According to Capita Asset Services’ UK dividend monitor, the unprecedented £16.6bn special payout following Vodafone’s deal with Verizon will help push dividends for next year past the £80.6bn record, which was set in 2012.
However third quarter payouts, which are typically the largest of the year, failed to top the dividends distributed during quarter two for the first time since 2008.
According to Capita’s figures, between July and September some £25.3bn was paid out to investors, which was £60.5m less than in quarter two. On an underlying basis, dividend growth also slowed and dropped to 6.2% from 7.7% in the first half.
Strong 2014
However Justin Cooper, chief executive officer of shareholder solutions at Capita, said that for some time the share registration firm had been warning of a slowdown in dividend growth, but because of the sizable Vodafone distribution, its 2014 predictions were not just achievable but look unlikely to be beaten until 2017.
“Next year will be very special indeed,” Cooper said. “The Vodafone effect is so huge that at a headline level of £101.8bn, it is likely to be 2017 before investors see total dividends of this magnitude from UK plc again.”
Cooper added: “That one payment will affect behaviour across the market, including influencing the timing of new IPOs as companies seek to float shortly after the special dividend payout, when Vodafone cash will be burning a hole in investors’ pockets”
