After slashing payouts as the Covid crisis hit, companies are now bringing back their dividends.
Dividends from UK-listed firms jumped a 51.2 per cent to £25.7bn between March and June, according to the latest UK Dividend Monitor from Link Group.
This beat its expectations but the total payout remains a sixth below its pre-pandemic average levels.
Mining and banking accounted for two-thirds of the increase, according to the report, while the oil sector acted as a brake.
However, oil big guns Shell and BP are keen to lure investors back in with payouts and for those hunting income, the FTSE is making something of a return.
Covid recovery pays dividends for UK plc
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Dividends distributed by UK companies surged 51.2 per cent annually to reach £25.7bn in the second quarter of this year
UK plc has bounced back from the worst of the Covid crisis and is sharing the proceeds with investors, according to new figures released today.
Dividends distributed by UK companies surged 51.2 per cent annually to reach £25.7bn in the second quarter of this year, according to the latest UK Dividend Monitor from Link Group.
The sharp rise was mainly driven by companies restarting dividends as they repaired their balance sheets from the financial shock of the Covid crisis. 90 per cent of the year-on-year increase came from firms reinstating payments to shareholders.
Investors may have to wait until 2025 for a return to pre-pandemic levels
After a torrid year for those in UK equity income funds, investors will be buoyed by the news that in the first quarter of this year UK dividends fell at their slowest rate since the pandemic began.
According to the latest UK Dividend Monitor from Link Group, compared with the 48.2% collapse in underlying dividends in the second quarter of 2020, payments in Q1 2021 fell by 26.7% to £12.7bn ($17.6bn, €14.6bn) which is the slowest rate of decline in the last 12 months.
To put this into context, according to Link Group over the last 12 months the pandemic has caused a 41.6% fall in dividends, with cuts totalling £44.8bn as some two-thirds of companies were forced to made reductions.
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Dividends from Britain’s listed companies will take at least four years to recover to pre-pandemic levels, according to a report that described last year’s payout reductions as the worst since the