UK Q3 dividends break quarterly records

Miners and financial firms helped drive UK dividends to record highs for the third quarter, according to the latest UK Dividend Monitor from Link Asset Services.

Total dividends climbed by 4.1 per cent to £32.3 billion at headline level, reaching a third-quarter record.

Underlying payouts, which exclude special dividends, rose 6.9 per cent year-on-year to £31.6bn, to set an all-time quarterly record.

Figures were helped by a strong showing from financial firms such as Barclays, which raised its interim payout by 150 per cent, and mining companies, which overtook the oil sector to become the quarter’s largest players.

The weaker pound provided a boost, as dividends declared in dollars or euros exchanged at more favourable rates.

However, the retail sector struggled as high street difficulties squeezed profits, leaving dividends flat or with modest increases.

Link upgraded its 2018 forecast for headline dividends to a record £99.5bn, up by £1.1bn.

Justin Cooper, chief executive of Link Market Services, said: “Commodity prices have recovered some of their poise after trade war-induced wobbles, but the easy profit gains from higher prices have passed for now and earnings are beginning to disappoint analysts.

“The banks, by contrast, have for the most part finally slipped the noose of regulatory fines and shucked off the burden of lengthy restructurings. With interest margins now improving, they have headroom to pay their shareholders more in dividends.” 0 Link Market Services chief Justin Cooper