View more on these topics

Dividends reach record levels despite profit pressure

Payment-Fine-Currency-Money-700.jpgDividends at UK companies reached record levels in the second quarter, but experts are warning that the real picture may not be as rosy as some shareholders think.

UK dividends rose 14.5 per cent to an all-time high of £37.8bn in the second quarter, beating the previous record in 2017 by £4.4bn, according to Link Group’s latest UK Dividend Monitor.

However, underlying growth came in below expectations at 5 per cent, as a weak pound and a number of exceptionally large special dividends helped boost the headline statistics. Exchange rate gains made up almost half the increase.

“The quality of growth was…relatively poor”, Link notes, describing the above factors as a “temporary boost”.

On the back of the data, Link has downgraded its forecast for underlying dividends by £500m to £98.7bn for 2019.

Excluding volatile special dividends, underlying growth is set to be 2.9 per cent.

Link chief operating officer Michael Kempe says: “Investors are being dazzled by eye-catching specials and exchange-rate trimmings, but the UK’s dividend clothes are starting to look a bit threadbare underneath.

“As the world economy slows, and a looming Brexit exacerbates the underperformance of the UK economy, corporate profits are under pressure and that is limiting the scope for dividend growth. Q2 marks both the second upgrade this year to our headline forecast and the second downgrade to our underlying one. The true picture for dividends this year is therefore notably weaker than a first glance might suggest.”

Recommended

Exit-Man-Door-Depart-Leave-700.jpg
2

UK investors draw a blank on investment exit strategies

A quarter of investors in the UK are unsure of how to liquidate the  investments they hold, figure show. Property investment company Experience Invest found 32 per cent of respondents to a survey said they have tried to exit an investment, but ultimately did not after learning they would incur unexpected fees for doing so. […]

21

SJP in firing line over charges again

St James’s Place has been criticised again over its charges, as new research suggests fees could erode almost half of the returns made by clients. Someone investing a typical £1m pot for 20 years could pay nearly the same amount in charges over the period, according to Candid Financial Advice, which was commissioned by the […]

Multi asset monthly views video

Trevor Greetham, Head of Multi Asset, shares his latest update on the positioning of our Global Multi Asset Portfolios (GMAPs), as we fast approach the longest business cycle expansion in US history. At this late stage of the cycle, Trevor sees a fairly balanced picture, highlighting both positives and negatives. Watch the video Past performance […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com