Underlying UK dividend payments reached £15.3bn in the first three months of 2017, the highest first-quarter figure on record, new data has shown.
A year-on-year growth rate of 16.2 per cent, fuelled by the weaker pound and a higher payout from BHP Billiton, helped offset a marked decline in special dividends, according to the Capita Asset Services dividend monitor.
Special payouts fell 90 per cent to just £110m, the lowest quarterly figure in almost six years. “After the huge haul of specials in 2016, a normalisation this year was on the cards,” the forecaster said.
The fall in the value of the pound added 12 percentage points to the underlying figure, it added, with BHP’s payout adding a further 3.5 per cent.
The top 100 names by dividend payment benefited “disproportionately” from exchange rate gains, reflecting the global nature of their operations.
Mid-cap shares still managed an 11 per cent underlying growth rate despite the lack of a tail-wind from currency movements.
For 2017 as a whole, underlying payout growth is expected to again offset a continued fall in special dividends. But Capita warned that its headline forecast of a 2.8 per cent rise was partially dependent on sterling weakness, suggesting that a sustained increase in the value of the UK currency could yet see payout growth turn negative.
