Monday 16 September 2019

Bumper payouts from miners set investors up for record dividends haul

Investors saw payments rise 14% over the three-month period, with two-thirds of the jump coming from the London-listed miners.

Wealth inequality
Wealth inequality

By Ben Woods, Press Association Chief City Correspondent

Shareholders are on track for a record payout this year after dividends leapt to an all-time high of £28.5 billion in the third quarter, according to new research.

Investors saw payments rise 14% over the three-month period, with two thirds of the jump coming from the London-listed miners, a report by Capita Asset Services revealed.

The results from Dividend Monitor showed shareholders’ dividends were “comfortably on track to smash the previous annual record set in 2014”.

Justin Cooper, chief executive of Shareholder Solutions – part of Capita Asset Services – said: “We had high hopes for 2017, but the dividend seam is proving even richer than we expected, as the mining sector finds its footing again.

“Investors have struck gold as this year’s haul easily smashes the previous record set in 2014.

“Generous payouts have been topped up by big exchange rate gains between January and June and very large special dividends, setting 2017 up to be a sparkling year.

“The lustre will dim markedly in the fourth quarter, however, as the potential for further upside surprise has diminished.”

Stripping out special dividends, investor payments lifted 13% to a record £27 billion during the third quarter.

Special dividends also picked up by 40% to £1.5 billion over the period.

Capita Asset Services said bumper payouts from the mining sector had forced the firm to tweak its full-year forecasts by more than £3 billion, with headline dividends now expected to rise by 11% to £94 billion for the year.

Mr Cooper added: “Exchange rate gains will be gone in 2018, unless the pound takes another jolt downwards as the Brexit talks unfold, and most of the big companies who cancelled dividends in recent years have already restarted them, so that additional sparkle will have dulled.

“Even so, the overall value distributed by UK plc is likely to remain at or near 2017’s record levels.”

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