UK shareholders revelled in £37bn worth of dividends in the second quarter of the year as mining firms and oil giants put bumper profits back in the pockets of investors.
Total payouts in the UK surged 38.6 per cent on a headline basis between April and June, nudged up by the floundering value of sterling which added £1.4bn to the overall value of payout, marking the second-largest quarterly total on record, according to the latest UK Dividend Monitor from Link Group.
Frothy one-off special payments pushed up the value of total payouts while underlying dividends – excluding volatile specials – also jumped by 27 per cent to £32bn.
Ian Stokes, Managing Director, Corporate Markets UK and Europe at Link said Mining firms had pushed up headline payouts again but growth in the sector may be slowing.
“Concerns over global growth have pushed commodity prices sharply lower in recent weeks, though they remain high in historic terms,” he said.
“The sector has confounded expectations more than once before, bending their stated dividend policies at important moments. But if mining dividends have indeed now peaked, they will act as a brake on UK dividend growth in the next twelve months having provided the main engine over the last 24.”
Banking payouts continued to rebound after the Bank of England lifted the restrictions on dividends slapped on UK lenders through the height of the pandemic. Payouts in the sector jumped by two-thirds, and Link Group analysts said they expect banks to regain their position as the third largest dividend-paying sector this year for the first time since 2019.
Oil companies meanwhile rose 41 per cent in the second quarter, but remain at half the levels notched up at their 2019 peak.
Shareholders are set to pocket record sums this year after a jump in planned buy back programmes alongside dividends.
Nearly £36.7bn of buybacks were announced in the first three months of 2022 alone, according to AJ Bell, exceeding the total for 2021.