Shareholders braced for fall in special divis

Marion Dakers
THE AMOUNT of dividend payments doled out by British firms fell almost 25 per cent to £14.1bn in the first quarter of the year, though the numbers were skewed by a string of bumper payouts a year ago, figures out today show.

Ignoring one-offs, Capita Registrars estimates that payments rose an underlying 6.1 per cent on a year ago, a slower pace of growth than the 9.2 per cent seen throughout 2012.

For the full year, Capita expects UK dividends to total £80.5bn in the year, broadly flat on last year.

This includes £1.9bn for special dividends, much lower than the £6.8bn distributed to investors in 2012.

Massive special divis from Vodafone and Cairn last year have given the impression of a stark drop at the start of this year, as has HSBC’s decision to pay its dividend in December rather than January.

Justin Cooper, chief executive of Capita Registrars, said the slowdown “is not a rout”.

“Dividends have played catch up over the last two years, and while we do still expect healthy growth, it will be at levels more consistent with the performance in company profits,” he said.

“Dividends cannot continue to outstrip profit growth indefinitely.”

By sector, oil and gas companies have been the most generous to shareholders, handing over £3.23bn in the quarter.

Healthcare firms gave back £2.65bn, though growth was dampened by cost pruning at pharma giants AstraZeneca and GlaxoSmithKline.

Takings from telecoms firms were down by half, at £2.08bn, as Vodafone’s £2.2bn special dividend fuelled by payouts from US partner Verizon was not repeated.

This meant Royal Dutch Shell was the FTSE’s biggest single payer, with almost $4bn returned to investors.