||||
Proportion of voting power held in associate | 53.00% | ||||
Penguin [member] | |||||
Investments in associates and joint ventures [line items] | |||||
Proportion of voting power held in associate | 47.00% | ||||
Penguin Random House [member] | |||||
Investments in associates and joint ventures [line items] | |||||
Proportion of sales of voting power held in associate | 22.00% | ||||
Proportion of voting power held in associate | 25.00% | ||||
Loans to associates | £ 0 | £ 46,000,000 | |||
Current assets receivables | 17,000,000 | 19,000,000 | |||
Service fees from services to associates | 3,000,000 | 3,000,000 | |||
Current liability payable | £ 0 | £ 3,000,000 | |||
Recapitalisation dividend | £ 50,000,000 |
Investments in Joint Ventures_6
Investments in Joint Ventures and Associates - Summary of Financial Information of Material Associate (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Assets | |||||
Non-current assets | £ 4,529 | £ 4,603 | |||
Liabilities | |||||
Non-current liabilities | (1,246) | (1,662) | |||
Net assets | £ 4,021 | £ 4,021 | 4,525 | 4,021 | |
Sales | 4,129 | 4,513 | £ 4,552 | ||
Profit for the year | 590 | 408 | (2,335) | ||
Other comprehensive income/(expense) | 124 | (155) | 690 | ||
Total comprehensive income | 714 | 253 | (1,645) | ||
Opening net assets | 4,021 | ||||
Profit for the year | 590 | 408 | (2,335) | ||
Other comprehensive income/(expense) | 124 | (155) | 690 | ||
Dividends, net of tax paid | (137) | (318) | (424) | ||
Closing net assets | 4,525 | 4,021 | |||
Goodwill | 2,111 | 2,030 | |||
Penguin Random House [member] | Associates [member] | |||||
Assets | |||||
Non-current assets | 1,043 | 1,048 | |||
Current assets | 1,929 | 1,758 | |||
Liabilities | |||||
Non-current liabilities | (1,104) | (859) | |||
Current liabilities | (1,546) | (1,579) | |||
Net assets | 368 | 1,386 | 1,386 | 322 | 368 |
Sales | 2,775 | 2,693 | |||
Profit for the year | 185 | 171 | |||
Other comprehensive income/(expense) | 13 | (60) | |||
Total comprehensive income | 198 | 111 | |||
Dividends received from associate in relation to profits | 67 | 146 | |||
Re-capitalisation dividends received from associate | 50 | 312 | |||
Opening net assets | 368 | 1,386 | |||
Exchange differences | 18 | (18) | |||
Profit for the year | 185 | 171 | |||
Other comprehensive income/(expense) | 13 | (60) | |||
Dividends, net of tax paid | (262) | (1,167) | |||
Tax adjustments in relation to disposals | 56 | ||||
Closing net assets | 322 | 368 | £ 1,386 | ||
Goodwill | 307 | 296 | |||
Carrying value of associate | 387 | 388 | |||
Penguin Random House [member] | Associates [member] | Share of net assets [member] | |||||
Liabilities | |||||
Net assets | 92 | 92 | £ 80 | £ 92 | |
Opening net assets | 92 | ||||
Closing net assets | £ 80 | £ 92 |
Investments in Joint Ventures_7
Investments in Joint Ventures and Associates - Summary of Individually Immaterial Associates (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of associates [line items] | |||
Profit for the year | £ 590 | £ 408 | £ (2,335) |
Total comprehensive (expense)/income | £ 714 | 253 | (1,645) |
Aggregated individually immaterial associates [member] | |||
Disclosure of associates [line items] | |||
Profit for the year | (3) | 7 | |
Total comprehensive (expense)/income | £ (3) | £ 7 |
Investments in Joint Ventures_8
Investments in Joint Ventures and Associates - Summary of Individually Immaterial Joint Ventures (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of associates [line items] | |||
Profit for the year | £ 590 | £ 408 | £ (2,335) |
Total comprehensive income | 714 | 253 | £ (1,645) |
Aggregated individually immaterial joint ventures [member] | |||
Disclosure of associates [line items] | |||
Profit for the year | 1 | 1 | |
Total comprehensive income | £ 1 | £ 1 |
Deferred Income Tax - Schedule
Deferred Income Tax - Schedule of Deferred Income Tax (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets and liabilities [abstract] | ||
Deferred income tax assets | £ 60 | £ 95 |
Deferred income tax liabilities | (136) | (164) |
Net deferred income tax | £ (76) | £ (69) |
Deferred Income Tax - Additiona
Deferred Income Tax - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Other deferred tax assets not recognised | £ 12 | £ 12 |
Deferred income tax assets | 60 | 95 |
Income tax liabilities | 136 | 164 |
Assets and liabilities classified as held for sale [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred income tax assets | 98 | 68 |
Income tax liabilities | 2 | |
Expenses related to asset held for sale | 8 | |
UK [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Unrecognised deferred income tax assets | 31 | 32 |
United States [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Unrecognised deferred income tax assets | 28 | 18 |
All other countries [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Unrecognised deferred income tax assets | 90 | 86 |
Trading losses [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Deferred income tax assets | £ 43 | £ 75 |
Top of range [member] | United States [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Expiry periods | 5 years | |
Bottom of range [member] | United States [member] | ||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | ||
Expiry periods | 20 years |
Deferred Income Tax - Schedul_2
Deferred Income Tax - Schedule of Movement on Net Deferred Income Tax Account (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | £ (69) | ||
Tax benefit/charge in other comprehensive income | 5 | £ (37) | £ 53 |
Ending balance | (76) | (69) | |
Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | (69) | (15) | |
Adjustment on initial application of IFRS 15 (see note 1b) | 16 | ||
Adjustment on initial application of IFRS 9 (see note 1c) | 3 | ||
Exchange differences | (13) | (6) | |
Income statement (charge) benefit | (42) | 110 | |
Disposal through business disposal | 16 | (3) | |
Tax benefit/charge in other comprehensive income | 9 | (89) | |
Transfer to assets/(liabilities) classified as held for sale | (66) | ||
Tax charge in equity | 4 | ||
Ending balance | (76) | (69) | (15) |
Trading losses [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | 9 | 22 | |
Exchange differences | (2) | ||
Income statement (charge) benefit | 11 | (11) | |
Ending balance | 20 | 9 | 22 |
Returns provisions [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | 34 | 35 | |
Exchange differences | 1 | (3) | |
Income statement (charge) benefit | (4) | 6 | |
Transfer to assets/(liabilities) classified as held for sale | (4) | ||
Ending balance | 31 | 34 | 35 |
Retirement benefit obligations [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | (44) | 37 | |
Exchange differences | 1 | (4) | |
Income statement (charge) benefit | (21) | 7 | |
Tax benefit/charge in other comprehensive income | 9 | (84) | |
Ending balance | (55) | (44) | 37 |
Deferred revenue [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | 27 | 117 | |
Adjustment on initial application of IFRS 15 (see note 1b) | 15 | ||
Exchange differences | 6 | (8) | |
Income statement (charge) benefit | 20 | (9) | |
Transfer to assets/(liabilities) classified as held for sale | (73) | ||
Ending balance | 68 | 27 | 117 |
Goodwill and intangible [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | (155) | (295) | |
Exchange differences | (16) | 19 | |
Income statement (charge) benefit | (34) | 118 | |
Transfer to assets/(liabilities) classified as held for sale | 3 | ||
Ending balance | (205) | (155) | (295) |
Other [member] | Deferred tax assets [member] | |||
Disclosure of temporary difference, unused tax losses and unused tax credits [line items] | |||
Beginning balance | 60 | 69 | |
Adjustment on initial application of IFRS 15 (see note 1b) | 1 | ||
Adjustment on initial application of IFRS 9 (see note 1c) | 3 | ||
Exchange differences | (5) | (8) | |
Income statement (charge) benefit | (14) | (1) | |
Disposal through business disposal | 16 | (3) | |
Tax benefit/charge in other comprehensive income | (5) | ||
Transfer to assets/(liabilities) classified as held for sale | 8 | ||
Tax charge in equity | 4 | ||
Ending balance | £ 65 | £ 60 | £ 69 |
Classification of Financial I_3
Classification of Financial Instruments - Schedule of Classification of Each Class of Financial Assets and their Carrying Values (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial assets [line items] | ||
Financial assets | £ 1,682 | £ 1,652 |
Investments in unlisted securities [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 93 | 77 |
Cash and cash equivalents [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 568 | 518 |
Cash and cash equivalents - within assets classified as held for sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 127 | |
Marketable securities [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 8 | |
Derivative financial instruments [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 68 | 140 |
Trade receivables [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 904 | 760 |
Trade receivables - within assets classified as held for sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 49 | 22 |
Financial assets at fair value [member] | FVOCI [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 93 | |
Financial assets at fair value [member] | FVOCI [member] | Investments in unlisted securities [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 93 | |
Financial assets at fair value [member] | FVTPL [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 4 | |
Financial assets at fair value [member] | FVTPL [member] | Derivative financial instruments [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 4 | |
Financial assets at fair value [member] | Fair value - hedging instrument [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 64 | |
Financial assets at fair value [member] | Fair value - hedging instrument [member] | Derivative financial instruments [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 64 | |
Financial assets at fair value [member] | Financial assets available-for-sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 85 | |
Financial assets at fair value [member] | Financial assets available-for-sale [member] | Investments in unlisted securities [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 77 | |
Financial assets at fair value [member] | Financial assets available-for-sale [member] | Marketable securities [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 8 | |
Financial assets at fair value [member] | Financial assets at fair value derivative held for trading [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 3 | |
Financial assets at fair value [member] | Financial assets at fair value derivative held for trading [member] | Derivative financial instruments [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 3 | |
Financial assets at fair value [member] | Financial assets derivatives in hedge relationship [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 137 | |
Financial assets at fair value [member] | Financial assets derivatives in hedge relationship [member] | Derivative financial instruments [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 137 | |
Financial assets at amortised cost [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 1,521 | |
Financial assets at amortised cost [member] | Cash and cash equivalents [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 568 | |
Financial assets at amortised cost [member] | Trade receivables [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 904 | |
Financial assets at amortised cost [member] | Trade receivables - within assets classified as held for sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | £ 49 | |
Financial assets at amortised cost [member] | Loans and receivables [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 1,427 | |
Financial assets at amortised cost [member] | Loans and receivables [member] | Cash and cash equivalents [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 518 | |
Financial assets at amortised cost [member] | Loans and receivables [member] | Cash and cash equivalents - within assets classified as held for sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 127 | |
Financial assets at amortised cost [member] | Loans and receivables [member] | Trade receivables [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | 760 | |
Financial assets at amortised cost [member] | Loans and receivables [member] | Trade receivables - within assets classified as held for sale [member] | ||
Disclosure of financial assets [line items] | ||
Financial assets | £ 22 |
Classification of Financial I_4
Classification of Financial Instruments - Schedule of Accounting Classification of Class of Financial Liabilities, Together with their Carrying Values and Market Values (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial liabilities [line items] | ||
Financial liabilities | £ (1,112) | £ (1,661) |
Total market value | (1,101) | (1,665) |
Derivative financial instruments [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (59) | (140) |
Total market value | (59) | (140) |
Trade payables [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (311) | (265) |
Total market value | (311) | (265) |
Trade payables - within liabilities classified as held for sale [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (22) | (20) |
Total market value | (22) | (20) |
Liability to purchase own shares [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (151) | |
Total market value | (151) | |
Bank loans and overdrafts [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (43) | (15) |
Total market value | (43) | (15) |
Borrowings [member] | In less than one year [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (3) | (4) |
Total market value | (3) | (4) |
Borrowings [member] | More than 12 months past due date [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (674) | (1,066) |
Total market value | (663) | (1,070) |
Financial liabilities derivatives in hedging relationship [member] | Financial liabilities at fair value [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (59) | (140) |
Financial liabilities derivatives in hedging relationship [member] | Derivative financial instruments [member] | Financial liabilities at fair value [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (59) | (140) |
Other Financial Liablity [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (1,053) | |
Other Financial Liablity [member] | Trade payables [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (311) | |
Other Financial Liablity [member] | Trade payables - within liabilities classified as held for sale [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (22) | |
Other Financial Liablity [member] | Bank loans and overdrafts [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (43) | |
Other Financial Liablity [member] | Borrowings [member] | Financial liabilities at amortised cost [member] | In less than one year [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (3) | |
Other Financial Liablity [member] | Borrowings [member] | Financial liabilities at amortised cost [member] | More than 12 months past due date [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | £ (674) | |
Financial liabilities other [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (1,521) | |
Financial liabilities other [member] | Trade payables [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (265) | |
Financial liabilities other [member] | Trade payables - within liabilities classified as held for sale [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (20) | |
Financial liabilities other [member] | Liability to purchase own shares [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (151) | |
Financial liabilities other [member] | Bank loans and overdrafts [member] | Financial liabilities at amortised cost [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (15) | |
Financial liabilities other [member] | Borrowings [member] | Financial liabilities at amortised cost [member] | In less than one year [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | (4) | |
Financial liabilities other [member] | Borrowings [member] | Financial liabilities at amortised cost [member] | More than 12 months past due date [member] | ||
Disclosure of financial liabilities [line items] | ||
Financial liabilities | £ (1,066) |
Classification of financial i_5
Classification of financial instruments - Additional Information (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of financial liabilities [line items] | |||
Derivative assets | £ 68 | £ 140 | |
Derivative liabilities | 59 | 140 | |
Financial assets | 1,682 | 1,652 | |
Other financial assets | 93 | 77 | £ 65 |
Marketable securities [member] | |||
Disclosure of financial liabilities [line items] | |||
Financial assets | 8 | ||
Investments in unlisted securities [member] | |||
Disclosure of financial liabilities [line items] | |||
Financial assets | 93 | 77 | |
Level 2 of fair value hierarchy [member] | |||
Disclosure of financial liabilities [line items] | |||
Derivative assets | 68 | 140 | |
Derivative liabilities | 59 | 140 | |
Level 2 of fair value hierarchy [member] | Marketable securities [member] | |||
Disclosure of financial liabilities [line items] | |||
Financial assets | 0 | 8 | |
Level 3 of fair value hierarchy [member] | Investments in unlisted securities [member] | |||
Disclosure of financial liabilities [line items] | |||
Other financial assets | £ 93 | £ 77 | £ 65 |
Classification of Financial I_6
Classification of Financial Instruments - Schedule of Analysis of the Movements in Level 3 Fair Value Remeasurements (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of financial assets [line items] | ||
At beginning of year | £ 77 | £ 65 |
Exchange differences | 4 | (4) |
Acquisition of investments | 13 | 3 |
Fair value movements | 7 | 13 |
Disposal of investments | (8) | |
At end of year | 93 | 77 |
Level 3 of fair value hierarchy [member] | Investments in unlisted securities [member] | ||
Disclosure of financial assets [line items] | ||
At beginning of year | 77 | 65 |
Exchange differences | 4 | (4) |
Acquisition of investments | 13 | 3 |
Fair value movements | 7 | 13 |
Disposal of investments | (8) | |
At end of year | £ 93 | £ 77 |
Other Financial Assets - Summar
Other Financial Assets - Summary of Other Financial Assets (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of financial assets [abstract] | ||
At beginning of year | £ 77 | £ 65 |
Exchange differences | 4 | (4) |
Acquisition of investments | 13 | 3 |
Fair value movements | 7 | 13 |
Disposal of investments | (8) | |
At end of year | £ 93 | £ 77 |
Other financial assets - Additi
Other financial assets - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of financial assets [line items] | |||
Other financial assets | £ 93 | £ 77 | £ 65 |
Fair value of equity securities disposed | 8 | 0 | |
Cumulative gain on disposal financial statements | 0 | 2 | |
Investments in unlisted securities [member] | |||
Disclosure of financial assets [line items] | |||
Other financial assets | £ 93 | £ 77 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedge Accounting - Summary of Outstanding Derivative Financial Instruments (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | £ 2,250 | £ 2,750 |
Assets | 68 | 140 |
Liabilities | (59) | (140) |
In less than one year [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 771 | |
Assets | 1 | |
Liabilities | (23) | |
One to five years [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 795 | 1,638 |
Assets | 22 | 65 |
Liabilities | (1) | (95) |
Later than five years [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 684 | 1,112 |
Assets | 45 | 75 |
Liabilities | (35) | (45) |
Interest rate derivatives [member] | Fair value hedges [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 404 | 799 |
Assets | 13 | 23 |
Interest rate derivatives [member] | Not designated in hedging relationship [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 362 | 429 |
Assets | 3 | 3 |
Cross currency rate derivatives [member] | Fair value hedges [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 577 | 1,522 |
Assets | 51 | 114 |
Liabilities | (35) | £ (140) |
FX forwards and collars [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 434 | |
Liabilities | (24) | |
Other derivatives [member] | Not designated in hedging relationship [member] | ||
Disclosure of detailed information about hedges [line items] | ||
Gross notional amounts | 473 | |
Assets | £ 1 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedge Accounting - Additional Information (Detail) £ in Millions | 12 Months Ended | |
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | |
Disclosure of detailed information about financial instruments [line items] | ||
Interest rate swap contracts to fix debt amount | £ 361 | |
Interest rate swap contracts to fix debt outstanding amount | 256 | |
Contracts to fix debt amount, net | £ 617 | |
Outstanding contracts rate | 1.39 | |
Outstanding contracts average rate | 0.79 | |
Mark-to-market value of rate derivatives | £ 8 | £ 0 |
Hedging gains/(losses) recognised in OCI | £ 15 | |
Fair value hedges [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Fair value hedge ratio | 1 | |
US Dollars [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Mark-to-market value of rate derivatives | £ (185) | (869) |
Sterling [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Mark-to-market value of rate derivatives | (215) | 12 |
Euro [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Mark-to-market value of rate derivatives | £ 432 | £ 857 |
Euro 2025 senior notes [member] | Libor [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Marginal interest rate on reference rate | 0.81% | |
Euro 2021 senior notes [member] | Libor [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Marginal interest rate on reference rate | 1.36% | |
Bottom of range [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Borrowings interest rate | 2.20% | |
Bottom of range [member] | Euro 2025 senior notes [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Borrowings interest rate | 1.375% | |
Top of range [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Borrowings interest rate | 3.80% | |
Top of range [member] | Euro 2021 senior notes [member] | ||
Disclosure of detailed information about financial instruments [line items] | ||
Borrowings interest rate | 1.875% |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedge Accounting - Summary of Instruments to Hedge Exposures to Changes in Interest Rates and Foreign Currency Risk Associated with Borrowings (Detail) - Financial assets - derivative financial instruments [member] £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Interest rate risk [member] | |
Disclosure of detailed information about hedging instruments [line items] | |
Carrying amount of hedging instruments | £ 13 |
Change in fair value of hedging instrument used to determine hedge ineffectiveness | (7) |
Nominal amounts of hedging instruments | 404 |
Currency risk [member] | |
Disclosure of detailed information about hedging instruments [line items] | |
Carrying amount of hedging instruments | 51 |
Change in fair value of hedging instrument used to determine hedge ineffectiveness | 3 |
Nominal amounts of hedging instruments | £ 404 |
Derivative Financial Instrume_6
Derivative Financial Instruments and Hedge Accounting - Summary of Amounts at the Reporting Rate Relating to Items Designated as Hedge Items (Detail) - Financial liabilities - borrowings [member] £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Disclosure of detailed information about hedged items [line items] | |
Carrying amount of hedged items | £ (256) |
Hedge ineffectiveness | 0 |
Interest rate risk [member] | |
Disclosure of detailed information about hedged items [line items] | |
Carrying amount of hedged items | (416) |
Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying amount | (9) |
Change in fair value of hedged item used to determine hedge ineffectiveness | 7 |
Hedge ineffectiveness | £ 0 |
Line item in profit or loss that includes hedge ineffectiveness | n/a |
Currency risk [member] | |
Disclosure of detailed information about hedged items [line items] | |
Carrying amount of hedged items | £ (416) |
Change in fair value of hedged item used to determine hedge ineffectiveness | (3) |
Hedge ineffectiveness | £ 0 |
Line item in profit or loss that includes hedge ineffectiveness | n/a |
Derivative Financial Instrume_7
Derivative Financial Instruments and Hedge Accounting - Summary of Amounts Related to Items Designated as Hedging Instruments (Detail) £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Disclosure of detailed information about hedges [line items] | |
Hedging gains/(losses) recognised in OCI | £ 15 |
Financial liabilities - derivative financial instruments [member] | |
Disclosure of detailed information about hedges [line items] | |
Carrying amount of hedged instruments | (59) |
Change in value of hedging instrument used to determine hedge ineffectiveness | (22) |
Nominal amounts of hedging instruments | 607 |
Hedging gains/(losses) recognised in OCI | (22) |
Hedge ineffectiveness recognised in profit or loss | 0 |
Financial liabilities - borrowings [member] | |
Disclosure of detailed information about hedges [line items] | |
Carrying amount of hedged instruments | (256) |
Change in value of hedging instrument used to determine hedge ineffectiveness | (10) |
Nominal amounts of hedging instruments | (256) |
Hedging gains/(losses) recognised in OCI | (10) |
Hedge ineffectiveness recognised in profit or loss | £ 0 |
Derivative Financial Instrume_8
Derivative Financial Instruments and Hedge Accounting - Disclosure of Derivative Financial Assets and Liabilities Subject to Offsetting Arrangements (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of derivative financial asset and liabilities offsetting arrangements [line items] | ||
Gross derivative assets | £ 68 | £ 140 |
Gross derivative liabilities | (59) | (140) |
Net derivative assets/ liabilities | 9 | |
Asset position [member] | ||
Disclosure of derivative financial asset and liabilities offsetting arrangements [line items] | ||
Gross Derivative assets | 67 | 103 |
Gross derivative liabilities | (44) | (78) |
Net derivative assets/ liabilities | 23 | 25 |
Counterparties in a liability position [member] | ||
Disclosure of derivative financial asset and liabilities offsetting arrangements [line items] | ||
Gross derivative assets | 1 | 37 |
Gross derivative liabilities | (15) | (62) |
Net derivative assets/ liabilities | £ (14) | £ (25) |
Cash and Cash Equivalents (Ex_3
Cash and Cash Equivalents (Excluding Overdrafts) - Summary of Cash and Cash Equivalents (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and cash equivalents [line items] | ||
Cash at bank and in hand | £ 533 | £ 361 |
Short-term bank deposits | 35 | 157 |
Total cash and cash equivalents | 568 | 518 |
Total | £ 568 | 645 |
Asset held for sale [member] | ||
Cash and cash equivalents [line items] | ||
Cash at bank and in hand | 127 | |
Total cash and cash equivalents | £ 127 |
Cash and Cash Equivalents (Ex_4
Cash and Cash Equivalents (Excluding Overdrafts) - Additional Information (Detail) | Dec. 31, 2018 | Dec. 31, 2017 |
US Dollars [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 18.00% | 36.00% |
Sterling [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 30.00% | 8.00% |
Canadian Dollars [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 14.00% | 2.00% |
Euro [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 6.00% | 7.00% |
China, Yuan Renminbi [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 3.00% | 20.00% |
Other currency [member] | ||
Cash and cash equivalents [line items] | ||
Cash and cash equivalents currency split | 29.00% | 27.00% |
Cash and Cash Equivalents (Ex_5
Cash and Cash Equivalents (Excluding Overdrafts) - Summary of Cash and Cash Equivalents for Purpose of Cash Flow Statement (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents [line items] | ||||
Cash and cash equivalents | £ 568 | £ 518 | ||
Bank overdrafts - continuing operations | (43) | (15) | ||
Total cash and cash equivalents | £ 525 | 630 | £ 1,424 | £ 1,671 |
Asset held for sale [member] | ||||
Cash and cash equivalents [line items] | ||||
Cash and cash equivalents | £ 127 |
Financial Liabilities - Borro_3
Financial Liabilities - Borrowings - Summary of Current and Non - Current Borrowings (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Finance lease liabilities | £ 2 | £ 4 |
Non-current borrowings | 674 | 1,066 |
Finance lease liabilities | 3 | 4 |
Current borrowings | 46 | 19 |
Borrowings | 720 | 1,085 |
1.875% Euro notes 2021 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 233 | 463 |
3.75% US dollar notes 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 92 | 85 |
3.25% US dollar notes 2023 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 74 | 69 |
1.375% Euro notes 2025 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 273 | 445 |
Bank loans and overdrafts [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Current borrowings | £ 43 | £ 15 |
Financial Liabilities - Borro_4
Financial Liabilities - Borrowings - Summary of Current and Non - Current Borrowings (Parenthetical) (Detail) € in Millions, £ in Millions, $ in Millions | 12 Months Ended | |||||
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | |
Disclosure of detailed information about borrowings [line items] | ||||||
Nominal amount | £ | £ 2,250 | £ 2,750 | ||||
1.875% Euro notes 2021 [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Borrowings, interest rate | 1.875% | 1.875% | 1.875% | 1.875% | 1.875% | 1.875% |
Borrowings, maturity year | 2021 | 2021 | ||||
Nominal amount | € | € 250 | € 500 | ||||
3.75% US dollar notes 2022 [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Borrowings, interest rate | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% | 3.75% |
Borrowings, maturity year | 2022 | 2022 | ||||
Nominal amount | $ | $ 117 | $ 117 | ||||
3.25% US dollar notes 2023 [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Borrowings, interest rate | 3.25% | 3.25% | 3.25% | 3.25% | 3.25% | 3.25% |
Borrowings, maturity year | 2023 | 2023 | ||||
Nominal amount | $ | $ 94 | $ 94 | ||||
1.375% Euro notes 2025 [member] | ||||||
Disclosure of detailed information about borrowings [line items] | ||||||
Borrowings, interest rate | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% | 1.375% |
Borrowings, maturity year | 2025 | 2025 | ||||
Nominal amount | € | € 300 | € 500 |
Financial Liabilities - Borro_5
Financial Liabilities - Borrowings - Additional Information (Detail) $ in Millions | Dec. 31, 2018GBP (£) | Dec. 31, 2018USD ($) | Dec. 31, 2017GBP (£) | Dec. 31, 2017USD ($) |
Disclosure of detailed information about borrowings [abstract] | ||||
Accrued interest included in non-current borrowings | £ 6,000,000 | £ 10,000,000 | ||
Accrued interest included in current borrowings | 0 | 0 | ||
Undrawn borrowing capacity on revolving credit facility | £ 1,400,000,000 | $ 1,750 | £ 1,300,000,000 | $ 1,750 |
Financial Liabilities - Borro_6
Financial Liabilities - Borrowings - Summary of Maturities of the Group's Non-Current Borrowings (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 674 | £ 1,066 |
Later than one year and not later than two years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 1 | 3 |
Between two and five years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | 400 | 549 |
Later than five years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 273 | £ 514 |
Financial Liabilities - Borro_7
Financial Liabilities - Borrowings - Summary of Carrying Amounts and Market Value of Borrowings (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Current borrowings | £ 46 | £ 19 |
Non-current borrowings | 674 | 1,066 |
Finance lease liabilities | 5 | 8 |
Borrowings | 720 | 1,085 |
Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Finance lease liabilities | 5 | 8 |
Borrowings | 709 | 1,089 |
Bank loans and overdrafts [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Current borrowings | 43 | 15 |
Bank loans and overdrafts [member] | Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Current borrowings | 43 | 15 |
1.875% Euro notes 2021 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 233 | £ 463 |
Effective interest rate | 2.04% | 2.04% |
1.875% Euro notes 2021 [member] | Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 233 | £ 467 |
3.75% US dollar notes 2022 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 92 | £ 85 |
Effective interest rate | 3.94% | 3.94% |
3.75% US dollar notes 2022 [member] | Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 91 | £ 87 |
3.25% US dollar notes 2023 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 74 | £ 69 |
Effective interest rate | 3.36% | 3.36% |
3.25% US dollar notes 2023 [member] | Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 71 | £ 67 |
1.375% Euro notes 2025 [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 273 | £ 445 |
Effective interest rate | 1.44% | 1.44% |
1.375% Euro notes 2025 [member] | Market value [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Non-current borrowings | £ 266 | £ 445 |
Financial Liabilities - Borro_8
Financial Liabilities - Borrowings - Summary of Carrying Amounts of Borrowings which Denominated in Currencies (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | £ 720 | £ 1,085 |
US Dollars [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 188 | 172 |
Sterling [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 23 | 1 |
Euro [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | 506 | 911 |
Other currency [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Borrowings | £ 3 | £ 1 |
Financial Liabilities - Borro_9
Financial Liabilities - Borrowings - Summary of Maturities of the Group's Finance Lease Obligations (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Future finance charges on finance leases | £ 0 | £ 0 |
Present value of finance lease liabilities | 5 | 8 |
In less than one year [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Finance lease liabilities - minimum lease payments | 3 | 4 |
Later than one year and not later than two years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Finance lease liabilities - minimum lease payments | 1 | 3 |
Later than two years and not later than three years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Finance lease liabilities - minimum lease payments | £ 1 | £ 1 |
Financial Liabilities - Borr_10
Financial Liabilities - Borrowings - Summary of Present Value of Finance Lease Obligations (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of detailed information about borrowings [line items] | ||
Present value of finance lease Obligations | £ 5 | £ 8 |
In less than one year [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Present value of finance lease Obligations | 3 | 4 |
One to five years [member] | ||
Disclosure of detailed information about borrowings [line items] | ||
Present value of finance lease Obligations | £ 2 | £ 4 |
Financial Risk Management - Add
Financial Risk Management - Additional Information (Detail) £ in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Disclosure of net debt [line items] | ||||
Target ratio of net debt to EBITDA | 1.5 | |||
Target ratio of net debt to EBITDA post IFRS 16 | 2.2 | |||
Borrowings | £ 720 | £ 1,085 | ||
(Increase) decrease in adjusted operating profit translated at year end closing rates | 28 | |||
Adjusted operating profit | 546 | |||
Adjusted operating profit translated at year end closing rates | 574 | |||
(Increase) decrease in EBITDA translated at year end closing rates | 32 | |||
EBITDA | 698 | |||
EBITDA translated at year end closing rates | 730 | |||
Cash and cash equivalents (excluding overdrafts) | 568 | 518 | ||
Undrawn borrowing capacity on revolving credit facility | £ 1,400 | £ 1,300 | $ 1,750 | $ 1,750 |
Maturity period of trade payables | 1 year | 1 year | ||
Investment grade bank counterparties [member] | ||||
Disclosure of net debt [line items] | ||||
Percentage of cash and cash equivalents held with counter parties | 85.00% | |||
Net exposure with investment grade counterparties | £ 33 | |||
AAA money market fund counterparties [member] | ||||
Disclosure of net debt [line items] | ||||
Percentage of cash and cash equivalents held with counter parties | 7.00% | |||
Non-investment grade bank counterparties [member] | ||||
Disclosure of net debt [line items] | ||||
Percentage of cash and cash equivalents held with counter parties | 8.00% | |||
US Dollars [member] | ||||
Disclosure of net debt [line items] | ||||
Percentage of currency exposure to sales | 60.00% | |||
Borrowings | £ 188 | £ 172 | ||
Trade payables | 178 | 137 | ||
Sterling [member] | ||||
Disclosure of net debt [line items] | ||||
Borrowings | 23 | 1 | ||
Trade payables | 57 | 58 | ||
Other currency [member] | ||||
Disclosure of net debt [line items] | ||||
Borrowings | 3 | 1 | ||
Trade payables | 98 | 90 | ||
Due in 2021 [member] | ||||
Disclosure of net debt [line items] | ||||
Undrawn borrowing capacity on revolving credit facility | 1,400 | 1,300 | $ 1,750 | $ 1,750 |
Fixed interest rate [member] | ||||
Disclosure of net debt [line items] | ||||
Borrowings | 617 | 674 | ||
Floating interest rate [member] | ||||
Disclosure of net debt [line items] | ||||
Borrowings | £ 103 | £ 411 |
Financial Risk Management - Sum
Financial Risk Management - Summary of Net Debt Position (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of net debt [line items] | ||
Cash and cash equivalents | £ 568 | £ 645 |
Marketable securities | 8 | |
Derivative financial instruments | 9 | |
Financial liabilities | (1,112) | (1,661) |
Finance lease liabilities | (5) | (8) |
Net debt | (143) | (432) |
Bank loans and overdrafts [member] | ||
Disclosure of net debt [line items] | ||
Financial liabilities | (43) | (15) |
Bonds [member] | ||
Disclosure of net debt [line items] | ||
Financial liabilities | £ (672) | £ (1,062) |
Financial Risk Management - S_2
Financial Risk Management - Summary of Sensitivity of Carrying Value of Financial Instruments to Fluctuations in Interest Rates and Exchange Rates (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of financial instruments carrying value [line items] | ||
Financial assets | £ 1,682 | £ 1,652 |
Cash and cash equivalents | 568 | 645 |
Derivative financial instruments | 9 | |
Financial liabilities | (1,112) | (1,661) |
Other borrowings | (48) | |
Other net financial assets | 620 | |
Total financial instruments | 570 | |
Impact of 1% increase in interest rates | 14 | |
Impact of 1% decrease in interest rates | (14) | |
Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | (30) | |
Impact of 10% weakening in exchange rates | 38 | |
Investments in unlisted securities [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Financial assets | 93 | 77 |
Investments in unlisted securities [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | (7) | |
Impact of 10% weakening in exchange rates | 9 | |
Cash and cash equivalents [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Financial assets | 568 | 518 |
Cash and cash equivalents [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | (36) | |
Impact of 10% weakening in exchange rates | 45 | |
Derivative financial instruments [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Financial assets | 68 | 140 |
Derivative financial instruments | 9 | |
Impact of 1% increase in interest rates | (3) | |
Impact of 1% decrease in interest rates | 3 | |
Derivative financial instruments [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | 1 | |
Impact of 10% weakening in exchange rates | (1) | |
Bonds [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Financial liabilities | (672) | £ (1,062) |
Impact of 1% increase in interest rates | 17 | |
Impact of 1% decrease in interest rates | (17) | |
Bonds [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | 61 | |
Impact of 10% weakening in exchange rates | (74) | |
Other borrowings [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | 2 | |
Impact of 10% weakening in exchange rates | (3) | |
Other net financial assets [member] | Sterling [member] | ||
Disclosure of financial instruments carrying value [line items] | ||
Impact of 10% strengthening in exchange rates | (51) | |
Impact of 10% weakening in exchange rates | £ 62 |
Financial Risk Management - Sch
Financial Risk Management - Schedule of Contractual Undiscounted Cash Flows Analysed by Maturity and Currency (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | £ 722 | £ 1,154 |
Rate derivatives - inflows | (651) | (1,697) |
Rate derivatives - outflows | 653 | 1,775 |
FX forwards - inflows | (286) | |
FX forwards - outflows | 312 | |
Total | 750 | 1,232 |
US Dollars [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | 189 | 184 |
Rate derivatives - inflows | (40) | (53) |
Rate derivatives - outflows | 254 | 1,003 |
FX forwards - outflows | 312 | |
Total | 715 | 1,134 |
Sterling [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Rate derivatives - inflows | (167) | (751) |
Rate derivatives - outflows | 390 | 751 |
FX forwards - inflows | (286) | |
Total | (63) | |
Other currency [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | 533 | 970 |
Rate derivatives - inflows | (444) | (893) |
Rate derivatives - outflows | 9 | 21 |
Total | 98 | 98 |
In less than one year [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | 14 | 20 |
Rate derivatives - inflows | (20) | (38) |
Rate derivatives - outflows | 23 | 48 |
FX forwards - inflows | (251) | |
FX forwards - outflows | 275 | |
Total | 41 | 30 |
One to five years [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | 431 | 601 |
Rate derivatives - inflows | (288) | (975) |
Rate derivatives - outflows | 289 | 1,060 |
FX forwards - inflows | (35) | |
FX forwards - outflows | 37 | |
Total | 434 | 686 |
Later than five years [member] | ||
Disclosure of undiscounted cash flows financial assets liabilities [line items] | ||
Bonds | 277 | 533 |
Rate derivatives - inflows | (343) | (684) |
Rate derivatives - outflows | 341 | 667 |
Total | £ 275 | £ 516 |
Intangible Assets - Pre-publi_3
Intangible Assets - Pre-publication - Summary of Intangible Assets (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
At beginning of year | £ 741 | |
At end of year | 817 | £ 741 |
Cost [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
At beginning of year | 1,854 | 2,417 |
Exchange differences | 70 | (168) |
Additions | 328 | 362 |
Disposal through business disposal | (1) | |
Disposals | (158) | (248) |
Transfer from property, plant and equipment | 2 | |
Transfer to assets classified as held for sale | (508) | |
At end of year | 2,096 | 1,854 |
Depreciation [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
At beginning of year | (1,113) | (1,393) |
Exchange differences | (53) | 109 |
Charge for the year | (187) | (223) |
Disposals | 158 | 248 |
Transfer to assets classified as held for sale | 261 | |
At end of year | £ (1,279) | £ (1,113) |
Intangible Assets - Pre-publi_4
Intangible Assets - Pre-publication - Additional Information (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Intangible assets - pre-publication | £ 817 | £ 741 |
Assets and liabilities classified as held for sale [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Intangible assets - pre-publication | 242 | 247 |
Charge on pre-publication assets held for sale | 67 | |
Additions of pre-publication assets held for sale | 60 | |
More than 12 months past due date [member] | ||
Disclosure of reconciliation of changes in intangible assets and goodwill [line items] | ||
Intangible assets - pre-publication | £ 577 | £ 504 |
Inventories - Summary of Curren
Inventories - Summary of Current Inventories (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Classes of current inventories [abstract] | ||
Raw materials | £ 5 | £ 4 |
Work in progress | 2 | |
Finished goods | 149 | 142 |
Returns asset | 10 | |
Inventories | £ 164 | £ 148 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - GBP (£) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Classes of current inventories [abstract] | ||
Cost of inventories relating to continuing operations recognised as expense | £ 375,000,000 | £ 324,000,000 |
Inventory provisions charged in income statement | 39,000,000 | £ 38,000,000 |
Inventories pledged as security | 0 | |
Impairment charges against the inventory returns asset | £ 0 |
Trade and Other Receivables - S
Trade and Other Receivables - Summary of Trade and Other Receivables (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Current | ||
Trade receivables | £ 874 | £ 739 |
Royalty advances | 5 | 8 |
Prepayments | 103 | 82 |
Deferred contract costs | 1 | |
Accrued income | 2 | 1 |
Other receivables | 193 | 280 |
Trade and other current receivables | 1,178 | 1,110 |
Non-current | ||
Trade receivables | 30 | 21 |
Royalty advances | 21 | 20 |
Prepayments | 13 | 15 |
Deferred contract costs | 1 | |
Accrued income | 10 | 10 |
Other receivables | 25 | 37 |
Trade and other non current receivables | £ 100 | £ 103 |
Trade and Other Receivables - A
Trade and Other Receivables - Additional Information (Detail) £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Disclosure of other provisions [abstract] | |
Impairment charges on accrued income assets | £ 0 |
Sales return liability | £ 173 |
Trade and Other Receivables -_2
Trade and Other Receivables - Summary of Movements on Provision for Bad and Doubtful Debts (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of other provisions [abstract] | ||
At beginning of year | £ (116) | £ (112) |
Adjustment on initial application of IFRS 9 (see note 1c) | (12) | |
Exchange differences | 2 | 7 |
Income statement movements | (1) | (38) |
Utilised | 31 | 21 |
Disposal through business disposal | 1 | |
Transfer to assets classified as held for sale | 5 | |
At end of year | £ (96) | £ (116) |
Trade and Other Receivables -_3
Trade and Other Receivables - Summary of Ageing of Group's Trade Receivables (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade and other receivables [line items] | ||
Trade receivables | £ 904 | £ 930 |
Less: sales return liability | (170) | |
Net trade receivables | 904 | 760 |
Cost [member] | In less than one year [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | 606 | 661 |
Cost [member] | Up to three months past due date [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | 172 | 187 |
Cost [member] | Three to six months past due date [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | 72 | 48 |
Cost [member] | Six to nine months past due date [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | 16 | 18 |
Cost [member] | Nine to 12 months past due date [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | 24 | 13 |
Cost [member] | More than 12 months past due date [member] | ||
Trade and other receivables [line items] | ||
Trade receivables | £ 14 | £ 3 |
Provisions for Other Liabilit_3
Provisions for Other Liabilities and Charges - Summary of Provisions for Other Liabilities and Charges (Detail) £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Disclosure of other provisions [line items] | |
Beginning balance | £ 80 |
Exchange differences | 2 |
Charged to income statement | 106 |
Released to income statement | (7) |
Utilised | (15) |
Disposal through business disposal | (1) |
Ending balance | 165 |
Deferred consideration [member] | |
Disclosure of other provisions [line items] | |
Beginning balance | 45 |
Exchange differences | 2 |
Utilised | (5) |
Ending balance | 42 |
Property [member] | |
Disclosure of other provisions [line items] | |
Beginning balance | 3 |
Charged to income statement | 103 |
Released to income statement | (2) |
Utilised | (2) |
Ending balance | 102 |
Disposals and closures [member] | |
Disclosure of other provisions [line items] | |
Beginning balance | 11 |
Utilised | (5) |
Disposal through business disposal | (1) |
Ending balance | 5 |
Legal and other [member] | |
Disclosure of other provisions [line items] | |
Beginning balance | 21 |
Charged to income statement | 3 |
Released to income statement | (5) |
Utilised | (3) |
Ending balance | £ 16 |
Provisions for Other Liabilit_4
Provisions for Other Liabilities and Charges - Summary of Analysis of Provisions (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of other provisions [line items] | ||
Current | £ 20 | £ 25 |
Non-current | 145 | 55 |
Total | 165 | 80 |
Deferred consideration [member] | ||
Disclosure of other provisions [line items] | ||
Current | 6 | 5 |
Non-current | 36 | 40 |
Total | 42 | 45 |
Property [member] | ||
Disclosure of other provisions [line items] | ||
Current | 2 | 1 |
Non-current | 100 | 2 |
Total | 102 | 3 |
Disposals and closures [member] | ||
Disclosure of other provisions [line items] | ||
Current | 5 | 11 |
Total | 5 | 11 |
Legal and other [member] | ||
Disclosure of other provisions [line items] | ||
Current | 7 | 8 |
Non-current | 9 | 13 |
Total | £ 16 | £ 21 |
Provisions for Other Liabilit_5
Provisions for Other Liabilities and Charges - Additional Information (Detail) £ in Millions | Dec. 31, 2018GBP (£) |
Disclosure of other provisions [abstract] | |
Liability provision | £ 84 |
Trade and Other Liabilities - S
Trade and Other Liabilities - Summary of Trade and Other Liabilities (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Trade and other payables [abstract] | ||
Trade payables | £ 311 | £ 265 |
Sales return liability | 173 | |
Social security and other taxes | 16 | 21 |
Accruals | 397 | 447 |
Deferred income | 387 | 322 |
Interest payable | 46 | 45 |
Liability to purchase own shares | 151 | |
Other liabilities | 225 | 224 |
Trade and other payables | 1,555 | 1,475 |
Less: non-current portion | ||
Accruals | 15 | 26 |
Deferred income | 66 | 35 |
Other liabilities | 74 | 72 |
Non-current payables | 155 | 133 |
Current portion | £ 1,400 | £ 1,342 |
Trade and Other Liabilities - A
Trade and Other Liabilities - Additional Information (Detail) - IFRS 15 [member] £ in Millions | 12 Months Ended |
Dec. 31, 2018GBP (£) | |
Trade and other payables [line items] | |
Sales return liability | £ 173 |
Increase in deferred income | £ 28 |
Retirement Benefit and Other _3
Retirement Benefit and Other Post-retirement Obligations - Additional Information (Detail) £ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019GBP (£) | Oct. 31, 2018GBP (£) | Dec. 31, 2018GBP (£)Member | Dec. 31, 2017GBP (£) | Jan. 01, 2018GBP (£) | Dec. 31, 2016 | |
Disclosure of defined benefit plans [line items] | ||||||
Past service cost | £ 8 | £ 8 | ||||
Additional liability for defined benefit obligation | £ 8 | |||||
Curtailment gain from changes made to US PRMB | 11 | |||||
Liability of reference scheme test | 23 | £ 32 | ||||
Gross assets of defined contribution section | £ 453 | |||||
Expected rate of increase in salaries | 3.80% | |||||
Percentage of long-term rate improvement on CMI model | 1.50% | |||||
Net pension asset/(liability) | £ 533 | £ 519 | ||||
UK [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Weighted average duration of defined benefit obligation | 16 years 1 month 6 days | |||||
United States [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Weighted average duration of defined benefit obligation | 7 years 1 month 6 days | |||||
CPI rate [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Inflation rate | 2.30% | |||||
UK Group plan [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Past service cost | £ 8 | |||||
Number of members under plan | Member | 24,000 | |||||
Inflation rate | 3.30% | 3.20% | 3.30% | |||
Expected rate of increase in salaries | 3.80% | 3.70% | 3.80% | |||
Net pension asset/(liability) | £ 569 | £ 545 | £ 163 | |||
Allocated percentage of fund to matching assets | 85.00% | |||||
Allocated percentage of fund to return seeking assets | 15.00% | |||||
Expected contributions in 2018 | 3 | |||||
UK Group plan [member] | RPI rate [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Inflation rate | 3.30% | |||||
Aviva and legal and general [member] | Buy-in policies [member] | UK Group plan [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Insurance expense | £ 1,200 | |||||
Percentage of pensioner liabilities matched with buy in policies | 95.00% | |||||
Legal & general [member] | Pensioner buy in policy [member] | UK Group plan [member] | Events after reporting period [member] | ||||||
Disclosure of defined benefit plans [line items] | ||||||
Insurance expense | £ 500 |
Retirement Benefit and Other _4
Retirement Benefit and Other Post-retirement Obligations - Summary of Defined Plan Analysis (Detail) - UK Group plan [member] | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of defined benefit plans [line items] | |
Defined benefit | 61.00% |
Defined contribution | 39.00% |
Total | 100.00% |
Active [member] | |
Disclosure of defined benefit plans [line items] | |
Defined benefit | 1.00% |
Defined contribution | 9.00% |
Total | 10.00% |
Deferred [member] | |
Disclosure of defined benefit plans [line items] | |
Defined benefit | 25.00% |
Defined contribution | 30.00% |
Total | 55.00% |
Pensioners [member] | |
Disclosure of defined benefit plans [line items] | |
Defined benefit | 35.00% |
Total | 35.00% |
Retirement Benefit and Other _5
Retirement Benefit and Other Post-retirement Obligations - Summary of Principal Assumptions Used for UK Group Plan and US PRMB (Detail) | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Disclosure of defined benefit plans [line items] | |||
Expected rate of increase in salaries | 3.80% | ||
UK Group plan [member] | |||
Disclosure of defined benefit plans [line items] | |||
Inflation | 3.30% | 3.20% | 3.30% |
Rate used to discount plan liabilities | 2.80% | 2.50% | 2.50% |
Expected rate of increase in salaries | 3.80% | 3.70% | 3.80% |
Other plans [member] | |||
Disclosure of defined benefit plans [line items] | |||
Inflation | 1.60% | 1.60% | 1.60% |
Rate used to discount plan liabilities | 4.00% | 3.00% | 3.80% |
Expected rate of increase in salaries | 2.90% | 3.00% | 3.00% |
PRMB [member] | |||
Disclosure of defined benefit plans [line items] | |||
Inflation | 1.50% | 1.50% | 1.50% |
Rate used to discount plan liabilities | 4.10% | 3.00% | 3.90% |
Expected rate of increase in salaries | 3.00% | 3.00% | 3.00% |
Bottom of range [member] | UK Group plan [member] | |||
Disclosure of defined benefit plans [line items] | |||
Expected rate of increase for pensions in payment and deferred pensions | 2.10% | 2.10% | 2.20% |
Top of range [member] | UK Group plan [member] | |||
Disclosure of defined benefit plans [line items] | |||
Expected rate of increase for pensions in payment and deferred pensions | 5.10% | 5.10% | 5.10% |
Initial rate of increase in healthcare rate [member] | PRMB [member] | |||
Disclosure of defined benefit plans [line items] | |||
Rate of increase in healthcare rate | 7.00% | 6.50% | 6.80% |
Ultimate rate of increase in healthcare rate [member] | PRMB [member] | |||
Disclosure of defined benefit plans [line items] | |||
Rate of increase in healthcare rate | 5.50% | 5.00% | 5.00% |
Retirement Benefit and Other _6
Retirement Benefit and Other Post-retirement Obligations - Summary of Remaining Average Life Expectancy in Years of Pensioner Retiring at Age 65 (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
UK [member] | ||
Disclosure of defined benefit plans [line items] | ||
Male | 23 years 9 months 18 days | 23 years 7 months 6 days |
Female | 24 years 6 months | 25 years 8 months 12 days |
Male | 25 years 4 months 24 days | 25 years 8 months 12 days |
Female | 26 years 3 months 18 days | 27 years 10 months 24 days |
United States [member] | ||
Disclosure of defined benefit plans [line items] | ||
Male | 20 years 8 months 12 days | 20 years 9 months 18 days |
Female | 22 years 8 months 12 days | 22 years 9 months 18 days |
Male | 22 years 3 months 18 days | 22 years 6 months |
Female | 24 years 2 months 12 days | 24 years 4 months 24 days |
Retirement Benefit and Other _7
Retirement Benefit and Other Post-retirement Obligations - Summary of Amounts Recognised in Income Statement (Detail) - GBP (£) £ in Millions | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | £ 64 | £ 65 | £ 77 | |
Past service cost | £ 8 | 8 | ||
Curtailments | (11) | (2) | ||
Administration expenses | 6 | 10 | 6 | |
Total operating expense | 67 | 75 | 81 | |
Interest on plan assets | (87) | (89) | (110) | |
Interest on plan liabilities | 76 | 86 | 99 | |
Net finance (income)/expense | (11) | (3) | (11) | |
Net income statement charge | 56 | 72 | 70 | |
UK Group plan [member] | ||||
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | 7 | 8 | 8 | |
Past service cost | 8 | |||
Administration expenses | 6 | 9 | 6 | |
Total operating expense | 21 | 17 | 14 | |
Interest on plan assets | (82) | (84) | (104) | |
Interest on plan liabilities | 68 | 77 | 89 | |
Net finance (income)/expense | (14) | (7) | (15) | |
Net income statement charge | 7 | 10 | (1) | |
Defined benefit other [member] | ||||
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | 2 | 1 | 2 | |
Administration expenses | 1 | |||
Total operating expense | 2 | 2 | 2 | |
Interest on plan assets | (5) | (5) | (6) | |
Interest on plan liabilities | 6 | 7 | 7 | |
Net finance (income)/expense | 1 | 2 | 1 | |
Net income statement charge | 3 | 4 | 3 | |
Sub-total [member] | ||||
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | 9 | 9 | 10 | |
Past service cost | 8 | |||
Administration expenses | 6 | 10 | 6 | |
Total operating expense | 23 | 19 | 16 | |
Interest on plan assets | (87) | (89) | (110) | |
Interest on plan liabilities | 74 | 84 | 96 | |
Net finance (income)/expense | (13) | (5) | (14) | |
Net income statement charge | 10 | 14 | 2 | |
Defined contribution [member] | ||||
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | 56 | 57 | 67 | |
Total operating expense | 56 | 57 | 67 | |
Net income statement charge | 56 | 57 | 67 | |
PRMB [member] | ||||
Disclosure of defined benefit plans expense recognized in income statement [line items] | ||||
Current service cost | (1) | (1) | ||
Curtailments | (11) | (2) | ||
Total operating expense | (12) | (1) | (2) | |
Interest on plan liabilities | 2 | 2 | 3 | |
Net finance (income)/expense | 2 | 2 | 3 | |
Net income statement charge | £ (10) | £ 1 | £ 1 |
Retirement Benefit and Other _8
Retirement Benefit and Other Post-retirement Obligations - Summary of Amounts Recognised in Balance Sheet (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Disclosure of net defined benefit liability (asset) [line items] | |||
Fair value of plan assets | £ 3,381 | £ 3,492 | |
Present value of defined benefit obligation | (2,848) | (2,973) | |
Net pension asset/(liability) | 533 | 519 | |
Other post-retirement medical benefit obligation | (49) | (67) | |
Other pension accruals | (13) | (11) | |
Net retirement benefit asset | 471 | 441 | |
Retirement benefit assets | 571 | 545 | |
Retirement benefit obligations | (100) | (104) | |
UK Group plan [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Fair value of plan assets | 3,240 | 3,337 | |
Present value of defined benefit obligation | (2,671) | (2,792) | |
Net pension asset/(liability) | 569 | £ 163 | 545 |
Other funded plans [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Fair value of plan assets | 141 | 155 | |
Present value of defined benefit obligation | (158) | (161) | |
Net pension asset/(liability) | (17) | (6) | |
Other unfunded plans [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Present value of defined benefit obligation | (19) | (20) | |
Net pension asset/(liability) | £ (19) | £ (20) |
Retirement Benefit and Other _9
Retirement Benefit and Other Post-retirement Obligations - Summary of Gains (Losses) Recognised in Other Comprehensive Income (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of defined benefit plans gain loss recognised [line items] | |||
Gains (losses)recognised for benefit plans | £ 22 | £ 175 | £ (268) |
Defined benefit plan [member] | |||
Disclosure of defined benefit plans gain loss recognised [line items] | |||
Gains (losses)recognised for benefit plans | 16 | £ 175 | (277) |
PRMB [member] | |||
Disclosure of defined benefit plans gain loss recognised [line items] | |||
Gains (losses)recognised for benefit plans | £ 6 | £ 9 |
Retirement Benefit and Other_10
Retirement Benefit and Other Post-retirement Obligations - Summary of Fair Value of Plan Assets (Detail) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Insurance [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 29.00% | 29.00% |
Insurance [member] | UK Group plan [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 28.00% | 29.00% |
Insurance [member] | Other plans [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 1.00% | |
Equities [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 2.00% | 2.00% |
Equities [member] | UK Group plan [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 1.00% | 1.00% |
Equities [member] | Other plans [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 1.00% | 1.00% |
Bonds [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 2.00% | 3.00% |
Bonds [member] | Other plans [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 2.00% | 3.00% |
Property [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 7.00% | 8.00% |
Property [member] | UK Group plan [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 7.00% | 8.00% |
Pooled asset investment funds [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 44.00% | 44.00% |
Pooled asset investment funds [member] | UK Group plan [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 44.00% | 44.00% |
Other [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 16.00% | 14.00% |
Other [member] | UK Group plan [member] | ||
Disclosure of fair value of plan assets [line items] | ||
Fair value of plan assets | 16.00% | 14.00% |
Retirement Benefit and Other_11
Retirement Benefit and Other Post-retirement Obligations - Summary of of Quoted and Non Quoted Market Price (Detail) | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of quoted and non quoted plane asset [line items] | ||
Quoted market price | 75.00% | 76.00% |
No quoted market price | 25.00% | 24.00% |
Insurance [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
Quoted market price | 29.00% | 29.00% |
Non-UK equities [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
No quoted market price | 2.00% | 2.00% |
Fixed-interest securities [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
Quoted market price | 2.00% | 3.00% |
Property [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
No quoted market price | 7.00% | 8.00% |
Pooled asset investment funds [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
Quoted market price | 44.00% | 44.00% |
Other [member] | ||
Disclosure of quoted and non quoted plane asset [line items] | ||
No quoted market price | 16.00% | 14.00% |
Retirement Benefit and Other_12
Retirement Benefit and Other Post-retirement Obligations - Summary of Liquidity Profile of UK Group Plan Assets (Detail) - UK Group plan [member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Later than 3 months [member] | ||
Disclosure of liquidity profile [line items] | ||
Liquidity percentage of plan asset | 49.00% | 50.00% |
Not later than 1 month [member] | ||
Disclosure of liquidity profile [line items] | ||
Liquidity percentage of plan asset | 51.00% | 50.00% |
Retirement Benefit and Other_13
Retirement Benefit and Other Post-retirement Obligations - Summary of Changes in Values of Plan Assets and Liabilities (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening fair value of plan assets | £ 3,492 | ||
Interest on plan assets | (87) | £ (89) | £ (110) |
Interest on plan liabilities | 76 | 86 | 99 |
Closing fair value of plan assets | 3,381 | 3,492 | |
Fair value of plan assets [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening fair value of plan assets | 3,492 | 3,497 | |
Exchange differences | 4 | (8) | |
Interest on plan assets | 87 | 89 | |
Return on plan assets excluding interest | (58) | (130) | |
Contributions by employer | 7 | 242 | |
Benefits paid | (151) | (206) | |
Other | 8 | ||
Closing fair value of plan assets | 3,381 | 3,492 | 3,497 |
Present value of defined benefit obligation [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening defined benefit obligation | (2,973) | (3,386) | |
Exchange differences | (3) | 13 | |
Current service cost | (9) | (9) | |
Past service cost | (8) | ||
Administration expenses | (6) | (10) | |
Interest on plan liabilities | (74) | (84) | |
Actuarial gains/(losses) - experience | (51) | 132 | |
Actuarial gains/(losses) - demographic | (12) | 134 | |
Actuarial gains/(losses) - financial | 137 | 39 | |
Contributions by employee | 0 | 0 | |
Other | (8) | ||
Benefits paid | 151 | 206 | |
Closing defined benefit obligation | (2,848) | (2,973) | (3,386) |
UK Group plan [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening fair value of plan assets | 3,337 | ||
Interest on plan assets | (82) | (84) | (104) |
Interest on plan liabilities | 68 | 77 | 89 |
Closing fair value of plan assets | 3,240 | 3,337 | |
UK Group plan [member] | Fair value of plan assets [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening fair value of plan assets | 3,337 | 3,339 | |
Interest on plan assets | 82 | 84 | |
Return on plan assets excluding interest | (45) | (140) | |
Contributions by employer | 6 | 234 | |
Benefits paid | (140) | (188) | |
Other | 8 | ||
Closing fair value of plan assets | 3,240 | 3,337 | 3,339 |
UK Group plan [member] | Present value of defined benefit obligation [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening defined benefit obligation | (2,792) | (3,181) | |
Current service cost | (7) | (8) | |
Past service cost | (8) | ||
Administration expenses | (6) | (9) | |
Interest on plan liabilities | (68) | (77) | |
Actuarial gains/(losses) - experience | (49) | 126 | |
Actuarial gains/(losses) - demographic | (12) | 133 | |
Actuarial gains/(losses) - financial | 131 | 44 | |
Contributions by employee | 0 | 0 | |
Other | (8) | ||
Benefits paid | 140 | 188 | |
Closing defined benefit obligation | (2,671) | (2,792) | (3,181) |
Other plans [member] | Fair value of plan assets [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening fair value of plan assets | 155 | 158 | |
Exchange differences | 4 | (8) | |
Interest on plan assets | 5 | 5 | |
Return on plan assets excluding interest | (13) | 10 | |
Contributions by employer | 1 | 8 | |
Benefits paid | (11) | (18) | |
Closing fair value of plan assets | 141 | 155 | 158 |
Other plans [member] | Present value of defined benefit obligation [member] | |||
Disclosure of net defined benefit liability (asset) [line items] | |||
Opening defined benefit obligation | (181) | (205) | |
Exchange differences | (3) | 13 | |
Current service cost | (2) | (1) | |
Administration expenses | (1) | ||
Interest on plan liabilities | (6) | (7) | |
Actuarial gains/(losses) - experience | (2) | 6 | |
Actuarial gains/(losses) - demographic | 1 | ||
Actuarial gains/(losses) - financial | 6 | (5) | |
Contributions by employee | 0 | 0 | |
Benefits paid | 11 | 18 | |
Closing defined benefit obligation | £ (177) | £ (181) | £ (205) |
Retirement Benefit and Other_14
Retirement Benefit and Other Post-retirement Obligations - Summary of Changes in Value of US PRMB (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of defined benefit plans [line items] | |||
Opening defined benefit obligation | £ (67) | ||
Interest on plan liabilities | 76 | £ 86 | £ 99 |
Closing defined benefit obligation | (49) | (67) | |
PRMB [member] | |||
Disclosure of defined benefit plans [line items] | |||
Interest on plan liabilities | 2 | 2 | 3 |
Present value of defined benefit obligation [member] | |||
Disclosure of defined benefit plans [line items] | |||
Exchange differences | (3) | 13 | |
Current service cost | 9 | 9 | |
Curtailments | (8) | ||
Interest on plan liabilities | (74) | (84) | |
Actuarial gains/(losses) - experience | (51) | 132 | |
Actuarial gains/(losses) - demographic | (12) | 134 | |
Actuarial gains/(losses) - financial | 137 | 39 | |
Benefits paid | 151 | 206 | |
Present value of defined benefit obligation [member] | PRMB [member] | |||
Disclosure of defined benefit plans [line items] | |||
Opening defined benefit obligation | (67) | (77) | |
Exchange differences | (2) | 5 | |
Current service cost | 1 | 1 | |
Curtailments | 11 | ||
Interest on plan liabilities | (2) | (2) | |
Actuarial gains/(losses) - experience | 4 | 1 | |
Actuarial gains/(losses) - demographic | 1 | ||
Actuarial gains/(losses) - financial | 2 | (2) | |
Benefits paid | 4 | 6 | |
Closing defined benefit obligation | £ (49) | £ (67) | £ (77) |
Retirement Benefit and Other_15
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect Percentage of Discount Rate Increase (Decrease) on Defined Benefit Obligation and Total Pension Expense (Detail) - Rate used to discount plan liabilities [member] £ in Millions | Dec. 31, 2018GBP (£) |
UK Group plan [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 1% increase in discount rate | £ (386) |
(Decrease) /increase in defined benefit obligation, 1% decrease in discount rate | 522 |
US defined benefit pension plans [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 1% increase in discount rate | (11) |
US defined benefit pension plans [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 1% decrease in discount rate | £ 13 |
Retirement Benefit and Other_16
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect Percentage of Discount Rate Increase (Decrease) on Defined Benefit Obligation and Total Pension Expense (Parenthetical) (Detail) - Rate used to discount plan liabilities [member] | Dec. 31, 2018 |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Percentage movement in discount rate sensitivity analysis | 1.00% |
Percentage movement in discount rate sensitivity analysis | 1.00% |
Retirement Benefit and Other_17
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect of Members Living One Year More or One Year Less on the Defined Benefit Obligation (Detail) - Actuarial Assumption of Longevity [member] £ in Millions | Dec. 31, 2018GBP (£) |
UK Group plan [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 1 year increase | £ 143 |
(Decrease) /increase in defined benefit obligation, 1 year decrease | (138) |
US defined benefit pension plans [member] | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 1 year increase | 7 |
(Decrease) /increase in defined benefit obligation, 1 year decrease | £ (8) |
Retirement Benefit and Other_18
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect of Members Living One Year More or One Year Less on the Defined Benefit Obligation (Parenthetical) (Detail) - Actuarial Assumption of Longevity [member] | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Movement in mortality sensitivity analysis | 1 year |
Movement in mortality sensitivity analysis | 1 year |
Retirement Benefit and Other_19
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect of a Half Percentage Point Increase and Decrease in the Inflation Rate (Detail) - UK Group plan [member] - Inflation [member] £ in Millions | Dec. 31, 2018GBP (£) |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
(Decrease) /increase in defined benefit obligation, 0.5% increase | £ 129 |
(Decrease) /increase in defined benefit obligation, 0.5% decrease | £ (114) |
Retirement Benefit and Other_20
Retirement Benefit and Other Post-retirement Obligations - Summary of Effect of a Half Percentage Point Increase and Decrease in the Inflation Rate (Parenthetical) (Detail) - Inflation [member] | Dec. 31, 2018 |
Disclosure of sensitivity analysis for actuarial assumptions [line items] | |
Movement in inflation sensitivity analysis | 0.50% |
Movement in inflation sensitivity analysis | 0.50% |
Share-Based Payments - Summary
Share-Based Payments - Summary of Charges in Income Statement in Respect of Equity-Settled Share-Based Payment Plans (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | |||
Share-based payment charges | £ 37 | £ 33 | £ 22 |
Share-based payments - Addition
Share-based payments - Additional Information (Detail) - GBP (£) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Weighted average share price during the year | £ 8.45 | £ 6.71 |
Information about how expected volatility was determined, share options granted | The expected volatility is based on the historical volatility of the company’s share price over the previous three to seven years depending on the vesting term of the options. | |
Worldwide Save for Shares Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Stock option percentage of market price | 80.00% | |
Option expiration period | 6 months | |
Worldwide Save for Shares Plan [member] | Bottom of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
length of share-based plans | 3 years | |
Worldwide Save for Shares Plan [member] | Top of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
length of share-based plans | 5 years | |
Employee Stock Purchase Plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
length of share-based plans | 6 months | |
Percentage of market price considering in share-based plans | 85.00% | |
Long-term incentive plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Corporate performance target period | 3 years | |
Description of vesting requirements for share-based payment arrangement | The vesting of restricted shares is normally dependent on continuing service over a three-to five-year period, and in the case of executive directors and senior management upon the satisfaction of corporate performance targets over a three-year period. These targets may be based on market and/or non-market performance criteria. Restricted shares awarded to executive directors in May 2018 and September 2017 vest dependent on relative total shareholder return, return on invested capital and adjusted earnings per share growth. Restricted shares awarded to senior management in March 2017 vest dependent on adjusted earnings per share growth. Other restricted shares awarded in 2018 and 2017 vest depending on continuing service over periods of up to three years. | |
Long-term incentive plan [member] | Restricted shares [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Vesting period | 3 years | |
Long-term incentive plan [member] | Bottom of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Vesting period | 3 years | |
Long-term incentive plan [member] | Top of range [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Vesting period | 5 years | |
Management incentive plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Vesting period | 3 years | |
Description of vesting requirements for share-based payment arrangement | Subsequently, the shares vest dependent on continuing service over a three year period, and additionally in the case of Pearson Executive Management upon satisfaction of non-market based performance criteria as determined by the Remuneration Committee. Restricted shares awarded as part of the 2017 Management Incentive Plan were granted in April 2018. Restricted shares awarded as part of the 2018 Management Incentive Plan will be granted in April 2019. |
Share-Based Payments - Summar_2
Share-Based Payments - Summary of Number and Weighted Average Exercise Prices of Share Options Granted under Group's Plans (Detail) pure in Thousands | 12 Months Ended | |
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | ||
Number of share options, Outstanding at beginning of year | 2,981 | 2,978 |
Number of share options, Granted during the year | 729 | 1,619 |
Number of share options, Exercised during the year | (70) | (9) |
Number of share options, Forfeited during the year | (668) | (1,451) |
Number of share options, Expired during the year | (244) | (156) |
Number of share options, Outstanding at end of year | 2,728 | 2,981 |
Number of share options, Options exercisable at end of year | 169 | 350 |
Weighted average exercise price, Outstanding at beginning of year | £ 6.84 | £ 8.14 |
Weighted average exercise price, Granted during the year | 5.80 | 5.50 |
Weighted average exercise price, Exercised during the year | 6.57 | 7 |
Weighted average exercise price, Forfeited during the year | 7.58 | 8.04 |
Weighted average exercise price, Expired during the year | 8.19 | 9.09 |
Weighted average exercise price, Outstanding at end of year | 5.76 | 6.84 |
Weighted average exercise price, Options exercisable at end of year | £ 11.31 | £ 8.18 |
Share-Based Payments - Summar_3
Share-Based Payments - Summary of Weighted Average Remaining Contractual Lives and Exercise Prices of Options Outstanding (Detail) pure in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Weighted average contractual life Years | 2 years 1 month 28 days | 2 years 4 months 24 days | |
Number of share options | 2,728 | 2,981 | 2,978 |
5-10 [member] | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Weighted average contractual life Years | 2 years 3 months 14 days | 2 years 6 months 7 days | |
Number of share options | 2,553 | 2,697 | |
>10 [member] | |||
Disclosure of number and weighted average remaining contractual life of outstanding share options [line items] | |||
Weighted average contractual life Years | 3 months 14 days | 1 year 2 months 26 days | |
Number of share options | 175 | 284 |
Share-Based Payments - Summar_4
Share-Based Payments - Summary of Weighted Average Estimated Fair Values and Inputs into Black-Scholes Model (Detail) - GBP (£) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of terms and conditions of share-based payment arrangement [abstract] | ||
Fair value | £ 1.88 | £ 1.24 |
Weighted average share price | 7.49 | 6.83 |
Weighted average exercise price | £ 5.80 | £ 5.50 |
Expected volatility | 35.78% | 34.75% |
Expected life | 3 years 8 months 12 days | 3 years 8 months 12 days |
Risk-free rate | 0.87% | 0.20% |
Expected dividend yield | 5.21% | 7.61% |
Forfeiture rate | 3.20% | 3.20% |
Share-Based Payments - Summar_5
Share-Based Payments - Summary of Shares Granted under Restricted Share Arrangements (Detail) - Restricted shares [member] pure in Thousands | 12 Months Ended | |
Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | |
Long-term incentive plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of shares | 2,907 | 6,453 |
Weighted average fair value | £ 7.55 | £ 6.61 |
Management incentive plan [member] | ||
Disclosure of terms and conditions of share-based payment arrangement [line items] | ||
Number of shares | 2,035 | |
Weighted average fair value | £ 7.45 |
Share Capital and Share Premi_3
Share Capital and Share Premium - Summary of Share Capital and Share Premium (Detail) - GBP (£) shares in Thousands, £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of classes of share capital [line items] | |||
Beginning Balance | £ 4,021 | £ 4,348 | £ 6,418 |
Issue of ordinary shares - share option schemes | 6 | 5 | 7 |
Ending balance | £ 4,525 | £ 4,021 | £ 4,348 |
Beginning Balance | 802,054 | 822,127 | |
Issue of ordinary shares - share option schemes | 864 | 923 | |
Purchase of own shares | (21,840) | (20,996) | |
Ending Balance | 781,078 | 802,054 | 822,127 |
Share premium [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning Balance | £ 2,602 | £ 2,597 | £ 2,590 |
Issue of ordinary shares - share option schemes | 5 | 5 | 7 |
Ending balance | 2,607 | 2,602 | 2,597 |
Share capital [member] | |||
Disclosure of classes of share capital [line items] | |||
Beginning Balance | 200 | 205 | |
Issue of ordinary shares - share option schemes | 1 | ||
Purchase of own shares | (6) | (5) | |
Ending balance | £ 195 | £ 200 | £ 205 |
Share Capital and Share Premi_4
Share Capital and Share Premium - Additional Information (Detail) - GBP (£) £ / shares in Units, £ in Millions, shares in Millions | Jan. 18, 2018 | Oct. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 |
Disclosure of classes of share capital [abstract] | ||||
Par value per share | £ 0.25 | £ 0.25 | ||
Amount of shares authorized for repurchase | £ 300 | |||
Number of shares repurchased | 22 | 21 | ||
Value of shares repurchased | £ 153 | |||
Value of shares repurchased and cancelled | £ 149 | |||
Cash payments for share repurchases | £ 4 | 149 | ||
Liabilities to repurchase own shares | 147 | |||
Nominal value of canceled shares | £ 5 | £ 11 |
Treasury shares - Schedule of T
Treasury shares - Schedule of Treasury Shares (Detail) - GBP (£) shares in Thousands, £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [abstract] | ||
Beginning Balance | 5,994 | 7,719 |
Purchase of treasury shares | 0 | 0 |
Release of treasury shares | (2,769) | (1,725) |
Ending Balance | 3,225 | 5,994 |
Beginning Balance | £ 61 | £ 79 |
Purchase of treasury shares | 0 | 0 |
Release of treasury shares | (28) | (18) |
Ending Balance | £ 33 | £ 61 |
Treasury shares - Additional In
Treasury shares - Additional Information (Detail) - GBP (£) £ / shares in Units, £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Treasury shares transaction [line items] | ||
Percentage of called up share capital | 0.40% | 0.80% |
Treasury shares held, par value | £ 0.25 | £ 0.25 |
Treasury shares, nominal value | £ 0.8 | £ 1.5 |
Treasury shares, market value | £ 30 | £ 44 |
Treasury shares [member] | ||
Treasury shares transaction [line items] | ||
Treasury shares held, par value | £ 0.25 |
Other Comprehensive Income - Sc
Other Comprehensive Income - Schedule of Other Comprehensive Income (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Items that may be reclassified to the income statement | |||
Currency translation adjustment disposed | £ (4) | £ (51) | |
Attributable tax | (4) | 9 | £ (5) |
Items that are not reclassified to the income statement | |||
Fair value gain on other financial assets | 8 | 13 | |
Attributable tax | (4) | ||
Attributable tax | 9 | (42) | 58 |
Other comprehensive income/(expense) for the year | 124 | (155) | 690 |
Group [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | 91 | (158) | 910 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 22 | 175 | (268) |
Associates [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | (1) | (104) | 3 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 3 | 7 | (8) |
Fair value reserve [member] | |||
Items that are not reclassified to the income statement | |||
Fair value gain on other financial assets | 8 | 13 | |
Other comprehensive income/(expense) for the year | 8 | 13 | |
Translation reserve [member] | |||
Items that may be reclassified to the income statement | |||
Currency translation adjustment disposed | (4) | (51) | |
Items that are not reclassified to the income statement | |||
Other comprehensive income/(expense) for the year | 86 | (313) | 912 |
Translation reserve [member] | Group [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | 91 | (158) | 909 |
Translation reserve [member] | Associates [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | (1) | (104) | 3 |
Retained earnings [member] | |||
Items that may be reclassified to the income statement | |||
Attributable tax | (4) | 9 | (5) |
Items that are not reclassified to the income statement | |||
Attributable tax | (4) | ||
Attributable tax | 9 | (42) | 58 |
Other comprehensive income/(expense) for the year | 30 | 145 | (223) |
Retained earnings [member] | Group [member] | |||
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 22 | 175 | (268) |
Retained earnings [member] | Associates [member] | |||
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 3 | 7 | (8) |
Equity attributable to equity holders of the company [member] | |||
Items that may be reclassified to the income statement | |||
Currency translation adjustment disposed | (4) | (51) | |
Attributable tax | (4) | 9 | (5) |
Items that are not reclassified to the income statement | |||
Fair value gain on other financial assets | 8 | 13 | |
Attributable tax | (4) | ||
Attributable tax | 9 | (42) | 58 |
Other comprehensive income/(expense) for the year | 124 | (155) | 689 |
Equity attributable to equity holders of the company [member] | Group [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | 91 | (158) | 909 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | 22 | 175 | (268) |
Equity attributable to equity holders of the company [member] | Associates [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | (1) | (104) | 3 |
Items that are not reclassified to the income statement | |||
Remeasurement of retirement benefit obligations | £ 3 | £ 7 | (8) |
Non-controlling interest [member] | |||
Items that are not reclassified to the income statement | |||
Other comprehensive income/(expense) for the year | 1 | ||
Non-controlling interest [member] | Group [member] | |||
Items that may be reclassified to the income statement | |||
Net exchange differences on translation of foreign operations | £ 1 |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) - Acquisition | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of detailed information about business combination [abstract] | ||
Number of significant acquisitions during period | 0 | 0 |
Business Combinations - Schedul
Business Combinations - Schedule of Cash Flow on Acquisitions (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of detailed information about business combination [line items] | |||
Net cash outflow | £ (5) | £ (11) | £ (15) |
Business combinations [member] | |||
Disclosure of detailed information about business combination [line items] | |||
Deferred payments for prior year acquisitions and other items | (5) | (11) | (7) |
Cash - current year acquisitions | (7) | ||
Acquisition costs and other acquisition liabilities paid | (1) | ||
Net cash outflow | £ (5) | £ (11) | £ (15) |
Disposals - Additional Informat
Disposals - Additional Information (Detail) - GBP (£) £ in Millions | 1 Months Ended | |
May 31, 2018 | Mar. 31, 2018 | |
WSE [member] | ||
Disclosure of disposal of subsidiaries [line items] | ||
Pre-tax gain on sale of subsidiaries and associates | £ 207 | |
Tax on disposal of subsidiaries and associates | £ 6 | |
UTEL [member] | ||
Disclosure of disposal of subsidiaries [line items] | ||
Pre-tax gain on sale of subsidiaries and associates | £ 19 | |
Tax on disposal of subsidiaries and associates | £ 2 |
Disposals - Schedule of Disposa
Disposals - Schedule of Disposals Including Business Closures (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of disposal of subsidiaries [line items] | |||
Property, plant and equipment | £ (237) | £ (281) | £ (343) |
Investments in joint ventures and associates | (392) | (398) | |
Intangible assets - pre-publication | (817) | (741) | |
Inventories | (164) | (148) | |
Trade and other receivables | (1,178) | (1,110) | |
Cash and cash equivalents (excluding overdrafts) | (568) | (518) | |
Trade and other liabilities | 1,400 | 1,342 | |
Provisions for other liabilities and charges | 145 | 55 | |
Net (assets)/liabilities disposed | 4,525 | 4,021 | |
Disposal of subsidiaries and associates [member] | |||
Disclosure of disposal of subsidiaries [line items] | |||
Property, plant and equipment | (17) | (7) | (3) |
Intangible assets | (17) | (9) | |
Investments in joint ventures and associates | (3) | (352) | |
Net deferred income tax assets | (3) | (10) | |
Intangible assets - pre-publication | (8) | (1) | (4) |
Inventories | (1) | (2) | |
Trade and other receivables | (30) | (16) | (6) |
Current income tax (receivable)/payable | (5) | ||
Cash and cash equivalents (excluding overdrafts) | (119) | (13) | (9) |
Net deferred income tax liabilities | 16 | ||
Trade and other liabilities | 172 | 34 | 21 |
Provisions for other liabilities and charges | 1 | ||
Cumulative currency translation adjustment | 4 | 51 | |
Net (assets)/liabilities disposed | (2) | (323) | (11) |
Cash - current year disposals | 243 | 468 | 7 |
Deferred proceeds | 2 | ||
Cash and cash equivalents disposed | (119) | (13) | (9) |
Fair value of financial asset acquired | 3 | ||
Costs and other disposal liabilities paid | (23) | (25) | (52) |
Costs | (16) | (17) | (16) |
Net cash inflow | 101 | 430 | (50) |
Gain on disposal | 230 | 128 | (20) |
Cash inflow/ from sale of subsidiaries | 83 | 19 | (54) |
Cash inflow from sale of joint ventures and associates | 18 | £ 411 | £ 4 |
Disposal of subsidiaries and associates [member] | WSE [member] | |||
Disclosure of disposal of subsidiaries [line items] | |||
Property, plant and equipment | (17) | ||
Intangible assets | (15) | ||
Intangible assets - pre-publication | (8) | ||
Inventories | (1) | ||
Trade and other receivables | (30) | ||
Cash and cash equivalents (excluding overdrafts) | (119) | ||
Net deferred income tax liabilities | 16 | ||
Trade and other liabilities | 171 | ||
Cumulative currency translation adjustment | 4 | ||
Net (assets)/liabilities disposed | 1 | ||
Cash - current year disposals | 212 | ||
Costs | (6) | ||
Gain on disposal | 207 | ||
Disposal of subsidiaries and associates [member] | UTEL [member] | |||
Disclosure of disposal of subsidiaries [line items] | |||
Investments in joint ventures and associates | (3) | ||
Net (assets)/liabilities disposed | (3) | ||
Cash - current year disposals | 22 | ||
Gain on disposal | 19 | ||
Disposal of subsidiaries and associates [member] | Business closures other [member] | |||
Disclosure of disposal of subsidiaries [line items] | |||
Intangible assets | (2) | ||
Trade and other liabilities | 1 | ||
Provisions for other liabilities and charges | 1 | ||
Cash - current year disposals | 9 | ||
Deferred proceeds | 2 | ||
Fair value of financial asset acquired | 3 | ||
Costs | (10) | ||
Gain on disposal | £ 4 |
Held for sale - Summary of Asse
Held for sale - Summary of Assets and Liabilities (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Non-current assets | |||
Property, plant and equipment | £ 237 | £ 281 | £ 343 |
Intangible assets | 3,009 | 2,964 | £ 3,442 |
Deferred income tax assets | 60 | 95 | |
Trade and other receivables | 100 | 103 | |
Total non-current assets | 4,529 | 4,603 | |
Current assets | |||
Intangible assets - pre-publication | 817 | 741 | |
Inventories | 164 | 148 | |
Trade and other receivables | 1,178 | 1,110 | |
Cash and cash equivalents (excluding overdrafts) | 568 | 518 | |
Non-current liabilities | |||
Deferred income tax liabilities | (136) | (164) | |
Non-current liabilities | (1,246) | (1,662) | |
Current liabilities | |||
Trade and other liabilities | (1,400) | (1,342) | |
Total liabilities | (3,380) | (3,867) | |
Net assets | 4,525 | 4,021 | |
Disposal groups classified as held for sale [member] | |||
Non-current assets | |||
Property, plant and equipment | 16 | ||
Intangible assets | 168 | 181 | |
Deferred income tax assets | 98 | 68 | |
Trade and other receivables | 25 | 27 | |
Total non-current assets | 291 | 292 | |
Current assets | |||
Intangible assets - pre-publication | 242 | 247 | |
Inventories | 55 | 46 | |
Trade and other receivables | 60 | 48 | |
Cash and cash equivalents (excluding overdrafts) | 127 | ||
Total current assets | 357 | 468 | |
Assets classified as held for sale | 648 | 760 | |
Non-current liabilities | |||
Deferred income tax liabilities | (2) | ||
Other liabilities | (371) | (284) | |
Non-current liabilities | (371) | (286) | |
Current liabilities | |||
Trade and other liabilities | (202) | (302) | |
Current liabilities | (202) | (302) | |
Total liabilities | (573) | (588) | |
Net assets | £ 75 | £ 172 |
Cash Generated from Operation_2
Cash Generated from Operations - Summary of Cash Generated from Operations (Detail) - GBP (£) £ in Millions | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Cash flows from (used in) operating activities [abstract] | ||||
Profit for the year | £ 590 | £ 408 | £ (2,335) | |
Adjustments for: | ||||
Income tax | (92) | 13 | (222) | |
Depreciation | 66 | 90 | 95 | |
Amortisation and impairment of acquired intangibles and goodwill | 99 | 138 | 2,733 | |
Amortisation of software | 88 | 85 | 84 | |
Net finance costs | 55 | 30 | 60 | |
Charges relating to GMP equalisation | 8 | |||
Share of results of joint ventures and associates | (44) | (78) | (97) | |
Profit on disposal of subsidiaries, associates, investments and fixed assets | (315) | (116) | 40 | |
Net foreign exchange adjustment from transactions | 28 | (26) | 43 | |
Share-based payment costs | 37 | 33 | 22 | |
Pre-publication | (37) | (35) | (19) | |
Inventories | (10) | 24 | 17 | |
Trade and other receivables | £ 170 | (15) | 133 | 156 |
Trade and other liabilities | £ 182 | 35 | 6 | 61 |
Retirement benefit obligations | (9) | (232) | (106) | |
Provisions for other liabilities and charges | 63 | (11) | (10) | |
Net cash generated from operations | £ 547 | £ 462 | £ 522 |
Cash Generated from Operation_3
Cash Generated from Operations - Summary of Proceeds from Sale of Property, Plant and Equipment (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, plant and equipment [abstract] | |||
Net book value of property plant and equipment disposed | £ 41 | £ 12 | £ 9 |
Profit/(loss) on sale of property, plant and equipment | 87 | £ (12) | (5) |
Proceeds from sale of property, plant and equipment | £ 128 | £ 4 |
Cash generated from operation_4
Cash generated from operations - Summary of Current and Non-current Borrowings (Detail) - GBP (£) £ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||
Beginning balance | £ 1,070 | £ 2,526 | £ 2,353 |
Financing cash flows | (442) | (1,299) | (251) |
Foreign exchange movements | 32 | (150) | 421 |
Fair value and other movements | 8 | (7) | 3 |
Ending balance | 668 | 1,070 | 2,526 |
Long-term borrowings [member] | |||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||
Beginning balance | 1,066 | 2,517 | 2,106 |
Financing cash flows | (441) | (1,292) | (3) |
Foreign exchange movements | 10 | (149) | 416 |
Fair value and other movements | 8 | (10) | (2) |
Ending balance | 643 | 1,066 | 2,517 |
Short-term borrowings [member] | |||
Disclosure of reconciliation of liabilities arising from financing activities [line items] | |||
Beginning balance | 4 | 9 | 247 |
Financing cash flows | (1) | (7) | (248) |
Foreign exchange movements | 22 | (1) | 5 |
Fair value and other movements | 3 | 5 | |
Ending balance | £ 25 | £ 4 | £ 9 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) £ in Millions | Dec. 31, 2018GBP (£) |
Disclosure of contingent liabilities [abstract] | |
Benefit from FCPE | £ 116 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - GBP (£) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments [abstract] | ||
Contractual capital commitments | £ 0 | |
Lease expenditure | £ 128,000,000 | £ 178,000,000 |
Commitments - Summary of Future
Commitments - Summary of Future Aggregate Minimum Lease Payments in Respect of Operating Leases (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | £ 1,175 | £ 1,201 |
In less than one year [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | 143 | 156 |
Later than one year and not later than two years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | 130 | 139 |
Later than two years and not later than three years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | 115 | 121 |
Later than three years and not later than four years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | 101 | 100 |
Later than four years and not later than five years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | 91 | 86 |
Later than five years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum lease payments in respect of operating leases | £ 595 | £ 599 |
Commitments - Summary of Futu_2
Commitments - Summary of Future Aggregate Minimum Sub-lease Payments Expected to Received under Non-cancellable Sub-leases (Detail) - GBP (£) £ in Millions | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | £ 334 | £ 336 |
In less than one year [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | 51 | 45 |
Later than one year and not later than two years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | 44 | 45 |
Later than two years and not later than three years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | 41 | 40 |
Later than three years and not later than four years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | 39 | 35 |
Later than four years and not later than five years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | 35 | 33 |
Later than five years [member] | ||
Disclosure of finance lease and operating lease by lessee [line items] | ||
Future aggregate minimum sub-lease payments expected to be received under non-cancellable sub-leases | £ 124 | £ 138 |
Related Party Transactions - Su
Related Party Transactions - Summary of Key Management Personnel Compensation (Detail) - GBP (£) £ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of transactions between related parties [abstract] | ||
Short-term employee benefits | £ 6 | £ 12 |
Retirement benefits | 1 | 1 |
Share-based payment costs | 7 | 2 |
Total | £ 14 | £ 15 |
Events after the Balance Shee_2
Events after the Balance Sheet Date - Additional Informations (Detail) € in Millions, £ in Millions, $ in Millions | Mar. 29, 2019USD ($) | Mar. 31, 2019USD ($) | Feb. 28, 2019GBP (£) | Dec. 31, 2018GBP (£) | Dec. 31, 2017GBP (£) | Dec. 31, 2016GBP (£) | Mar. 31, 2019EUR (€) | Dec. 31, 2018EUR (€) |
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Cash payment received from disposal of business | £ | £ 83 | £ 19 | £ (54) | |||||
Deferred income from vendor notes | £ | 387 | 322 | ||||||
Borrowings | £ | £ 720 | £ 1,085 | ||||||
1.875% notes due 2021 [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Tender offer amount | € | € 250 | |||||||
Disposal of major subsidiary [member] | US K12 Courseware [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Consideration received | $ | $ 250 | |||||||
Cash payment received from disposal of business | $ | 25 | |||||||
Disposal of major subsidiary [member] | Vendors note [member] | US K12 Courseware [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Deferred income from vendor notes | $ | $ 225 | |||||||
Repayment percentage entitled for equity holders in future cash flow | 20.00% | |||||||
Repayment percentage accounted as net proceeds in future cash flow | 20.00% | |||||||
Disposal of major subsidiary [member] | Buy-in policies [member] | UK Group plan [member] | Legal & general [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Insurance expense | £ | £ 500 | |||||||
Percentage of pensioner liabilities matched with policies | 95.00% | |||||||
Tender offer to repurchase notes [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Tender offer amount | € | € 55 | |||||||
Tender offer to repurchase notes [member] | 1.875% notes due 2021 [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Tender offer amount | € | € 500 | |||||||
Tender offer to repurchase notes [member] | Revolving credit facilities [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Borrowings | $ | $ 1,190 | |||||||
Borrowing maturity | February 2024 | |||||||
Bottom of range [member] | Disposal of major subsidiary [member] | Vendors note [member] | US K12 Courseware [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Expected repayment period | 3 years | |||||||
Top of range [member] | Disposal of major subsidiary [member] | Vendors note [member] | US K12 Courseware [member] | ||||||||
Disclosure of non-adjusting events after reporting period [line items] | ||||||||
Expected repayment period | 7 years |