Pearson to pay dividend as board takes pay cuts
Pearson said it would pay its final dividend as the education publisher reported trading in line with reduced expectations and pay cuts for its board.
The FTSE 100 company said shareholders would vote on the final dividend of 13.5p a share at Friday's annual general meeting as planned. The payout, up 4% from a year earlier, will be made on 7 May.
Pearson's revenue fell 5% in the first quarter as the Covid-19 crisis hit sales. Chief Executive John Fallon is taking a temporary 25% pay cut and Chairman Sidney Taurel's pay will be halved.
New Chief Financial Officer Sally Johnson will take a 20% pay cut and the board's non-executives will take 25% reductions. In all cases the waived money will go to charities working on Covid-19-related activities.
Pearson said trading in the three months to the end of March was affected by the closure of schools and assessment centres. Use of its digital products and services have grown and interest in its online learning business has grown quickly during the crisis, it said.
Pearson has been making many of its online products available for free during the crisis. It announced a free online portal with courses to help people retrain whose employment prospects had been hit by Covid-19.
Fallon said: "We are in a strong financial position with a healthy balance sheet, low net debt and good liquidity. This enables us to deploy all our people and resources to support our communities as the world's learning moves online at an unprecedented speed and scale."
About a third of FTSE 100 companies have cut, suspended or scrapped dividends during the crisis to conserve cash. Pearson said it had about £0.8bn of liquidity at the end of March and it received £530m in April for its remaining stake in Penguin Random House. The company had already shelved its share buyback programme.
The company said it had not furloughed any of its employees and was instead putting them to work where possible in parts of the business where they were needed.