To say that Pearson (PSON) needs a boost to its balance sheet would be an understatement. The publishing and education group announced that it has sold a 22 per cent stake in consumer book publishing company Penguin Random House to German media giant Bertelsmann, netting $1bn (£780m) on the sale. This will be used to improve its balance sheet and to return £300m to shareholders through a share buyback scheme. Its remaining 25 per cent stake in Penguin is expected to “maintain a significant income stream” that will be used to pay a “sustainable and progressive dividend”, as the deal also sees Penguin recapitalise its debt.
Life has not been easy for Pearson in recent years. In the last set of full-year results the FTSE 100 constituent reported a 2 per cent increase in revenue to £4.55bn, but pre-tax profit fell to a £2.56bn loss as educators move away from print towards digital resources and regulatory changes presented difficulties in the UK and US higher education business.
