Treasury cheer as dividends rise for first time in a year

Dividends are growing for the first time in more than a year, Capita Registrars will reveal today. The 1.6 per cent rise in the third quarter of 2010 follows five consecutive quarters of decline, the firm's dividend monitor has found.

The strong showing prompted it to upgrade its forecast for the total payout for the year by £1bn, though the £55.7bn now expected is still 5 per cent lower than the 2009 payout and 17 per cent lower than its the 2008 peak. But Capita will say that had BP not been forced to cancel its payment as a result of the Gulf of Mexico oil spill, dividends would have actually risen by 4 per cent this year, making the total payment flat in real terms.

Excluding the BP effect, dividend payments in the third quarter of this year grew by 13 per cent, the fastest pace since the first quarter of 2008. This suggests the corporate sector is in better health than some experts have feared. The Coalition desperately needs this to be translated into jobs growth as it prepares to lose 500,000 public-sector workers following last week's bruising package of public spending cuts.

In the third quarter of the year, UK listed companies paid out £17.6bn, up from £17.3bn in 2009. In the year to date, dividends have totalled £46.1bn, compared with £47.8bn for the first nine months of 2009.

The monitor will also say the underlying picture is more positive. About 200 companies paid a dividend in the third quarter, about the same as last year. However, the number was reduced as some firms who brought forward their third-quarter payouts to get them into the 2009-10 tax year and beat the new 50 per cent top rate of tax.

Despite this, the number of companies increasing, starting, or reinstating payments to shareholders still outnumbered those who cut or cancelled their dividends by 3.1 to 1. Mid-cap companies appear to be doing much better than their larger counterparts, with the FTSE 250 increasing its distributions to investors by 33 per cent in quarter three, compared to the same period last year, distributing £1.4bn. By contrast, the FTSE 100, actually cut them by 1.7 per cent to £15.7bn.

Those figures are not adjusted for BP and other one offs, however, including the £280m special dividend from Heritage Oil which accounted for a fifth of the FTSE 250's total.

Charles Cryer, the chief executive of Capita Registrars, said: "Seeing corporate UK in better health will give the Treasury some cheer that the economy can withstand the cuts."

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones