Dividend payouts slid in 2009... and 2010 is not looking great

Yorkshire's leading companies saw a better performance with a 12 per cent decline against the 15 per cent reduction in the wider market.

York-based housebuilder Persimmon was largely to blame for the fall in Yorkshire's top five company pay-outs as it struggled with the collapse in the housing market.

Excluding Persimmon, the other four top Yorkshire PLCs increased payouts by 16 per cent.

Drax, the region's second biggest PLC and owner of the coal-fired power station in North Yorkshire, offered Yorkshire's biggest dividend payout and was the 40th largest payer in the UK market in 2009.

Drax paid a final dividend of 38.3p in 2009, up from 9.9p in 2008.

Yorkshire's biggest company, Bradford-based supermarket chain Morrisons, was the 44th largest payer in the UK market.

Persimmon cut its dividend payout, but Yorkshire's fourth biggest PLC Bradford-based credit lender Provident Financial and its fifth biggest, Snaith-based natural chemicals company Croda International, both rewarded shareholders following a strong performance last year.

Yorkshire's top five PLCs paid out 459m in 2009, 12 per cent less than the 521m in 2008.

Capita Registrars said that 2010 is likely to show little dividend recovery.

In 2009 much of the fall was due to the woes in the banking sector. Banks cut their dividends by 6bn in total, while oil companies paid out an extra 3bn.

Investors were heavily dependent on five companies for their dividends and BP and Shell paid a quarter of all UK dividends.

But payouts are unlikely to grow strongly in 2010 due to headwinds for the oil sector and sluggish economic recovery.

UK companies paid out 56.9bn in dividends in 2009, down 15 per cent or a sizeable 10bn less than in 2008.

In total, 202 companies cut their dividends, and more than a third of these paid no dividend at all, some because they went into liquidation.

Of the others, 179 companies increased their payouts and 60 held them steady.

Banks slashed their dividends by half, paying out 6.1bn less to shareholders in 2009 than in 2008.

Paul Taylor, head of dividends at Capita Registrars said banking fortunes diverged widely.

The banks which sought taxpayer help paid nothing, while HSBC only modestly cut its dividend and Standard Chartered actually returned more cash to shareholders.

Drug companies paid a fifth more in dividends, while tobacco producers, electricity suppliers, and food retailers all grew their payments by at least a tenth.

Dividends from the high street collapsed, tumbling 62 per cent, while household goods stocks fell by almost two thirds.

Mr Taylor said: "The recession has hit dividends particularly hard because companies have not only had to cope with falling profits, but also massive pressure on their ability to finance themselves."

Retailers have suffered as consumers have deserted the high street and only the supermarkets have managed to keep dividends flowing as shoppers continue to stock up on groceries.

The appetite for drinks, tobacco and pharmaceuticals was likewise undiminished by the recession.

Almost half – 47 per cent – of all dividends were paid by BP, Shell, HSBC, Vodafone and Glaxosmithkline.

In 2007, these companies paid only a third of the total.

Capita Registrars estimates dividends in 2010 will total 59.6bn, a modest five per cent increase, despite an expected economic recovery.

This is due to weakness in oil dividends.

"The increasing dominance of the oil companies has left investors highly-dependent on a few big stocks to provide them with an income," said Mr Taylor. "But lower oil prices, tighter refining margins, slower production growth and unfavourable currency trends have put profitability under pressure at the big oil companies." Banks cut their dividends by 6bn in total, while oil companies paid out an extra 3bn.

Investors were heavily dependent on five companies for their dividends and BP and Shell paid a quarter of all UK dividends.

But payouts are unlikely to grow strongly in 2010 due to headwinds for the oil sector and sluggish economic recovery.

UK companies paid out 56.9bn in dividends in 2009, down 15 per cent or a sizeable 10bn less than in 2008.

In total, 202 companies cut their dividends, and more than a third of these paid no dividend at all, some because they went into liquidation.

Of the others, 179 companies increased their payouts and 60 held them steady.

Banks slashed their dividends by half, paying out 6.1bn less to shareholders in 2009 than in 2008.

Paul Taylor, head of dividends at Capita Registrars said banking fortunes diverged widely.

The banks which sought taxpayer help paid nothing, while HSBC only modestly cut its dividend and Standard Chartered actually returned more cash to shareholders.

Drug companies paid a fifth more in dividends, while tobacco producers, electricity suppliers, and food retailers all grew their payments by at least a tenth.

Dividends from the high street collapsed, tumbling 62 per cent, while household goods stocks fell by almost two thirds.

Mr Taylor said: “The recession has hit dividends particularly hard because companies have not only had to cope with falling profits, but also massive pressure on their ability to finance themselves.”

Retailers have suffered as consumers have deserted the high street and only the supermarkets have managed to keep dividends flowing as shoppers continue to stock up on groceries.

The appetite for drinks, tobacco and pharmaceuticals was likewise undiminished by the recession.

Almost half – 47 per cent – of all dividends were paid by BP, Shell, HSBC, Vodafone and Glaxosmithkline.

In 2007, these companies paid only a third of the total.

Capita Registrars estimates dividends in 2010 will total 59.6bn, a modest five per cent increase, despite an expected economic recovery.

This is due to weakness in oil dividends.

“The increasing dominance of the oil companies has left investors highly-dependent on a few big stocks to provide them with an income,” said Mr Taylor. “But lower oil prices, tighter refining margins, slower production growth and unfavourable currency trends have put profitability under pressure at the big oil companies.”