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Publishing business cuts dividend by nearly three quarters

Academic publisher Pearson (PSON) has slashed its first half dividend by 72% from 18p to 5p as it launches a new wave of restructuring.

The stock has historically been a favourite holding for income funds but no longer fits the bill based on investment bank Liberum Capital’s forecast full year dividend of between 14p and 15p.

This implies a modest yield of just 2.2% based on a share price of 647p. Scope to grow the payout is limited thanks to net debt of £1.63bn.

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