管理層發言
Good morning, everyone, and welcome to Pearson's 2026 Interim Results. Today, we will host a presentation followed by a Q&A session. Operator provided instructions to callers. And with that, I'll hand over to Omar.
Thank you, Alex. Good morning. It's a pleasure to be with you again today. I've really been looking forward to it. I'm pleased to be joined by Simon Robson, our great new CFO. Simon will run you through our financial results for the first half, alongside his initial reflections following early engagement with the Pearson teams and many of you in the investment community as well. And as usual, we'll be joined by our colleagues Art, Tom, Vishaal and Sharon for Q&A. Let me start with the key takeaways from today's presentation. First, we have delivered a good H1 financial result with revenue up 4%, profit up 14% and EPS up 19%, alongside continued strong cash flow. Second, we are on track to deliver our guidance for the year. And third, we continue to be excited about the future for Pearson. Our relationship with a leading AI lab reinforces our conviction that advances in technology are driving major demand for the validation of new skills with Pearson uniquely placed to benefit. Before we go into the results, let me begin with reminding you of Pearson's unique characteristics and enduring strengths that drive resilient profit and cash flow and that helped deliver our encouraging financial results in H1. Ninety percent of our profit comes from Assessments & Qualifications, virtual schools and print. These businesses are driven by human-led services where complex, interconnected physical and digital workflows enable large-scale delivery, often within highly regulated markets. Our services act as verification infrastructure for skills globally, spanning companies, industry associations, states and government agencies. The remaining 10% of Pearson's profit comes from digital courseware, predominantly in U.S. Higher Ed where we are deeply embedded in critical workflows of decision-makers, delivering solutions that enable educators to deliver courses end-to-end. These characteristics, alongside our competitive strengths underpinned by trust, deliver a clear value proposition for our customers, powering our financial performance. Let me come next to our guidance for this year. As we have showed you several times before, this is the framework by which we operate. Execution against this framework is already translating into delivery. We grew revenue by 4% in H1 and remain on track for our full year guidance. Our confidence in driving consistent mid-digit top line growth and margin expansion over the medium term is underpinned by continued execution against this framework. This includes core business improvements, unlocking execution synergies and driving our medium-term growth vectors. Let me pick out a few highlights across each of those areas. Firstly, we continue to drive performance across our core businesses. In Assessments & Qualifications, we are delivering continued enterprise growth with our Google Cloud certification program launching in H1 and securing a new contract with a leading AI lab, which I'll talk more about shortly. Our Clinical business delivered strong growth benefiting from international demand and digital expansion. In U.K. and International Qualifications, we delivered the first large-scale testing cycle for U.K. primary schools, marking approximately 2 million papers. As some of you may have seen, technical issues with the new platform led to a short delay in the delivery of results. We apologize for the disruption and moved quickly to support schools and strengthen delivery for future cycles. Moving to Virtual Learning. This business unit is clearly having a standout year, underpinned by a positive market environment, recent share gains, investment and ongoing strong execution. We were successful in all 10 long-term contract renewals this year and are on track to open 5 new schools for the upcoming academic year. We continue to feel confident about the sustainability of strong growth for this business into the medium term. In Higher Education, inclusive access continues to be a key priority, and we're seeing improved performance here, reflecting go-to-market changes implemented in H1, including revised incentives and better market intelligence for our sales teams. Inclusive access growth accelerated to 23% in Q2 and now represents 50% of our U.S. core courseware business. In Enterprise Learning & Skills, Enterprise solutions continue to be a key driver of growth through powering enterprise AI up-skilling at scale, including delivering a suite of AI learning programs to our strategic partners. For example, we delivered a strategic AI fluency program for Cognizant's global sales and consulting teams, enabling them to become more effective individually, while also supporting high stakes technical sales conversations. In vocational qualifications, we continue to execute strongly, including in international markets, where we extended our contract with the Jordanian Ministry of Education and successfully launched a vocational skilling program for construction in Saudi Arabia. Lastly, in English Language Learning, Institutional performed well with continued enterprise growth, although the backdrop for international mobility has become more difficult since we last spoke, with softer study abroad trends, continued tight migration policies and geopolitical disruption weighing on demand. With this backdrop, I'm pleased that our teams are outperforming the market and executing well, showing clear operational resilience. Although we expect market headwinds to persist in the near term, we do remain confident in the long-term attractiveness of this business given demographic factors. Now let me touch upon progress in unlocking value through our execution synergies. We continue to identify areas of opportunity to break down silos, fix fragmented approaches and drive operational effectiveness. First, let me pick out a few examples across the implementation of Pearson-wide operational systems. Our work to date on content development processes has identified nearly 150 distinct content tools and over 140 different approaches to describe, tag and structure content assets across Pearson. We're systematically working through to standardize our approach here, moving towards Pearson-wide workflows supported by agentic technologies. We continue to make AI-enabled process improvements. For example, in customer services, AI self-service is now handling 40% of customer interactions across voice, chat and e-mail in our initial rollout phases. Our new revenue operations team is driving a more consistent, disciplined approach to forecasting and sales incentives. We're consolidating more than 130 individual sales incentive plans across Pearson into about 30 streamlined, role-based plans aligned to a common set of principles. Second, we're continuing to drive product innovation and leverage benefits from our modern software approach, combining new technologies alongside our data, quality IP and core assessment capabilities. We have launched new products in ambient assessment like Communication Coach and have been pleased with early feedback from customers. We're also expanding our Clinical business with AI-enabled functionality that enhances our platform offering, supporting our continued digital strength. And we're leveraging our data and applying our learning science to drive improved learner outcomes. For example, at Higher Ed, our latest research shows that by using our AI adaptive products, students were 90% more likely to reach initial mastery in the topic versus legacy education tools. And lastly, we're leveraging our strategic partners to unlock value and improve operational effectiveness. Our latest strategic partnership announcement is with Adobe, who are supporting our efforts to rebuild and upgrade our digital estate, enabling easier selling and purchasing. To shine a light on where we are today, we manage 4,500 web domains, of which over 300 are product-focused. We're simplifying this web estate and redesigning it to fit core customer personas and journeys. In parallel, we're upgrading our e-commerce capabilities to improve performance, ensuring our customer platforms are ready for LLM discoverability and agent-driven experiences. As you can hear, there are a lot of activities ongoing across the group to drive execution synergies. We're investing in these changes because we are very confident that they will continue to deliver cost efficiencies, underpinning our 40 basis point medium-term guide as well as increasing our operational agility and supporting an improved and more consistent top line performance. Finally, I want to share an update on our progress with our medium-term growth vectors. Firstly, with enterprise skilling. The first half results demonstrate growing momentum across our key enterprise offerings. Pearson Professional Assessments grew well. Enterprise Solutions delivered strong double-digit growth, and we're seeing continued enterprise opportunities for our English offerings. We are delivering continued success in strategic account growth, increasing our network to 10 during the first half. These new long-term relationships secure incremental joint go-to-market and the monetization opportunities for Pearson. I now want to spend a few moments on AI skills verification. We've spoken before about the widening gap between the pace of AI innovation, people's ability to use it effectively and the returns enterprises are seeking from AI. Our agreement with a leading AI lab to deliver their global certification program reinforces our leadership in skills verification and our conviction that AI adoption increases demand for trusted, validated new skills. I'm particularly proud of how quickly our team moved from initial discussion to global launch across our Pearson Professional Assessment network in just a matter of months. This speed reflects both the pace the technology industry expects and Pearson's agility in delivering at global scale. Overall, this agreement is a clear signal of the demand we expect to see as organizations scale AI adoption and Pearson is uniquely positioned to help meet that need. In Early Careers, we continue to make progress in unlocking this large adjacent market opportunity. The eDynamic Learning integration is progressing well. We're pleased with performance and we continue to expect this deal to be supportive of our medium-term guidance. We've also successfully brought together our sales teams and capabilities across our early career assets that we first signaled at prelims, including eDynamic Learning, Certiport and career and technical education, meaning Pearson now offers a complete explore, learn, practice and certification continuum. This revised go-to-market approach is unlocking near-term cross-sell revenue synergies and initial school district customer feedback has been encouraging, meaning we feel confident in our value proposition and our ability to address this large market opportunity. Now let me hand over to Simon for a deeper look at our first half financials.
Thanks, Omar. Great to be with you all and good morning. Before I add on to the first half results and full year outlook, let me take a couple of minutes to reflect on my first three months in this role. I've been spending most of the time engaging with Omar and the executive team, going deep on the business and our offerings and connecting with colleagues from across Pearson. I've also met and listened to many of you across the investor and analyst community, which has been an important investment of my time. Everything I've seen so far has reinforced my conviction that Pearson combines leading positions in attractive markets, structural growth opportunities and resilient cash generation. The speed that Omar and the leadership team are moving at to unlock these opportunities is impressive. My role is to work closely with Omar to continue this momentum, deliver sustained growth and consequently drive shareholder value. Three areas I've identified to be my early priorities are continued disciplined investments, operational excellence and simplification and transparency. So just quickly on each of those. Driving sustainable growth requires thoughtful and disciplined investment, making choices about where to back growth, where to improve returns, where to reallocate internally as markets and technology evolve. Our capital allocation priorities have served us well and will remain unchanged. My focus will be on improving our processes, reinforcing our investment discipline and ensuring our approach facilitates the optimal return for Pearson as a group. With regard to operational excellence, I see opportunity to get Pearson working more effectively across the business units. And this matters because the growth opportunities in front of us will require us to move quickly, share capabilities and put the end customer at the center of our efforts. I will take a fresh look at resource allocation and how we develop the capabilities to be more agile, whilst keeping decision making close to the business. And lastly, on simplification and transparency. I've heard from many of you that Pearson can still feel complex when looked at from the outside. There is an opportunity to make the business easier to understand, including by continuing to improve how we explain our growth drivers, our investment choices and the link between operating progress and financial outcomes. Now on to our financial performance. We have delivered a good financial performance in the first half. Group revenue is up 4% on an underlying basis, in line with our expectations. Group adjusted operating profit is up 14% underlying to GBP 226 million, with 140 basis points of margin expansion to 15.5%. Profit performance is driven by operating leverage and cost efficiencies, partially offset by investment and inflation. In addition, profit benefited from the one-off impairment of legacy product development assets announced at the full year, alongside investment phasing. Adjusted earnings per share increased 19% at constant exchange rates and 18% on a headline basis to 28.9p, reflecting the increase in adjusted operating profit and a reduction in share count due to the share buyback, partially offset by increased interest costs. Our balance sheet remains robust, driven by another strong cash performance, enabling further investment in the business and increased shareholder returns, including our accelerated GBP 350 million share buyback. Reflecting our performance and confidence in the outlook, we are proposing a 5% increase in our interim dividend to 8.2p. Walking through the key elements of business unit performance. Assessment & Qualifications returned to growth in Q2, as expected, with H1 revenue increasing 2%. This was driven by strong performance in Clinical Assessment, growth in U.K. and International Qualifications and Pearson Professional Assessments, partially offset by a decline in U.S. student assessment, which was impacted by the previously disclosed loss of the New Jersey contract. Margin declined 20 basis points as trading performance was more than offset by sales mix and delivery costs. Virtual Learning grew 19%, reflecting strong enrollment momentum in the 2025-2026 academic year, with enrollment growth accelerating to 15% in the spring semester alongside funding and favorable mix. Margin increased to 18%, driven by strong revenue growth and operating leverage. Higher Education revenue grew 2% driven by continued solid performance in our core U.S. courseware business and the return to growth in the K-12 channel. This was partially offset by a decline in International, reflecting challenging trading conditions in mature markets, although the business is stabilizing as our turnaround plan progresses. Margin increased to 6% due to operational leverage, continued cost efficiencies and the lower amortization costs following the 2025 product development impairment. English Language Learning revenue declined 3%, with growth in institutional more than offset by declines in Pearson Test of English. Margin improved slightly with cost efficiencies offsetting trading performance. And Enterprise Learning & Skills revenue grew 7% with another solid performance from vocational qualifications and continued strong growth in Enterprise Solutions, supported by the monetization of our strategic partnerships. Margin increased to 28% with operational leverage from revenue growth, partially offset by investment in the business. Free cash flow was again strong, up GBP 103 million from last year to GBP 259 million. Operating cash performance was driven by disciplined working capital management and benefited from payables timing and one-off proceeds from the settlement of a U.S. insurance policy. Cash interest and tax payments returned to more normalized trends following the GBP 114 million one-off benefit received last year due to the state aid refund. Our balance sheet remains robust, enabling further investment in the business and increased shareholder returns. Net debt increased by GBP 0.3 billion to GBP 1.3 billion at June 2026, reflecting strong free cash flow generation more than offset by share buybacks, acquisition spend and dividends. So turning now to the outlook for the remainder of the year. We are where we expected to be at the half year point, and we are on track to deliver on the guidance we set out at prelims in February. Specifically, group underlying revenue growth of mid-single digit, group adjusted operating profit within the range of GBP 640 million to GBP 685 million at FX rates as at the end of last year, and we expect free cash conversion of 90% to 100%. We continue to expect growth to improve in H2 supported by new business products and pricing in A&Q and continued progress in inclusive access pricing and the K-12 channel in Higher Education. Virtual Learning had a standout H1 and demonstrates continued momentum, and we expect this business to grow well in H2 despite the tough comparable, supported by strong market trends. We expect group growth to be weighted to Q3 given the shape of last year and known business unit dynamics. Turning now to business unit expectations for the full year. We have updated guidance for English Language Learning, where growth this year is less certain given first half trading and market conditions. However, there is clear resilience in the Pearson portfolio as evidenced by our first half results, and we remain confident in delivering our guidance for 2026. Let me step through business unit considerations as a reminder. Assessment & Qualifications to grow low to mid-single digit in 2026, driven by new contracts, products and pricing. Virtual Learning to deliver stronger growth than 2025, driven by a full year enrollment growth. Higher Education to grow more than 2025, supported by continued product and platform innovation, pricing and inclusive access in our core U.S. courseware business with improvement in the K-12 channel. English Language Learning performance to be driven by market share gains and pricing in institutional, with Pearson Test of English expected to decline given the challenging market backdrop. Enterprise Learning & Skills growth to be driven by a solid performance in vocational qualifications and strategic account growth in Enterprise Solutions. So let me repeat my key takeaway. My first three months have reinforced my confidence in Pearson's position and prospects. We have strong foundations, resilient cash generation and clear opportunities to drive sustained growth and shareholder value. I'm excited for the road ahead and look forward to keeping you all updated. And with that, I'll hand back to Omar.
Thank you, Simon. So as you've heard, we've delivered a good H1 financial result. We are on track to deliver our guidance for the year, and we continue to be excited about the future for Pearson. And with that, Simon and I along with Art, Tom, Vishaal and Sharon, we'll be happy to take your questions. Operator, over to you.
分析師問答
Operator provided instructions to callers. Our first question comes from the line of Ciaran Donnelly from Citi.
A couple of questions from me. Firstly, just in terms of the divisional guidance for the full year, obviously, the only material change is on ELL. And I just wanted to ask incrementally, is there any of the other divisions that you're positive on? Because clearly, ELL is a slight negative, you've reiterated the guide for the full year. So it'd just be good to get any kind of insight into any incremental positivity on any of the other divisions vis-a-vis this time at the start of the year. And number two, just on A&Q margin, could you just talk us through the recoverability in H2? And just help us think about maybe full year margins versus last year?
So let me sort of make a couple of little comments here. You mentioned ELL. The institutional part of ELL is performing really well. So we feel very good about that. But you're right, we're sending a little message saying that the migration market still remains a tough backdrop. It's still declining relative to last year, but at a slower rate, just to be very clear. So last year, it was down 15% in 2025. This year, it's declining but at a much slower rate than that. But we just want people to know that it's still a bit of a tough backdrop for that market. As you saw in H1, I'm really delighted with how ELS performed both in vocational qualifications and in Enterprise Solutions. Enterprise Solutions now has had several quarters of really excellent strong growth. We feel very good about that looking forward as well. So that's a good one. Simon mentioned with Virtual Schools, despite the tough comp for H2, Virtual Schools are going to grow faster than it grew last year. So we feel very good about how that business is performing. And again, as you've heard, Higher Ed is also on a stronger track than last year. Last year, Higher Ed had some switch over in the sales team for the core K-12 assets. That business is back in growth now. So we feel good about Higher Ed overall for this year as well. So that's just some thoughts there for you. On the A&Q margin, I'm going to bring Simon in to just comment on how we're thinking about that.
Hi, Ciaran, thanks for the question. I want to note, Ciaran, you are the first asker of a question to me as CFO of Pearson, so thank you for the special moment. So on A&Q margin, a few things to understand that happened in Q1. So I called out sales mix, and I should have called out when I mentioned delivery costs: one-off delivery costs. So a couple of things that weighed down the margin in H1. On the sales mix, we obviously ended the New Jersey contract. That was a very mature contract. The shape of all of our contracts tends to be that they are lower margin at the start and then they mature and we increase the margin over time. So the New Jersey one exited at a good margin rate, and we started the U.K. SATs contract, which, given it was the first year of the U.K. SATs contract, then at a lower margin. So that weighed down on margin, but that will normalize out over time. And then the one-off delivery costs that I mentioned were in relation to the SATs contract. And obviously, we don't expect those to be here this time next year. So that's what's weighing down and gives us growth in the margin going into H2 and obviously contributes to my confidence in the full year guidance for the GBP 640 million to GBP 685 million overall group profit.
Our next question comes from James Tate from Goldman Sachs.
James Tate from Goldman. I've got three questions, please. Firstly, on the new certification contract with an AI lab. Could you just provide a bit more detail on this contract? In particular, could you help us understand how to think about the scale of the contract in terms of volumes and revenues as well as the timing? Will this contract roll out later this year? Secondly, on A&Q growth, growth accelerated to around 5% in Q2, I think, benefited from a number of new contract launches. Could you help us unpack some of the moving pieces in H2? Is this 5% level of growth sustainable, particularly as you lap the New Jersey contract loss? And thirdly, on capital allocation and the share buyback program completed in May and given leverage remains below the 2x maximum you set out. Could you explain the rationale to not expand the buyback? Does that mean you're looking more actively at M&A?
Thank you very much, James. Good to hear you. I'm going to take the first question, and then I'll go to Art for the next one, and then I'll ask Simon to comment on capital allocation. So as you know, James, Pearson is already very strongly established in the technology vertical as a learning content provider and assessment provider of credentialing and digital badging. And so—as I've been saying for a while—AI is a tailwind for reskilling because companies all around the world know that AI is going to reconfigure the nature of jobs and work over the next 10 years, and they want to bring their workforce with them. They want to help figure out how to equip workers to do really well, no matter what their task and roles are with AI. And so that's essentially what the ask is. For me, the AI lab signing us up is great news because this is one of the world's leading companies that's seen unbelievably explosive growth, and they're saying that the demand they're seeing for people wanting to be skilled and qualified in their assets and tools is very high. They've come to us as Pearson as one of the world's unique providers with a large global network that can scale that delivery across the globe. The work that we're doing with them is essentially assessments and certifications. Historically, it would have been 18 to 24 months from start to finish to launch a program. This one is in a handful of single-digit months that we've gone from start to launch. It is launched. The first tens of thousands of people have come through the doors. But of course, their ambition is much, much higher than that. So it's early days. I don't want to overstate it. But of course, we're excited about that because when some of the world's best companies come to you and say, we want to use your assets and your capability to help verify people and assess people and qualify them in our new technologies, that's a good thing. I'm very happy with what Vishaal and the team have done in the Enterprise business building out those relationships. And yes, we expect that to continue to be a strong focus area for us going forward for a long while to come. On the second question on A&Q and what the dynamics are in terms of growth, we told you that at the end of H1 that we expected to see growth in Q2, that happened. And now you're asking about what happens next. So Art, over to you, please.
Thanks, Omar, and good to have you with us today, James. We're very happy that we did deliver that return to growth in Q2 and also happy to reaffirm our guidance for the year of low to mid-single. Let me talk a little bit about the drivers of that. First off, in our Professional Assessment business, we're going to see the full year impact of contracts that launched in the second half of last year, and I'll draw particular attention to Salesforce and ServiceNow. In 2026, we've launched a Google Cloud contract and then the one that you were asking about just a moment ago with the AI lab. I'm happy to report as we are sitting here speaking right now, there are test takers around the world sitting that exam. We also will show this year the revenue from the first year of the delivery of the SATs contract. And again, the clinical portfolio just continues to perform extremely well. We're injecting AI capabilities into a number of those products throughout the year and expect to see the financial pull-through on that. And then lastly, in the second half of the year, the comp effect of PDRI year-over-year diminishes. So those are the factors that have us feeling very, very good about the A&Q outlook for H2.
Thank you, Art. And then Simon, on capital allocation, please.
James, nothing to second-guess, I'm afraid. On capital allocation, as you can imagine, I've spent a lot of time looking at that since I arrived here. I mentioned in my remarks earlier that our approach to capital allocation remains unchanged. We assess it regularly. Our priorities are very clear, and I absolutely do not want an inefficient balance sheet. So let me just touch on the GBP 350 million share buyback that we've done for 2026. We announced that earlier in the year and then actually Omar and Sally responded well to the conditions in the market and the weakness in the price and they started earlier and accelerated that and I think that proved a really good return for shareholders. But as I say, my capital allocation priorities are invest in the business, always looking at where we can invest and drive great returns. Looking at M&A opportunities, again, we'll be very, very disciplined about how we do that. Omar's laid out the criteria before I won't go through those again, but we'll always be scouring and looking for good opportunities to invest and grow the business. We announced today a 5% increase in the dividend and then we'll also distribute any excess capital. But for now, our capital allocation policy is unchanged.
Thanks, Simon. I mean, James, if I could just sort of emphasize what Simon is saying. I think over the last few years, we've demonstrated that we're always going to think about shareholders' interest in protecting them and making sure we run an efficient balance sheet. So you can expect us to continue to do that going forward. Next question, please.
Our next question comes from Nick Dempsey from Barclays.
Got two, please. First of all, we noticed that ETS bought the ACT qualification recently. I believe that ACT runs on Pearson's platforms and ETS has a lot of experience of being a key service provider to tests like this. So can you tell us, first of all, whether the ACT business is a relevant part of your U.S. Student Assessment subdivision? And whether you have a contract that means you keep that business until a particular date? Second question, just maybe update us on your latest thinking on college enrollments for fall 2026. And third question, Simon flagged that the group organic revenue growth is expected to be weighted to Q3. Can you just remind us what the dynamics are that means that weighting will occur?
Sure. I am going to bring in Art for the first question and then Tom on the second question, and then probably I'll make a comment about the third one. But just one little intro. You asked was ACT an important customer for us? Every customer is important for us. That is the mindset we want to have across the business at all times. But anyway, it's a great question. So Art, over to you regarding ETS's acquisition of ACT.
Absolutely. Nick, good to have you with us today. Yes, you are right. We are a provider via our U.S. school assessment business of exam paper preparation and delivery services for ACT. We've had that relationship for years and that relationship continues through this year, and we expect it to continue beyond that. It's early days post the acquisition, and we're in discussions with ACT management, but we will continue to be providing those services to ACT, and that is reflected in the guidance that we're sharing today.
Thank you, Art. And then, Tom, any thoughts on college enrollments for 2026? This is a long-term favorite with our sell-side friends. Over to you, Tom.
Nick, great to hear you again. From a college enrollment perspective, we're seeing slight enrollment headwinds, which is exactly what we said we would expect to see at prelims. That said, we still feel very confident in a strong H2 performance. As Omar mentioned, inclusive access has been an increasing area of focus for us. We've also seen significant improvements in the K-12 market and what we're doing there with the sales team. And then lastly, from an international perspective in higher education, we're very much focused on executing the turnaround there and delivering a strong H2 in that space as well. So overall, a slight decline in enrollments. I don't think there's any particular surprise there, but we're very much focused on growing the business despite that.
Thank you, Tom. And then, Nick, on the last question, I don't think there's anything new here for you. So you know that Pearson has always some level of seasonality baked into how the business units perform depending on their customer base. Traditionally, the main back-to-school period for Higher Ed in the U.S., but also parts of national tend to be Q3. That's the little peaky thing that you see there. Q4 has always been a bit of a bigger one, for example, for English courseware and English institutional. But on balance, the back weighting in the year is much less this year than we've seen in past years, and we feel good about that as we drive our strategy.
Nick, there's also the Q4 last year, Q4 2025 was very strong. So I think I mentioned that, that obviously means growth in this Q4 will be less. The comp.
Our next question comes from David Nolan from Morgan Stanley.
The first one for me is on the medium-term margin potential. If we look across the divisions, there appear to be significant tailwinds, especially within Higher Ed, but the medium-term guidance is only for around 40 basis points of annual margin expansion. Could you help us reconcile the two and explain how you think about the trade-off between growth and margin more broadly? And then my second question is on the Virtual Learning momentum. The announcement of the 5 new school openings is a significant positive. But it would be great to get more color on same-school momentum and whether you continue to take market share in the space. And also any color on how the career learning offering is improving your overall competitive advantage in the space as well?
Sorry, Dave, I just want to make sure I heard that correctly. So the second question you're asking is about virtual school momentum with the new schools and market share. And the third one was career learning, you mean the early career stuff, is that what you're asking about? Okay, career pathways with virtual schools. So question two and three, I'll come to Tom. Let me take the first one directly. What we've been trying to say for a little while is Pearson, historically, ran itself a little like a holding company with many separate units. The separate units were more fragmented. What we've said is we're going to run the company more as a unified operating company. We simply don't need to run it so fragmented. As you defragment, you create productivity and performance opportunities. And it happens at every level. If you look at go-to-market, product, technology infrastructure and vendors, there's an opportunity to do things more effectively and efficiently, and that's what we're doing. So the journey we're on is constantly improving our margin performance. The reason we're confident about the 40 basis points is: last year, when we dropped 30 basis points to the bottom line in 2025, the investment capacity we created was about 200 basis points because we wanted to reinvest in the business for future growth. That is the formula you should expect us to continue to drive. We will constantly work to improve our fitness. Even when we're fit, we'll go back to the gym and work out some more. We'll expand the investment capacity and will drop at least 40 basis points on average over the medium term, and that's the promise from us to the market. I hope that makes sense. I'm going to go to Tom now on virtual learning.
A great question. We feel very pleased with our first half performance. The overall market for virtual learning continues to be really strong. We don't see any signs of that abating. That's fundamentally driven by the U.S. school choice movement and parents taking a more active role in education decisions. The market is growing high single digits on an enrollment basis in '25-'26, and we see that we're doing better from a share perspective. We're doing that by being forensic in our marketing funnel and disciplined in improving funnel conversion and operational performance. That will continue to be an important driver for us against that market backdrop. That applies both to the same schools and the new schools. We're excited about the new schools over the medium term as some are in states where demand has been constrained in the past few years. In terms of the career offering, think of it twofold. Parents and kids are increasingly thinking about career options earlier, as low as eighth grade. High school, higher education and work are blurring. This gives kids opportunities to do things like micro internships with IBM. We have an opportunity to engage students earlier in their career choices, which helps drive retention because students are thinking about what they want to do next. The things we're doing with career education are helping them think about what to do, and we're excited about what we're doing. We think it's a great part of the value proposition to parents and students and are pleased with the performance of the business.
Thank you, Tom. Any other questions?
We currently have no further questions online. So I'd like to hand back to the room.
Charlie, thank you for your question. I'm afraid I think they've already been answered. So we have no further questions from the platform.
Okay. Well, all of you who are with us today, thank you so much for your interest. We really appreciate it. We know you could be doing something else. We appreciate your interest in Pearson. We hope you enjoyed the session today, and we look forward to seeing you soon. Take care, everyone.