Interim Results - Part 1

Pearson PLC
31 July 2000


Part 1                               
                               
            PEARSON PLC INTERIM RESULTS (unaudited)
                 Six months ended 30 June 2000

Financial Headlines

    Sales up 18% to £1,545m

    Operating profits* up 32% to £148m

    Adjusted earnings per share up 41% to 10p

    Interim dividend per share up 7% to 9.2p

* Continuing operations before goodwill, exceptional items and
Internet enterprises

Business Headlines

In a separate announcement, Pearson is announcing today a $2.5 billion tender
offer for National Computer Systems (NCS), America's leading commercial
testing and educational services company.  The offer is recommended by the NCS
board. NCS will combine with Pearson Education to create a world leading 
integrated education company.  The acquisition is to be funded by a 3 for 11
rights issue at £10 per ordinary share.

Pearson Education, with new print and online programmes performing very
strongly both in the United States and in international markets, increased
underlying sales by 10% and reduced seasonal first half losses by 27%. The
Learning Network, incorporating the recently acquired Family Education Network
and building on its strategic alliance with America Online, is on track to
launch in September.

The Financial Times group, with its business titles generating strong
advertising and circulation growth, increased underlying sales by 24% and
operating profits (pre Internet enterprises) by 29%.  Accelerated investment
in the FT group's Internet enterprises is driving strong traffic and revenue
growth, putting these enterprises on track to break even in 2002, some two
years ahead of expectations.

The Penguin Group, publishing a record number of new best-selling titles and
moving its authors on to the Internet, increased underlying sales by 9% and
operating profits by 16%, before taking account of the acquisition of Dorling
Kindersley, completed in mid May. The group is integrating Dorling Kindersley
rapidly, aiming for significant margin improvements and creating new
publishing opportunities across all media.

Pearson Television's merger with CLT-Ufa was completed last week, creating
Europe's largest integrated broadcasting and content company. The company, in
which Pearson will have a 22% stake, was last week listed on the London Stock
Exchange and is currently valued at some £16 billion.


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                    Marjorie Scardino, chief executive
                     John Makinson, finance director
                    John Fallon, communications director
                                
Marjorie Scardino, chief executive of Pearson, said: 'These results
demonstrate both consistency and growth.  We are achieving strong organic
growth in revenues and profits across all our businesses.  At the same time
we're accelerating investment in new businesses so that they can more quickly
become an integral, and profitable, part of a stronger Pearson.

'Today's proposed acquisition of National Computer Services marks another big
strategic step for us.  The combination of NCS and Pearson Education, enriched
by the assets and capabilities of our other media businesses, puts us at the
heart of the knowledge and service economy that is changing our world.'

BUSINESS REVIEW

In the first six months of 2000, total sales increased by 18% to £1,545
million.  Underlying sales growth (excluding portfolio changes and exchange
rate movements) was 12%. Operating profits from continuing operations, before
goodwill, exceptional items and the net costs of developing Pearson's Internet
enterprises, increased by 32% to £148 million.  On an underlying basis,
operating profits increased by 33%. Adjusted earnings per share (pre Internet
enterprises)increased by 41% to 10.0p.  Pre tax profits of £123m (compared to
a loss of £20m in the first six months of 1999) reflect the completion of the
sale, early in the year, of Pearson's stakes in the Lazards investment houses.
 In addition to making online developments an integral part of all our
businesses, we are stepping up investment in developing Internet enterprises,
which capitalise on the power of our brands and content and generate new and
distinct revenue streams. In the first half of the year, the net cost of
developing these enterprises was £84m.

Pearson Education

£m                      2000        1999          %       1999
                   half year   half year     change  full year
Sales                                                         
US School                222         187        19%        575
Higher Education &       215         178        21%        666
Professional
International            197         169        17%        446
Discontinued               2          12          -         19
Pearson Education        636         546        16%      1,706
FT Knowledge              11           8        38%         19
                         647         554        17%      1,725
Operating                                                     
(loss)/profit
Pearson Education       (21)        (35)        40%        265
FT Knowledge             (5)         (3)          -        (8)
                        (26)        (38)        32%        257
Internet                (19)           -          -        (3)
enterprises

Our US School business has made a very strong start to the year, with
underlying sales increasing by 15%. Our new reading programmes, in English and
Spanish, gained substantial market share in both state adoptions and open
territories. New science and literature programmes are also performing well,
and our best selling math programmes continue to win new business and generate
strong backlist sales. Both Computer Curriculum Corporation and Pearson
Electronic Education, capitalising on growing investment in educational and
online software, are scoring major sales across the United States.

Our Higher Education & Professional business is on track for another good
year, posting first half-underlying revenue growth of some 6%. Buoyed by a
successful spring sales campaign, our US college publishing operation is
extending its market leadership with the launch of its own online course
management system. The system supports some 250 online courses and combines
easy to use technology with Pearson Education content. Our professional and
technology publishing business is also performing well, with its titles
consistently leading the Information Technology (IT) best-seller lists and
helping to drive traffic to Informit, our Information Technology portal.

With the AWL and Simon & Schuster publishing programmes and distribution and
marketing networks now fully integrated, our International business is in very
good shape to capitalise on stronger growth in Latin American and Asian
markets. In Latin America, our expanded programme of higher education and
professional titles is performing particularly well while, in Asia, growth is
being driven by the strength of our school and IT publishing. In the rapidly
growing business publishing market, we are seeing the first benefits of an
alliance between Pearson Education and the Financial Times group. Worldwide,
our market leading English Language Teaching enterprise continues to expand
rapidly. At constant exchange rates, the International business increased
first half revenues by some 13%.

The integration of the Simon & Schuster and Addison Wesley Longman businesses
is substantially completed, and will deliver, as expected, some $130m in
annual cost savings by the end of the year.

FT Knowledge, our business and management education division,made losses of
some £5m as it invested, in partnerships with a number of the world's leading
business schools, in bringing to market interactive, online learning
programmes aimed at the international business community.  The acquisition of
The Forum Corporation, one of America's top corporate training companies,
announced earlier this month, enables it to create an innovative corporate
training and e-Learning company.

Development of the Learning Network, which aims to build on Pearson
Education's strengths in curricular content to create the Internet's premier
education source, has progressed rapidly and the network will be launched in
September.  We have formed a strategic alliance with America Online, the
world's leading interactive services company, which positions the network as a
premier supplier of educational content and online learning tools.  We have
recently acquired Family Education Network, the leading online K-12 network
for parents, teachers and students, which will form an integral part of the
Learning Network. Its development has also been accelerated by the
announcement of a number of additional strategic investments and alliances in
online education businesses including Classroom Connect, Score! Learning,
Edgate.com and Blackboard.

The Financial Times Group

£m                      2000        1999          %       1999
                   half year   half year     change  full year
Sales                    392         328        20%        680
Internet                  16           2                     7
enterprises
Operating                                                     
profit/(loss)
FT Newspaper              50          34        47%         56
FT Interactive            26          15        73%         31
Data
FT Business                3         (1)          -          1
Les Echos                 16          13        23%         18
FT Businesses sold         -         (1)          -        (2)
Recoletos                 19          18         6%         34
FT Joint Ventures        (9)           -          -          -
Associates                 4           8      (50%)         12
                         109          86        27%        150
Internet                                                      
enterprises
FT                      (60)         (7)          -       (36)
Associates               (4)           -          -           

Our business newspapers continue to deliver very strong circulation and
advertising growth. In June, average daily worldwide sales of the Financial
Times newspaper increased to 462,000, an increase of 17%. For the first six
months of the year, advertising revenues increased by 40%.  In France, Les
Echos increased average daily circulation by 6% to 157,000, while, in Spain,
average daily sales of Expansion grew 7% to 67,100.  At Les Echos, advertising
revenues grew by 20% and they increased by 30% at Expansion. Average daily
sales of Financial Times Deutschland, the German language business newspaper
launched earlier this year in a joint venture with Gruner + Jahr, are running
at 50,000, well ahead of our first year target. It is also beating its initial
advertising target.

Our integrated network of finance and business websites and our online
services are also generating strong traffic and revenue growth. Our business
portals, which build on our newspapers and are targeted at international
business executives, are developing rapidly. FT.com, benefiting from its
launch as a business portal and a major marketing push, now attracts some 1.2
million unique monthly users and around 30 million monthly page views, a 45%
increase since January this year.  Pages consumed per user per day - a key
measure of a site's 'stickiness' - have increased from 5 to 8 since its
transformation into a business portal, reflecting the rich content of the
site.  Lesechos.fr and expansiondirecto.com are also sustaining strong traffic
growth and building their market leading positions in France and Spain, while
FT.de has quickly established itself as one of Germany's leading business and
financial websites. Building on the strength of the Financial Times brand, we
have launched a number of new online services targeted at individual investors
and savers.  FTYourMoney.com and mesfinances.fr are quickly establishing
themselves as leading personal finance websites in the UK and French markets.
Financial Times MarketWatch.com, our joint venture with MarketWatch.com,
operator of America's leading financial website and one of the 50 most visited
sites in the world, launched last month. The site, which aims to become the
leading online source of real-time news and interactive data for European
private investors, has made a strong start in attracting both visitors and
revenues.

Pearson now owns 60% of FT Interactive Data, following its merger, completed
earlier this year, with Data Broadcasting Corporation. The integration of the
two businesses is going well and delivering significant revenue and cost
synergies.

Recoletos, our Spanish media group, delivered strong growth across both its
print titles and online services, increasing advertising revenues by some 30%.
In June, average daily sales of Marca, Spain's leading sports newspaper,
increased by 8% with other Recoletos titles - Telva and Actualidad Economica -
achieving similar sales growth. Recoletos continues to develop its position as
Spain's leading online media group, with its sites generating total page views
of some 65m in June 2000, up from 9m in June last year. This growth means
that, with El Mundo, the leading Spanish daily newspaper in which it owns a
30% stake, Recoletos is now the second most visited portal in Spain.

First half losses of £9m in Financial Times Joint Ventures reflect our share
of the start up costs of the Financial Times Deutschland and Financial Times
MarketWatch.  In Associates a strong underlying performance from BDFM our
South African business publishing operation, and The Economist Group were
offset by one off restructuring charges at The Economist Group.

The Penguin Group

£m                      2000        1999          %       1999
                   half year   half year     change  full year
Sales                                                         
Penguin                  294         263        12%        565
Dorling Kindersley        32           -          -          -
                         326         263          -        565
Operating profit                                              
Penguin                   37          31        19%         65
Dorling Kindersley       (4)           -          -          -
                          33          31          -         65

Investment by The Penguin group in building a stronger front-list of new and
established authors is paying dividends. In the year to date, we have notched
up 58 titles on the New York Times best-sellers list (up from 34 in 1999) and
31 titles on the Sunday Times best-sellers list (up from 22 in 1999.)  Our
best-seller performance in the second half of 2000 is projected to be strong,
as we publish new titles from some of our brand name authors.  We are also
benefiting from further steps to improve our supply chain and business
processes. In the US, warehousing consolidation, a new web enabled order
shipping and tracking system and continuing growth in online sales are all
helping to improve the economics of our publishing business. We are also
stepping up the digitisation of our titles, expanding our E-Book publishing
programme and using the Internet to promote our authors and build more direct
relationships with our customers.  We continue to build and broaden the
visibility of the Penguin brand.  We launched the next phase of our UK brand
campaign, revitalised our Viking imprint in the US and acquired world-wide
author rights.  On May 10, we completed the acquisition of Dorling Kindersley,
the leading illustrated reference publisher.  The Dorling Kindersley
integration is on track, delivering scope for significant margin improvements
and creating new publishing opportunities across all media.  Its attractive,
wholly owned digital content, also creates new opportunities across all our
companies.

Pearson Television

£m                      2000        1999          %       1999
                   half year   half year     change  full year
                                                              
Sales                    164         159         3%        355
Operating                                                     
profit/(loss)
Pearson TV                31          35                    74
Channel 5                  1         (3)                   (7)
BskyB                      -           1                     1
                          32          33                    68

Pearson Television increased sales by 3%, with its stable of serial dramas and
game shows continuing to deliver good peak time audiences, particularly across
Europe. Operating profits dipped slightly as it increased investment in
developing the new shows and formats that will refresh its television
production business. For the first time, we can report a profit from our stake
in Channel 5, which continues to grow audience and advertising share ahead of
budget.

Last week, we completed the merger of Pearson Television and CLT-Ufa to create
Europe's leading pan European integrated broadcast and content company. The
RTL Group, in which Pearson will have a 22% stake, is now listed on the London
Stock Exchange and is valued at some £16 billion.

OUTLOOK

Our business operations have made a strong start to the second half of the
year and are trading in line with our expectations. We continue to step up our
investment in developing the Internet enterprises that will secure Pearson's
longer term growth.

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