UK firms paid $33.7bn dividends in 2nd quarter

Dividends paid out by British companies rose 7.7% on a headline basis to $33.7 billion in the second quarter compared to the same period last year, according to the latest Henderson Global Dividend Index.

But that number was boosted by large special dividends from companies including GlaxoSmithKline and Intercontinental Hotels.

In underlying terms, UK dividends were 3.3% lower than last year’s second quarter as dividend cuts from Standard Chartered, Anglo American, Barclays and Morrison took their toll.

The Henderson report said profit growth remained under pressure in the UK, limiting the potential for firms to increase dividends.

Global dividends rose 2.3% on a headline basis in Q2 to $421.6 billion, but underlying growth was lower at 1.2% due in part to a more muted dividend performance by US firms after recent strong quarters.

Henderson said it expects the second half of 2016 to be weaker than the first half for dividends and that the UK and emerging markets will see dividends fall.

Henderson has reduced its dividends forecast by $20 billion since the first quarter of this year and now expects global dividends of $1.16 trillion for the whole of 2016, up 1.4% in underlying terms.