UK firms falling behind Europe on divi payouts
WEAK British firms failed to cash in on the global recovery in the second quarter, with dividends rising at well below the average rate across the world, Henderson Global Investors said today.
UK businesses paid dividends of $33.7bn in the second quarter, up 9.7 per cent on the year.
That was largely down to the rising strength of sterling improving the figure in dollars, rather than any improvement in payouts in the domestic currency.
By contrast, Europe’s biggest firms increased their dividend payouts more quickly than businesses in any other region, in a surprise indication of growth.
But the dividends are still relatively small, as profits in the region are weaker than those elsewhere in the world.
Excluding UK-listed firms, European businesses paid out $153.4bn (£91.9bn) in the second quarter of 2014 – a jump of 18.2 per cent on the year.
“2014 looks set to deliver the fastest growth in global dividends since 2011, only this time, most of that growth will come from increases in pay-outs from firms themselves, rather than from swings in currencies,” said Alex Crooke, head of global equity income at Henderson.
“It’s especially encouraging to see Europe and Japan delivering big increases to their shareholders, after lagging behind the rest of the world recently.”
Japanese companies registered even faster growth than European firms – 18.5 per cent – but to a far lower level, at $25.2bn.
North American dividends were next, growing 11.8 per cent to $98.5bn.
Businesses in Asia Pacific paid out $38.5bn, up 10.7 per cent on the year.
And emerging markets’ dividends fell 14.6 per cent to $29.4bn.
Global dividends came in at $378.7bn, up 11.7 per cent.