Special payments mask weaker set of dividend figures

Firms paid a record £18.8 billion in dividends over the first three months of 2012, a jump of 25 per cent on a year earlier.

But rather than highlighting a shareholder bonanza, the latest Dividend Monitor from Capita Registrars, released today, said special payments of £2.2 billion by Cairn Energy and Vodafone masked a weaker-than-expected performance.

Adjusting for the one-off factors, underlying growth was 6.6 per cent higher than a year ago in the first quarter, much slower than the 12.8 per cent increase in 2011 and below Capita’s forecast growth rate for this year.

The FTSE 250 Index showed the greatest weakness as payouts by firms in the second tier market fell 9 per cent year-on-year to £915 million, the first quarterly decline since 2009.

Cable & Wireless Worldwide slashed its payout – costing £24m – and there has been more general caution among mid-cap stocks about paying dividends.

Capita Registrars chief executive Charles Cryer said the year will still be a record one for dividend growth.