London-listed companies returned a record amount of cash to their shareholders in the second quarter, according to financial services company Computershare.
Payouts rose by 11.2%, year-on-year, to a record quarterly high of £36.7bn.
The figure was boosted by special dividends. The largest of which came from HSBC, which distributed the proceeds from the disposal of its Canadian business.
The underlying growth rate, which strips out these one-offs, was just 1%, but regular payouts still reached a new peak of £32.5bn. A second consecutive year of cuts from mining companies, which totalled £2bn in the second quarter, reduced the sector’s payout by a third, compared to the same period in 2023.
For the remainder of this year, the payouts from miners are likely to fall even further following a steeper-than-expected cut announced by Glencore for the third quarter.
The ‘mining effect’ means that Computershare has reduced its forecast of underlying growth this year to just 0.1%, down from 1.5% three months ago. This translates into total regular dividends of £88.2bn.
If miners are excluded, the forecast would show double-digit underlying growth this year.
And excluding the volatile mining sector, the underlying increase in dividends was 8.6% in the three months to the end of June, with 16 out 21 sectors recommending higher dividend payments.
At a company level, the median or typical growth rate in the per-share dividend was 5.4%.
Banks made by far the largest positive impact on dividends, distributing £1.1bn more in regular payments compared to the second quarter of last year, as high interest rates continue to support profit margins.
As a result, banks are on track to return a record amount of cash to investors this year.
The healthcare sector, where payments are up by a quarter, made the second largest contribution, primarily as a result of strong profit performance at Haleon and GSK.
Insurance, property, industrials and food retail were among the mix of sectors showing good growth. High oil prices continued to support modestly rising dividends from the major oil companies.
The weakest sector was housebuilding, with lower dividends mirroring the tough housing industry and residential sales markets.
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