Record £68bn divi bonanza lifts gloom

Shareholder payouts by UK companies hit new heights last year, climbing for the first time since 2008.

The latest Dividend Monitor from Capita Registrars shows that dividends climbed to a record £67.8bn in 2011, up almost a fifth over the previous year. In the last quarter of the year, total gross dividends soared 26 per cent against the same period in 2010.

Charles Cryer, chief executive officer at Capita Registrars, said: "Record dividends are providing a real bright spot for investors against a very gloomy backdrop of crisis in the eurozone and a stalling economic recovery in the UK."

However, the Monitor – using figures compiled by Exchange Data – was flattered by distorting factors during 2011. The biggest was the return of BP to paying dividends, after it had scrapped them in 2010 following the Gulf of Mexico oil spill. The oil giant paid out £1.8bn more to shareholders in 2011 than in 2010.

There was also an exceptionally large value of special dividends, led by the £1.6bn payment from International Power, and £600m from Antofagasta. In total 19 companies paid special dividends in 2011, boosting the amount to £2.9bn last year, £2.2bn more than 2010. Just 13 firms paid special dividends in 2010.

"Special dividends have been the icing on the cake for 2011, and look likely to sweeten investors' returns again in the coming year," said Mr Cryer.

Some 438 companies paid a dividend last year, against 434 in 2010. But 373 increased, started or reinstated dividends compared to only 90 who cut or cancelled them.The positive outlook for shareholder payouts will continue through 2012, Mr Cryer said, forecasting dividends of £75bn, a further increase of 11 per cent. A special dividend from Vodafone next month is expected to help the mobile giant supplant Shell as the UK's top payer. The oil major handed out £6.7bn last year.