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UK investors on course for record year of dividends

UK dividends on course for a record year as a series of one-off windfalls and the fall in the pound increase Capita’s 12-month forecast.

 
UK investors on course for record year of dividends

UK dividends are on course for a record year as a series of one-off windfalls and the fall in the value of sterling increased Capita’s 12-month forecast by 7% to an all-time high of £90.6 billion.

Capita Asset Service’s quarterly Dividend Monitor upped its full-year prediction following a bumper £33.3 billion paid out in the second quarter, 15% higher than the same period of 2016.

Even stripping out the step-change fall in the value of the pound since last year’s Brexit vote, the underlying rate of growth still stood at 8%, the fastest appreciation in two years.

That was fuelled by underlying growth, in addition to £4.6 billion in special dividends – the majority of which was the one time payout of £3.2 billion by National Grid (NG) following the sale of its UK distribution network.

Lloyds Banking Group (LLOY) additionally paid out £357 million in a special payment in addition to its scheduled £1.2 billion dividend. Those helped take the sting from the removal of a scheduled dividend from Sky (SKYB) as it awaits clearance of its purchase by parent group Fox.

‘The gloves came off in the second quarter, as UK plc limbered up to deliver a knockout year in dividends,’ said Capita’s chief executive for shareholder solutions Justin Cooper.  

‘Shareholders can be thankful they had punchy special dividends and the weak pound in their corner, but improving profits have also played their part.’

A total of 20 companies paid out special dividends in the period, a record number.  

5 comments so far. Why not have your say?

lance

Jul 18, 2017 at 16:57

i thought the nat grid special dividend was accompanied by a capital restructuring . So you may have received a special dividend but your shareholding was reduced...or have i got that wrong ?

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Paul Easthope

Jul 18, 2017 at 18:06

Correct Lance . Given in one hand and taken away with the other . So as shareholders we are no better off

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Spartacus

Jul 18, 2017 at 18:25

lance - you're correct :-)

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Mahendra Patel

Jul 19, 2017 at 14:16

LANCE

Correct.

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Mark Yu

Jul 23, 2017 at 12:13

it is even better if you hold foreign companies or companies who pay dividends in foreign currencies like euro or dollar. one example is Deutsch post, which increases dividend is euro meaning you got a double whammy increases when it comes into your bank account in £. and a triple whammy adding th capital appreciation, fast. Perhaps brexit is good after all if you own foreign assets, thus the likes of Murdoch, tory rights, desmond, dysons, etc etc.

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