Good morning, everyone. Welcome to Pearson's nine month trading update. If you have any questions, please put them in the chat function during the presentation. And with that, I will hand over to Andy.
Hi, good morning. Thanks a lot, Joe, and welcome, everyone, to today's Q3 trading update call. I hope you're all keeping safe and well. And as you can see, I'm here in London at long last with our Chief Financial Officer, Sally Johnson. The two of us will briefly run through the presentation before taking any questions that you may have.
So turning straight to the presentation. We continue to deliver the new strategy at pace with momentum in the business helping us to deliver strong operational and financial progress despite the continuing effects of COVID-nineteen in some markets. With a strong management team in place who are laser focused on execution, We've successfully launched our learning service in the third quarter, and we're confident that we can deliver long term sustainable growth underpinned by a strong balance sheet. Moving on to the highlights. Our group financial performance for the nine month period is encouraging with underlying revenues up 10% and our full year outlook continuing to be in line with market expectations.
Q3 has seen a slightly different shape to that which we originally anticipated, with a stronger performance in assessments and qualifications helping to offset a COVID led decline in enrollments in U. S. Higher education courseware, which I'll come back to in a moment. Our Pearson plus service has got off to a good start. It's only twelve weeks since launch, but importantly, we've seen a strong response from students, faculty and authors.
So overall, we're on track to deliver in line with guidance that we set out in March. I'd like to start by focusing on our Assessment and Qualifications division. Revenue grew 24% year to date with a strong performance across Pearson VUE, School Assessment and Clinical Assessment. As I've mentioned before, everything that we do across the whole company has the potential to lead to some form of assessment, qualification or certification. The COVID-nineteen pandemic has accelerated the trend of more people looking to upskill and reskill.
And we've seen this particularly in Pearson VUE, our professional certification business, through its strong growth this year driven by continuing demand, particularly in the IT sector as more people look to find work in the digital economy. This encouraging performance helped offset declining enrollments in U. Education courseware. As you know, we'd anticipated a recovery in enrollments this year given both the number of deferrals of students going to college in fall twenty twenty and a successful vaccine rollout in The U. S.
In the first half of the year. While no market data for the full back to school period is available as of yet, our own internal analysis and channel checks indicate that weighted enrollments have likely declined close to mid single digit, with particular weakness at community colleges. We believe that this has been driven by a surge in the Delta variant over the summer months as this graphic shows, spiking dramatically in July and continuing through the key back to school period in August, which combined with a strengthening of The U. S. Labor market appears to have resulted in fewer enrollments, particularly as I mentioned in community colleges.
In addition, we also saw an impact on our print digital mix with print and packages continuing to decline in favor platform and e text, but not as acutely as we've seen in previous years. Now we believe this was due to two short term issues. Firstly, advertising restrictions were introduced by Google earlier in the year as the industry seeks to address the issue of digital book piracy. Product listing ads, otherwise known as PLAs, an example of which you can see on this slide, were removed for all digital books globally. That meant that when students search for their text, they were only shown print textbook options.
No digital books were allowed to be advertised, including our own Pearson plus service, and we believe that this has influenced purchasing towards print textbooks. Secondly, this back to school period essentially had two cohorts of students attending on campus for the first time. We had both this year's freshers and last year's freshers. So more students were making their first trip to campus bookstores, which we believed influenced their purchases. As I said, we're encouraged by the uptake of our Pearson plus service so far.
In just twelve weeks, we've acquired over 2,000,000 registered users, reflecting a strong uptake from MyLab and Mastering users and more than 100,000 incremental paid subscriptions. I know that many of you have been following the launch intently, so I think it's worth explaining why we're reporting both sets of numbers in terms of the overall registered users and a subset of paid subscriptions. We consider total registered users as the key reporting metric. The reason for this is that our aim is to establish Pearson plus with as large a number of consumers as possible and to continue to expand this reach as we build out the capabilities of the product going forward, and we look forward to a lifetime of learning. Having a large and growing customer base using Pearson plus gives us a powerful understanding of our users' learning preferences and needs, allowing us to iterate and further enhance the learner experience as well as deliver better outcomes and product effectiveness.
As our reach expands, so will our capabilities, enhancing our ability to serve more consumers and creating a positive flywheel for Pearson plus It's also important to understand how students consume digital content in a learning context. Many students access their eText solely through a browser, usually on a laptop as that provides the largest real estate to work on. So to understand the total reach of the product, we are sharing registered users' data. Publicly available app download data only tells part of the story itself is a subset of the overall usage experience. In addition, one of the other ways of accessing the Pearson plus service is, of course, through the App Store.
And there, we've seen a rating of 4.7. Alongside this, the service has a conversion rate, which has risen threefold since launch. And we've had a positive response from students as well as from faculty and authors, which shows strong product market fit. As expected, the revenue contribution is still pretty small at this stage as we scale. We expect that to change as we build awareness and add more content and launch new features and products onto the platform.
Now I'm sure you'll have some questions on Pearson plus so let me pause there and hand over to Sally, who will run you through the financials before I come back to give an update on our progress in more detail.
Sally? Thanks, Andy, and good morning, everybody. So as Andy has said, overall, we've seen good financial progress through the first nine months. Revenue has grown 10% with strong virtual learning growth and post COVID recovery in assessments and qualifications in English more than offsetting an expected decline in Higher Ed. Running through each of the elements by division.
In Virtual Learning, revenue grew 14%, with strong growth in virtual schools due to enrollment growth in the 2021 academic year and school district partnerships. In Online Program Management, underlying growth was offset by the impact of discontinued programs in The U. S. And Australia, the impact of which we expect to end this year. Course enrollments grew 8% on an underlying basis.
In virtual schools, we've seen slight enrollment growth for the 'twenty one-'twenty two academic year due to the continuing uncertainty around COVID-nineteen in The U. S. Revenue will be broadly flat in H2 as enrollment growth has been offset by pricing mix with the uneven enrollment distribution across U. S. States.
In higher education, revenue was down 7% as growth in international courseware, including Canada and The U. K, was offset by a 9% decline in The U. S. We expected USHE courseware to be down by less than last year, which it was, but the decline would have been lower had it not been for the weaker enrollments than anticipated. As we look to the longer term and the resolution of the PLA challenge Andy outlined, we remain confident in the opportunity to recapture the secondary market.
We're also encouraged by President Biden's Build Back Better proposal, which includes access to tuition free community colleges. If passed, this will support enrollments, which should benefit the industry over the longer term. In English Language Learning, revenue grew 15% due mainly to a COVID-nineteen recovery from 2020. PTE revenue grew strongly as test centers largely reopened, albeit pressure remains due to reduced global mobility and border closures in our key Australian market. We see strong future growth opportunities as borders reopen and in The U.
K.-bound market with the winning of The U. K. Home office CELT contract in 2019. English courseware rebounded strongly, driven by international growth across most of our markets, although growth in China was impacted in the third quarter by the recent government reforms. In our Workforce Skills business, revenue grew 5%, mainly due to the growth in GED and TalentLens, which have been impacted by COVID-nineteen in 2020.
BTEC and apprenticeship revenue was flat. Last but certainly not least, our assessments and qualifications business had a strong performance with revenue up 24%. Q3 saw growth in each element of the division despite a challenging comparison for View in particular. And in Pearson View, sales grew strongly due to recovery post COVID-nineteen as well as ongoing high growth in our online proctoring service, On View, where test volumes rose to £2,300,000 compared to £1,300,000 in the same period in 2020. U.
S. Student assessment revenue grew strongly following exam cancellations in 2020 with a phasing benefit in the third quarter, reopening of schools and the delivery of a backlog of education assessments. And in U. K. School assessment, revenue was slightly down due to a higher rebate of exam fees to school versus 2020, partly offset by growth in courseware.
As a reminder, the rebate impacts revenue but not profit as it's a return of safe cost to customers. Revenue in those businesses under strategic review grew 7%, driven by a COVID-nineteen recovery in courseware and a phasing benefit in school purchases in South Africa in Q3 in 2021. The strategic review of international courseware local publishing is moving into the next phase, and we've begun marketing a substantial part of the business as well as having completed our sale of Brazilian Sistemis, which we had announced in March. We are in a strong financial position with low net debt and strong liquidity. At the end of nine months, net debt stood at around £700,000,000 compared to £900,000,000 in 2020, with strong operating cash flow offset by dividends.
And with that, I'll hand back to Andy.
Thanks, Sally. Before we get to Q and A, I want to mention a couple of small but exciting investments that we made during the last quarter. In September, we announced the strategically significant acquisition of Fathom, a workforce AI and predictive analytics company. We'll use Fathom's sophisticated AI to model how technological change will disrupt jobs and accurately map the service need to future proof workforces at scale. We'll then add Pearson's deep understanding of learning at different life stages to build insights at an individual level, creating content that gives employers and individuals access to the learning they need to unlock their full potential.
This acquisition is an important early step for building out our workforce skills division. Along with English language learning, we have big and bold strategies, which we will further outline during a deeper dive at our full year results. I'm also thrilled today to announce our partnership with Simon Fuller and nineteen Entertainment to create the Academy of Popular Performing Arts or the Academy of Pop, a new entertainment driven performing arts digital learning platform. The Academy of Pop will offer innovative coaching from world renowned instructors and provide performers of all levels with the opportunity to watch, participate and progress within a passionately engaged global community. You can find out more information in today's dedicated press release, and Simon and his team will be providing more details as we get close to the launch in early twenty twenty two.
I think this is an exciting new venture for Pearson, and I can't wait to share more with you. So to conclude, we have a clear strategy, a strong team, consumer grade products that are increasingly well positioned for sustainable long term growth, all underpinned by a strong balance sheet. I'm really pleased with the strategic strides that we're making, and I'm excited by the encouraging momentum right across the business as we move full steam ahead to execute on our plans. And with that, Sally and I will be happy to take your questions. So over to you, Jo.
Thanks, Andy. Thanks, Sally. As a quick reminder, if you have any questions, please put them in the chat function. So starting off with let's kick off with Thompsonhurst from Citigroup. Andy, one for you and then Sally, second one for you.
Can you talk about what you want to achieve with a legal case against Chegg? And is the end game the removal of simple answer based study help offerings? And Sally, can you talk about mechanical impact of Q3 run rate on Q4 growth? Should we expect the overall rate of decline in the fourth quarter to be moderate as a consequence? Andy, do you want to take the Chegg one?
Sure. Hi, Tom. I'm not going to comment any further to the suit that was filed. I think you'll find all the relevant information within the suit that was filed. We filed the suit because we believe in the protection of intellectual property.
And there's nothing more to say, we'll let the legal duty sort of take its course.
And Tom, you talked about a decline. So I'm going to assume that your question was particularly focused at Higher Ed Courseware, but just to emphasize that we are happy with market expectations from a profit point of view and as we look to revenues as well. So U. S. Higher Ed, we saw a 9% decline for September year to date.
I'd expect that to be broadly the same as we look out to the full year. In Q4, we've got a couple of things going on. As you know, it's a big print quarter, so there'll be a drag from that. But also, as digital becomes a more important part of our business, obviously, digital revenues have an element of deferred revenue, and so that's a positive in Q4 as well. Thanks for your question, Tom.
Thanks, both. Next question comes from Adam Berlin from UBS. Sally, how can you be sure that the enrollment declines you are seeing in U. S. Higher education courseware are driven by the market rather than market share?
So thanks for your question, Adam. At the moment, we don't have the external enrollment data. We're expecting that to come through in this month and then to be trued up in December. So we've done an intense piece of work looking at various internal factors. So sales teams talking to universities, sales teams talking to our channel, and then we have data within our systems, things like number of people being registered on a course by course basis.
So you can see enrollments there. From an adoption share point of view, we also really closely track that throughout the year, and we're really confident that we've not lost any adoption share.
Thanks, Sally. Next question comes from Peter Chester at One Invest. Andy, one for you. Could you please help us understand how Pearson has placed the potential boost to U. S.
Community college enrollment from pending legislation in Congress?
Yes. Hi, Peter. So as company, we over index in two areas within higher ed. The first is within the first two years of full year college system. And the reason we do that is that's where there's more market available, more market share for us and more volume.
And likewise, we over index within community colleges as well. So as a company, we favor more the community college in the first two years of four year college. And as a result of that, as if President Biden's proposals go through, then and we see the resulting impact on attendance and enrollments into community college, we believe that, that will be received well and will be good for Pearson.
And for people who don't know so much about Biden's bill, it's basically looking at two lots of two extra years funding effectively for education in preschool, which, I guess, a supportive parents who might be thinking about higher education might flow through, but the key part for us is those two extra years in higher education and particularly community colleges probably comes through from a practical point of view, more in 'twenty three than 'twenty two, but it should be positive for the whole industry in the long term.
Yes. And it's also community colleges are a bit like further education establishments. You go and you take your two year in many parts of the country, take your two year community college and then you transfer into a four year college. So there's a benefit there as well.
Thanks, both. Next question comes from Sami from Exane. Sally, a couple for you. Firstly, can you please comment on how you see top line growth trends in Q4 by division? And secondly, given the print versus digital mix, do you expect U.
S. Higher edged courseware to revert to growth in full year 'twenty two?
Those are probably both for me. And when you said Sammy, I thought you said Sally there for a minute. That's clever of me. So as we look to Q4 by division, we had pent up demand in the assessments division across Q3 and Q4 last year. In Q3, that's somewhat offset by that school assessments piece, where spring testing moved into full.
So there's a tougher comparison in Q4. I've talked about U. S. Higher Ed Courseware. And then in virtual learning, virtual schools, I expect to be flat, the enrollments piece offset by the pricing mix that I talked about and then the same for OPM, given that discontinued piece, but just to emphasize that spend within through the discontinued piece looking out into the future.
Full year 'twenty two, I think we'll talk about full year 'twenty two when we get there. But I think as we look at the things that have happened across this summer, enrollments driven by COVID and by the labor market and then the PLA points that we also made. COVID hopefully drops away as being an issue across the piece. We know that enrollments have tended to go in line with the labor market. And the PLA issue, we're really confident is one that can be resolved.
So there are a range of possibilities for enrollments. Of course, we've got the Biden bill as we look out to 2023, maybe a small impact in 2022 as well.
Thanks, Sally. That's great. So the next question comes from Matt Walker at Credit Suisse. One probably for both of First one, Sally. Do you expect full year decline in Higher Ed to be better or worse than minus 7%?
And on the second one, Andy and Sally both sort of probably pass this bit here. Can you please explain why there are 100,000 paid users on Pearson plus and why the 2,000,000 are not paying?
I'll take the first one. I'll make a start at the second one, and I'm sure you'll want to complement the second one because So know how passionate you feel about in Higher Ed, I expect that 7% that you see Q3 year to date to be about broadly the same at the end of the year and the 9% within U. S. Higher Ed, which is a subset of that, to be broadly the same at the end of the year as well. The 100,000 Pearson plus subscribers are those incremental customers that are coming with the £999 or $14.99 pounds price point.
The people that are coming to us by MyLabs and Mastering, of course, are paying as well. They're just paying as part of their MLL package.
Yes. That's an important consideration to think one or another. As Sally said, we have about 6,000,000 total users of mastering in MyLab. They're phased over the two semesters. So we don't get 100% of usage in just this first semester.
So you'll see more users come on to the MLM platform for the second semester. And so we're seeing a lot of those users choosing to take Pearson plus as their eText accompanying MLM bundle, which is very, very encouraging, and we're seeing some great usage data that's coming out of that initial cohort. The way to look at the other 100,000 is those students who are not part of the MLM platform necessarily and are just gone on to search for an individual product title and have then once selected the title, despite the issues of the PLA as we discussed earlier, have selected to choose to subscribe to Pearson plus to access that title. So that's why I was saying earlier, it's very important to think of the overall universe as that 2,000,000 registered users. That's the cohort that we're creating a relationship with that we're starting to gain consumer insights and can help to continue that relationship over time.
And within that then, there is this subset of individuals that we also believe will grow quite significantly who are coming to Pearson plus just solely to select their textbooks.
Thanks, Andy and Sally. Next question comes from Nick Dempsey from Barclays. Sally, a couple actually, the three. So let's take the first two and then we'll come back to the third one. Regarding the digital performance in the third quarter in U.
S. Higher Education, I understand your point in PLA, but one, do you think you have lost share back to the secondary market during the quarter? And secondly, do you think you've lost share to Cengage and McGraw Hill?
So thanks for the question, Nick. In terms of losing share to Cengage and McGraw Hill, that's why I've been quite specific about adoption share. We are absolutely confident that we have not lost adoption share. From a secondary market point of view, I think the way I'd put it is that we haven't made the strides into secondary market given PLA that we might have hoped to otherwise. The PLA issue is absolutely resolvable, though.
And then the third one, Jo, you know I can't remember three, so thank you for that.
Yes, actually. That's why I sort of come back. I think there's another one coming, too. Next one is from Nick. The drop through of revenues lost in U.
S. Higher Education has been high in the past. If that line is a bit worse than you thought, how are you offsetting that at the operation profit level? Will you be working to achieve extra savings in the fourth quarter?
So Nick, you're quite right. The operating leverage on U. S. Higher Ed is very high. But as we look across our performance, our performance and assessments has been very good, as we've said.
We're always cost conscious, but we have not scaled back on investment, and our bonus accrual remains intact.
It also plays to the strength, Nick, the different five divisions. It's really important, and I know historically there's been a, for good reason, a focus on just U. S. Higher Ed. But as we've seen in the last quarter, the strength of our assessment and qualifications business, and you're going to see this, We're trying to create a portfolio of businesses that are complementary to each other that actually kind of create that flywheel effect.
A lot of the upside in assessments and calls, as I mentioned in my remarks, was actually individuals upskilling and reskilling within the workforce environment with their digital and data skills. So I'm very pleased and encouraged by the strength of the company as a whole.
Thanks, Andy and Sally. And actually just staying with Nick, we've got a couple more. Nick's next one is, it looks as though virtual learning has declined somewhat in Q3, but you're expecting stability for H2. The comps look pretty much the same for that division in Q3 and Q4. So what's going to drive better growth in Q4?
And the next one is, if online proctoring is here to stay as an important factor at Pearson VUE, is that a medium term risk because it might lower the barriers to entry in this sector? Sally, do you want to apply
absolutely. So virtual learning was actually slightly up in Q3. Yes, as I said, I'm expecting it to be flat in Q4 for the reasons we've given, obviously, it was really strong in the first part of the year, given that 40% enrollment increase that we had. And I think we need to kind of step back and reflect on that, a 40% increase last year, and we've held enrollments flat. I think we shouldn't lose sight of that, so we'll see strong growth for the full year.
Can I take that?
Yes. The online proctoring book, the proctoring business, we are delivering very high stake certificates here from Pearson Test of English through to those in data and cloud management and clinical assessments. These are very high stakes and need a high degree of security. So whether it's in a physical environment and particularly in the virtual environment, the work the team did last year to invest in a really rigorous and secure online proctoring environment, it's not easy trying to maintain that security and deliver the quality of service that our clients demand. So there's it's quite a high threshold.
And the team, as I think we mentioned last invested a lot of time, money and effort and resources around that technology to make sure that it works. And I think it is going to stay. It's hard to replicate at scale, and not all certificates are suitable or all exams rather are suitable for the online proctoring environment. So, I think going forward, you're going to see this continued hybrid rather and between examinations that are taken in a physical location and those that are taken remotely. Anything to add?
Yes. I mean, I think it will be a continuation over time. I think one of the positives within the assessment world of COVID has been that something that was really nascent and therefore, we probably haven't put very much investment behind because our customers weren't particularly interested in it or there was only a small subset of customers that were interested in it, has meant that we've invested and now are probably market leader in terms of the customer experience in the space. So I think we'll probably see both for some time to come. Both will be important, but we've got capabilities in both spaces now.
Exactly.
Thanks, both. Next question both give a bit of color on the next question, I think. It comes from Luke Smith at Premier Miten. How do you intend to grow your OPM business, given how competitive the market is with Coursera and to you having such a strong presence? And do you intend to launch a comprehensive direct to consumer online course platform marketplace akin to your peers?
It is a I'll kick off. It is a competitive space, and we've chosen to focus on quality of our partners and partnerships over necessarily over quantity. And I think that strategy is paying off for us and very much enjoy the relationship that we have with all of our partners in the OPM space. And in fact, as our partners will attest to, we see those relationships extending beyond very much beyond the pure OPM play. And as our college partners look to think about how they want to expand their reach and their opportunities, we're having some interesting discussions with them in terms of how we can move beyond just the pure OPM play, particularly Maryville, Arizona State University, Northeastern, just to name three.
So I think that we're thinking in this slightly more broadly than the pure OPM play as regards to that. As regards to marketplace, similarly, we're not necessarily looking to get into a direct to consumer relationship in that specific space. Although as you see Pearson plus as that develops, the opportunity for us to learn more about learners' needs and requirements and potential careers and to be able to support them as they move from education into employment, I think, is a very interesting opportunity. The amount of data at scale and insight that we will get about a learner's journey will be very informative. And in many ways, we kind of get a first look.
And that's also true, by the way, with the Pearson VUE business. In a way, we get to know about candidates who are taking a nursing exam, for example, before pretty much everyone else, apart from the candidates themselves. And I think that's very interesting. So as we start to create these relationships and as we get more data, particularly through the Pearson plus platform, it does allow us to I've said this in the past, we may be starting in The U. S.
Higher ed and with textbooks, but that is by no means the limit of our ambition for Pearson plus Next
question comes from Omar from Morgan Stanley. Andy, do want to take the first one and maybe Sally second? On Pearson plus do you expect the number of registered users to build during the current semester? Or is 2,000,000 the peak for now? And on the PLA issue, how long do you think it will take to be resolved?
Yes. Hi, Omar. So on the number of registered users, I think it's safe to say that you will see that steadily increase over time. I mentioned that the proportion of mastering in MyLab's users in semester one. And then as we go over into semester two, you'll see a natural increase in registered users.
There's also an awareness factor. Let's not forget that twelve weeks ago, Pearson plus didn't exist. So to create that amount of awareness in the amongst consumers, amongst the student population, I think, is a phenomenal job that's being by the team. And the other thing that we haven't done is change any of the other alternative distribution access points to students to get their material. So I think it's just generally, there was an interesting stat that the team would take me through last week in terms of the dramatic increase in the dedicated search terms on Google for Pearson plus where now students are typing in Pearson plus specifically into the search bar to find us.
And that's a real testament to how much traction the right product market fit, as I've said, the brilliant reviews that we're getting, the 4.7 app store review and the way that we're seeing the functionality in use all bode well, albeit it's early days. As I said, they're encouraging signs. And to your question on the PLA, I mean, we've been this is something that is industry wide, as we said. We've been in very, very positive discussions with Google. I participated myself in a couple of those.
And we believe and fairly confident that there is a solution that delivers what we were trying to achieve in the first place in terms of eliminating digital piracy and also will then allow us to properly advertise the availability of Pearson plus and its pricing and we're fairly confident that, that will be in place in time for return to or back to school 2022.
Thanks, Andy. That's great. Next question we've got a few actually from Sarah from Berenberg. So we'll take it step by step. Sally, first one for you.
Please, can you remind us how much of COVID related savings were in 2020? And how much of that you expect to unwind in 2021?
So COVID related savings were at about £10,000,000 a month when we were going through the sort of acute lockdown period, so over a sort of four ish month period. Some of those will have unwound this year as people have started to get back on the road. Andy's here for a start. And some of it will unwind to an extent next year. But we're cost conscious.
We're focused on it. I don't think travel is probably necessarily going to return to the what we have seen before. I don't think the world of work is going to return to what we've seen before. Offices, we're expecting to people to work from a hybrid perspective. So I don't it's not a particular concern to me.
We're looking at how we're managing the business from a profitability point of view going forward. And I see an increase in profitability over time.
One of the things we've done, Sarah, is really try to keep a close connection with all of our employees, really, really lent into understanding their needs and concerns from their mental well-being at this time to the changing preferences and work habits. We have a number of pulse surveys. One is actually ongoing at the moment where we reach out and engage with our employees to find out how their sentiments are shifting as it relates to travel and the office. We're, in fact, just finished refurbishing 80 Strand. And for me, we're going to maintain flexible working habits.
And for me, offices also change in nature. They're about collaboration, creativity, and connection, sort of three Cs. So we're designing our office environment to be very flexible and to deliver on those particular needs.
Thanks, both. Just carrying on with Sarah's questions. Andy, for you, but also, Sami, you might want to comment on some of the figures. Can you provide some more color on the Chinese reforms and how this impacts your ELL business? And with the issue of PLL in U.
S. Higher Education, just to clarify, are you saying this benefited print sales at the expense of digital?
Can you just repeat? I think there were two separate questions there. Can you just repeat the last one because it sounds like ELL twice. The issue
of PLA in U. S. Higher Education? Yes. You saying this benefited print sales at the expense of digital?
I can take both of those. So from a Chinese reform perspective, it's impacted sales this year. It's not massively material in a Pearson scale of things. It's around about £5,000,000 from a revenue point of view. That's part year, so it's a little bit more next year.
Actually, as you look at how the reforms are working, what's impacting us negatively is the fact the government is encouraging people not to use tutoring outside school, so a kind of a sort of pseudo school environment outside school. And we sell English language learning into those schools, and those schools therefore need less materials. What the government is trying to do though is to encourage people to learn in the school environment, but also from a homeschooling perspective. So there's also an opportunity in this for us in terms of the home learning space, and that's something that we're looking at, at the moment. And then from the PLA point of view and that print digital mix, we have seen a decline in print with people moving into digital.
It's just not been as acute in previous years. And I think if you look at that screenshot that we shared around PLA, the fact that when you search for it, it was just lots of print options that came up for you that's bound to have had an impact. You didn't see Pearson plus £9.99 a month, which would have been the most attractive to students from a pricing point of view. So as we resolve that issue, that's going be a positive. Sorry, anything you'd add?
No. I was going to say, mean, I think on China, I think there has been a lot of stuff written. As Sally said, we're marginally impacted by it. In the long term, given the strength also of the Longman brand in China, there may well be a positive for the business. We're not as exposed, I think, kind of that we're in some of those indexes that we, as a company, are not as exposed as maybe some others are that are in that index.
And you're totally right on the PLA. You've got to imagine that if all you're seeing is print, then there's probably more folks even though it has continued to decline, more folks probably took a print option than we'll do once they have the opportunity access that content via Pearson plus Thanks,
both. And just Sarah's last question is, DVLA contract, can you quantify the impact expect in 2022?
Yes. So in the context of Pearson, again, not massive, so it's a little bit more than $10,000,000 Just to actually explain what has happened here. The DVLA, DVSA contracts used to be we used to have the contract for the whole country. Now it's been regionalized. We've won one of those regions, but also we're delivering the kind of technological grounding for the contract across the whole country as well.
So it's not a lost contract, it's a changed contract.
Thank you. And we've got time for one more question, which comes from Catherine from Goldman Sachs. Andy, question for you. As you build your offering in workforce skills, what should we expect in terms of organic investments versus acquisitions, thinking of Fathom? And how do you plan to go to market in the corporate space, which is typically very fragmented and competitive?
Hi, Catherine. Thanks for the question. I think as we alluded to in my remarks, not only is Fathom a very interesting and high growth business in of itself, It provides abilities that are applicable across the entire company. And Greg and the team are busy at work learning all about Pearson and the opportunities that, that possesses. But particularly, it answers one of the key questions we've heard from employers when we've been going to market over the past several months, which is in terms of we have a large learning budget.
We spend it by traditional means. And we're not sure that we're getting the best return on our investment because we're treating every employer every employee rather in a similar way. What Fathom does is really dive down to understand the learning needs of Catherine as an individual, And then we can utilize some of the assets we have in the rest of our company to start to provide the learning materials that suits Catherine's particular learning needs. And that's been very well received by the employers. So you're going to see I'm not certain we have nothing planned in terms of other investments like that, but I do quite like organic or inorganic investments that where it adds capabilities above and beyond the business itself, capabilities across the whole business, and Fathom certainly does that.
And so I think you'll be seeing some examples of within other divisions of Fathom adding to their capabilities. And then as we've discussed, we're very much we've been engaged for a long period of time with the employer community, the enterprise community, and there are some very, very interesting conversations that are ongoing, have been ongoing, some quite advanced. And so I think as we said in our remarks, when we come to do our full years, we will give you a deeper dive into what some of those are as well as also within our English language learning businesses. Those are the two that the teams have been working on very, very diligently over the past few months. And so we think by the time we come to the beginning of next year, we'll be able to sort of lift the lid on what we're doing in workforce and English language learning.
Anything to add?
No, perfect. Thank you.
Perfect. Back over to Andy and Sally for final wrap up.
Well, thank you very much for joining us this morning. Thank you very much. It's great to actually be here in London. And thanks very much for your interest in the company. And of course, Joe and the team are at hand should you have any other burning questions that you'd like answered.
And thanks very much for your interest in Pearson.
Thanks, everyone.