Cash calls up, dividends fall

UK&nbsp;COMPANIES raised more capital than they paid out in dividends in the first half of 2009, according to research to be published by Capita Registrars today.<br /><br />The Dividend Monitor will show that falling profits have led firms to pay out just &pound;28.3bn in dividends in the period, nine per cent lower than in the first half of 2008.<br /><br />&ldquo;This creates uncertainty and potential cash flow problems for those who rely on regular income from shares, such as insurance companies and some private investors,&rdquo; said Paul Taylor, head of corporate advisory as Capita Registrars.<br /><br />Banks, which make up a huge portion of the total amount paid, cut dividends by 29 per cent, while perceived safe havens &ndash; such as energy companies, tobacco stocks and pharmaceuticals &ndash; increased their returns to investors. Excluding banks, the overall drop was three per cent.<br /><br />The research says that the credit crunch has led to an unprecedented amount of capital being raised through secondary issues of equity.<br /><br />Funds raised in the first six months of the year totalled &pound;51bn, almost double the amount paid out in dividends, with &pound;27bn of that being raised by the banking sector.<br /><br />Capita predicts that full-year 2009 total dividend return will hit just &pound;52bn, down 13 per cent from 2008, and only slightly above the amount of capital raised to date.