Strong dividend payouts bolster the first quarter

Michael Bow
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SHAREHOLDER payouts had their strongest underlying growth for three years last quarter, aided by a stronger dollar and robust oil sector dividends.

Stripping out special dividends and delayed dividends, payouts rose 10.4 per cent for the first quarter of this year, putting 2015 on course to be the best year for dividend growth since 2012, according to Capita figures.

“2015 is off to a flying start for income investors, boding well for the full year,” Capita Asset Services’ Justin Cooper said.

“At last we will see strong growth this year, after a disappointing couple of years for dividend growth.”

Headline dividend payouts weighed in at £14.75bn last quarter – down 52 per cent at a headline level.

But leaving aside last year’s bumper £15.9bn Vodafone payout, which distorted first quarter figures, and Barclays’ dividend, which was shifted into the second quarter this year, the amount of money returned to investors helped drive up Capita’s forecasts.

The group now expects dividend payouts to total £86.5bn for this year – one of the highest on record.

The dollar was 12 per cent higher against the pound than a year ago at the end of the first quarter, helping the bottom line of the 53 firms in the FTSE 350 reporting in the currency.

A rise in BP and Shell total payouts also helped to drive the total higher.