Aim dividends performed better than those from the main market throughout the pandemic and began rebounding in the second quarter of 2021, the latest data from Link Group’s Aim Dividend Monitor has found.
Between April 2020 and March 2021, the first four quarters of the pandemic, Aim payouts fell 40.4%, slightly better than the 41.6% decline on the market.
Although Aim dividends fell back to a level last seen in 2016, wider market payouts declined to 2011 levels, Link Group found.
Overall, two-thirds of Aim companies that usually pay a dividend cut or cancelled their dividends during the pandemic, which was no worse than the dividend cuts seen on the main market.
Having remained relatively resilient throughout the pandemic, Aim dividends saw a rebound in the second quarter of 2021, with underlying dividends, excluding one-off special dividends, soaring 56.6% to £265m.
Link Group recorded the rebound in underlying Aim dividends as more than twice as strong as the main market in the first half of 2021.
The firm said the second half of 2021 was likely to see a slower growth rate than in Q2, with Aim dividends likely to rise 32.3% for the full year 2021 on a headline basis to a total of £1,076m, restoring Aim’s payments back to a level last reached in late 2018.
Link Group managing director of corporate markets EMEA Ian Stokes said: “Aim companies are more vulnerable to economic disruption than their multi-national counterparts. They are less diversified and have more limited access to funding so they must move quickly to preserve cash to ensure they can ride out a brewing storm.
“The pandemic has certainly been stormy, but despite the worst recession in two centuries, Aim companies have come through in good shape. They have been eager to restart dividends and the recovery has been blisteringly fast so far.”
He added: ”Even though relatively few Aim companies habitually pay dividends, those that do tend to grow them faster than the main market. We are confident Aim’s dividends can regain their previous highs by some time in 2023, almost two years sooner than our expectation for the main market.”
