You are here: Home - Investing - Experienced Investor - News -

UK companies hike dividends to record levels

0
Written by:
23/10/2017
UK companies are increasing their payouts to shareholders at the fastest rate in three years, buoyed by strong profits growth, the weak pound and special dividends from a number of firms, according to the latest Capita Asset Services Dividend Monitor.

UK companies distributed an all-time record £33.3bn in dividends from March to June, comfortably beating the previous record of £29.1bn set over the same period last year.

Dividend payouts were buoyed by a number of special dividends, which – at £4.6bn – were the second-highest on record. This was largely attributable to a £3.2bn payment from National Grid on the sale of its 61% stake in its UK gas distribution business. Lloyds Bank, which is currently seeing improved profits, paid £357m as a special, on top of a £1.2bn regular dividend, while ITV and Intercontinental Hotels also made large payments.

Weaker sterling

Underlying dividends (excluding these special dividends) reached £28.6bn, an increase of 12.6% year-on-year. Around 5% of this increase was attributable to the weaker currency – one-third of the total distributed in the second quarter was declared in US dollars, with euros accounting for a small fraction more – adding £1.2bn to dividends in the second quarter. Without this effect, dividends rose 7.8%.

A resurgent mining sector was an important contributor to increasing payouts. Glencore restarted dividends for the first time since 2015 – it had cancelled them as slumping commodity prices hit its profits. Rio Tinto also paid a much larger dividend than the market expected, while higher copper production and a big increase in profits on silver mining boosted the respective payouts of Antofagasta and Fresnillo.

Weakening financials

The largest dividends – £10.3bn – came from financials, but they grew more slowly than the average; insurance dividends fell year-on-year with cuts from Old Mutual and Admiral. Consumer goods and housebuilders also performed well – every company raised its payout.

Mid-cap and top 100 growth was very similar in underlying terms, at 12.2% and 12.8% respectively. Capita said it expects the prospective yield on equities to be 3.7%.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Break-ins rise by a third as clocks go back

Homeowners should be on guard as claims for theft and burglaries increase by a third once the clocks go back.

Close