Dividend payments reached £15.3bn, a first-quarter record – or £15.4bn including special payments, according to the latest UK Dividend Monitor from Capita Asset Services.

It said that while the headline figure was impressive, the growth depended heavily on large exchange rate gains.

The report said the first quarter was heavily skewed towards dividends reported in foreign currencies, accounting for three-fifths of the total distributed.

Over the quarter, Capita said exchange rate gains added £1.7bn to the payout total, the equivalent of a 12% increase for the headline growth rate.

The £15.4bn total came despite a 90% decline in special dividends (dividends paid out in additional to the normal dividends) to just £110m. This was their weakest quarter in almost six years, and the fall was twice as large as Capita expected.

In addition to exchange rate gains, the stronger-than-expected rebound in BHP Billiton’s pay-out, provided the figure with a boost. Without this, the underlying dividends would have fallen slightly year-on-year.

Of the main industry groupings, oil, gas and energy, resources and commodities, consumer goods & housebuilding, and telecoms performed best. Retail & consumer services and healthcare & pharmaceuticals fell, mainly owing to lower special dividends. Overall, 11 out of 17 sectors paid more in quarter one this year than last.

Capita expects underlying dividends to rise 7.7% to £84.6bn in 2017, with three quarters of that growth coming from sterling’s weakness. This is based on the assumption that exchange rates don’t change.

Headline dividends are expected to rise by just 2.8% to £87.1bn. This is £0.4bn lower than Capita’s earlier forecast, owing to the weaker-than-expected special dividends in the first quarter.

‘Profit growth has been rather meagre from UK plc of late’

Justin Cooper, chief executive of Shareholder Solutions, part of Capita Asset Services, said UK firms had delivered a record for a first quarter before the big drop in special dividends was accounted for but investors won’t be satisfied for long.

He said: “The sugar rush of exchange rate gains won’t leave investors feeling satisfied for long. It’s going to wear off quickly in the third quarter, unless there is a second leg downwards in the pound. That cash is of course real, at least in sterling terms, but only long-term profit growth can deliver sustainable increases in the income from shares. Unfortunately, profit growth has been rather meagre from UK plc of late.”

Cooper said that the mid-cap companies will continue to outperform the large caps as the shine of sterling’s weakness fades.

“Global growth is picking up strongly and that should spur expansion in company earnings,” he said.

“Dividends will benefit in concert, though they tend to lag profit growth by about six months. That bodes well for the top 100, but in the meantime, the exciting story rests with the mid-caps. They depend most on the prospects for the domestic economy, while those in the top 100 are more related to global economic trends and the exchange rate. We think the mid-caps will continue to outperform their larger counterparts this year on a constant-currency basis, while the top 100 will lose the shine sterling’s weakness has burnished them with.”