Dividend payouts from British companies enjoy record quarter (but growth is slowing)

Dividend payouts by British firms hit its largest ever quarterly total of £25.3bn in the second quarter of 2013, with media, financial services and food producers all reporting double digit dividend growth.

But Capita Registrars, who conducted the research, says growth is slowing, revising down its expected underlying dividend growth to 7.7 per cent from 8.6 per cent. It now expects total payouts for the year to hit £81.4bn – a 1.1 per cent increase compared with 2012 and the slowest headline and underlying growth rate in three years.

And special dividends came in at a stronger-than-expected £1.2bn, thanks to shows of strength from Antofagasta, Standard Life and ITV - although this is down on last year's £1.5bn.

Justin Cooper, chief executive of Capita Registrars, said:

A record quarter is well worth cheering, and the second quarter's £25bn total is a staggering amount. It is however part of a wider picture that is seeing the pace of dividend growth slow down, as we warned earlier this year, following a profit squeeze on UK firms.

Dividends are not falling, they are merely growing more slowly, but slow enough for us to further trim our underlying forecast for the year.