Investors in UK companies received “unprecedented” dividends in the third quarter as cash-rich companies handed back funds sitting unused on their balance sheets, a new report has found.
Total payouts reached £23.2 billion in the three months to 30 September, a headline increase of 10.4 per cent against a year ago, according to the latest dividend monitor from Capita.
The report said that 226 companies paid a dividend in the third quarter, down from 228 in the same period last year.
Among these, 173 increased, started or reinstated their payments, 36 cut or cancelled them, while 11 kept them the same.
For the first nine months of the year, the total payout reached £64.6bn, a headline increase of 17.1 per cent, meaning that investors received more in the first three quarters of this year than they did in each of the full years 2007, 2009 and 2010. However, despite the size of the payout, 10.4 per cent was the slowest quarterly growth rate since the final months of 2010.
But Capita warned that a preponderance of “special” one-off dividends in 2012 and the slowdown in economic growth means 2013 is not expected to be a bumper year for investors looking for dividends.
Capita said it expects companies to pay out £81bn, a mere 3 per cent increase on 2012, adding that this does not include potential special dividends. Charles Cryer, chief executive of Capita Shareholder Services, said: “The volume of cash being distributed by UK companies is unprecedented. The total for 2012 will be almost one-sixth higher than last year’s record £68bn. Given the lack of high-yielding alternatives, investors can be relieved that equities are providing a decent income.”