UK Dividend Growth

From the FT,

Dividend growth from London-listed companies is set to slow sharply in 2016 as the commodities sell-off hits payouts.

Total dividends paid by companies listed on the main market are set to grow by 3 per cent in 2016, down from a 6.8 per cent projected increase in 2015, says a report by Capita Asset Services.

“Profits are lower relative to dividends than at any time since 2009, and we have seen some of Britain’s biggest dividend payers announce drastic cuts for the year to come, with the prospect of more to follow,” said Justin Cooper, chief executive of Shareholder Solutions, part of Capita Asset Services.

“The top 100 in particular is struggling to make any headway.”

While the FTSE 100 has a high concentration of international mining stocks, it is also set to suffer from supermarket price wars that have prompted Tesco to cut its dividend and Sainsbury to adopt a more conservative policy.

The Capita report continues, “The collapse in their profitability in particular has meant dividend cuts are inevitable. Glencore is one such casualty but there will likely be others.” Worth noting.

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