Investors see dividend payouts tumble

UK companies paid out 56.9bn in dividends in 2009 – 15 per cent less than in 2008 – with investors in the banking sector the worst impacted as the financial crisis wrought havoc, according to Capita Registrars.

Bank shareholders alone saw their payouts cut by 6bn.

Capita's Dividend Monitor also warned dividends were unlikely to bounce back this year, forecasting at best 5 per cent growth to 59.6bn – spelling more bad news for pensions funds as well as private investors that rely on dividend payouts.

The report comes just a week after oil giants BP and Royal Dutch Shell, which together account for around 25 per cent of all dividends paid by UK companies, froze dividends in dollar terms, meaning that payments in sterling would be reduced.

Capita found that a total of 202 listed firms cut their dividends in 2009, 74 of which made no payout at all.

There were 179 companies that increased payouts, while 60 held dividends at the same rate.

Part-nationalised banks paid nothing to shareholders last year, the report added.

It also revealed that shareholders were tapped for more cash than they were paid in dividends as firms launched rights issues and capital raisings to shore-up their balance sheets.

Capita said 73bn was paid out by shareholders for new equity – 16bn more than was received in dividends.