“Eventually, it is important to face facts. We have already seen companies announce a slew of dividends cuts, many of which are still to filter through. This will protect companies from unaffordable outflows of cash. In an ideal world, investors would see dividend cover recover owing to a bounce-back in profits, rather than from cuts in the dividend.”
“With the outcome of the Referendum likely to hit profits of companies dependent on the UK economy, investors should expect cover to fall further or brace themselves for dividends to be cut; they should be cautious of companies that have a combination of a high yield, and a low cover,” Miah added.
