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Pearson investors surprised with dividend cut of 72%

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Staff Writer | August 4, 2017
Investors in Pearson got their first exact figure for the company's new re-based payout levels, as the education publisher reiterated its full-year guidance and said it will cut 3,000 jobs as part of its ongoing restructuring.
Surprise   A challenging environment
In July, Pearson had said it would rebase its dividend amid asset disposals, a "challenging environment", and the need to both invest in its business and maintain a "healthy balance sheet" in order to maintain a "solid investment grade rating".

The market found out what that really meant for Pearson's dividend on Friday, as it declared a 72% cut to its payout to 5 pence from the 18p it had paid for the first half of 2016.

Pearson is undergoing a significant restructuring as part of efforts to slim its business to focus on education.

This follows a series of high-profile asset sales starting in 2015, with its most recent being the sale of nearly half of its stake in publishing venture Penguin Random House for USD1 billion, announced last month.