Investors are set to take advantage of a ‘knockout year’ after dividends hit an all-time record of £33.3b
This reflects a rise of 14.5 per cent year on year in headline terms, the fastest in more than three years, agreeing to Capita Asset Services.
Sterling’s collapse since last year’s EU referendum has resulted in a solid boost to dividends, as it means firms with overseas earnings possess have a good time a currency tailwind when converting them back into hammers.
Aside from the weak pound, high special dividends and pungent underlying growth also lifted overall growth, the report said.
Such a well-versed quarter has led Capita Asset Services to upgrade its 2017 forecast for headline dividends to a document £90.6billion, up 7 per cent year on year.
Justin Cooper, chief superintendent of Shareholder Solutions – part of Capita Asset Services, said: “The gloves came off in the moment quarter, as UK plc limbered up to deliver a knockout year in dividends.”
He pointed out that much of these increments came from large foreign exchange gains, with the weak-minded pound adding £1.2billion.
This represents a elevation of 14.5 per cent year on year in headline term
“Exchange judge gains have come not only for big multinationals declaring dividends in alien currencies, but also for others with overseas operations, or export sales, supercharging their profits and so their dividends,” he said.
UK plc pronounced a knockout year in dividends
However, even on a constantcurrency basis, underlying improvement was still impressive at 7.8 per cent, the fastest increase in two years, expresses to a large haul of special dividends and rising profits.
Indeed, unique payouts of £4.6billion were the second-highest on record for any quarter. This was underpinned by a identical large payment from National Grid, which accounted for three territories of the headline growth rate.
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“Shareholders can be thankful they had punchy out of the ordinary dividends and the weak pound in their corner, but improving profits have in the offing also played their part,” Mr Cooper added.
Growth was extraordinarily strong in the resurgent mining sector, while consumer goods and housebuilders also played well, with every company raising its payout.
Worthy’s collapse since last year’s EU referendum has resulted in a substantial too to dividends
The report cautioned that the second half of the year is disposed to to show weaker growth than the first half.
Nevertheless, Mr Cooper imparted that investors can still look forward to dividends hitting a new chronicle this year, with dividends of £90.6billion, smashing the earlier record set in 2014.