Record year for dividends

PastryDividends paid in the UK, which is home to some of the largest dividend payers in Europe, surged to a record high in the second quarter of this year. 

In its latest Dividend Monitor, Capita Registrars recorded an 18.4% increase to £22.6 billion (€29 billion) in the second quarter. This brings the total dividends paid in the first half to £41.4 billion. 

Though it was large one-off payments that boosted the total amount, underlying growth strengthened. 

Companies growing dividends far outnumbered those reducing payouts. A total of 250 companies paid a dividend, up from 47 in the same period last year.  

Among these, 212 increased, started or reinstated their payments. Meanwhile, 34 cut or cancelled them while 12 kept them the same. Capita Registrars says the ratio of risers to fallers is an “extremely healthy” 6.2:1. 

FTSE 100 companies showed the strongest growth, paying out 19% more. Almost a third of this was special dividends. Payouts by FTSE 250 companies rose by 12.9%. 

Following the second quarter data, Capita Registrars upped its headline forecast to £78.3 billion, which, if met, would mark a new record. 

Taking payouts from the first and second quarter, dividends totalled £41.4 billion, a 21.3% increase. This compares to a previous record of £34.5 billion half year high in 2008, before the economic and financial crisis.  

“Cash flow is still strong, yet corporate investment is very depressed,” said Charles Cryer, chief executive of Capita Registrars. “We are more cautious about 2013 mainly because it is hard to see the magnitude of special payments being repeated, leaving regular dividends to do the heavy lifting.”

©2012 funds europe