A RECORD £33.3 million was paid out in dividends in the second quarter of 2017, up 14.5 per cent on the same period last year.

The performance was strong enough that Capita Asset Services, which reported the figures in its latest Dividend Monitor, upgraded its 2017 forecast for headline dividends to a record £90.6bn, up seven per cent year-on-year.

Special payouts of £4.6bn were the second-highest on record for any quarter, owing mainly to a £3.2bn payment from National Grid on the sale of its 61 per cent stake in its UK gas distribution business. In total, 20 companies paid specials in the period, the second-highest number in any quarter on record.

Loading article content

On a constant-currency basis, underlying growth was 7.8 per cent, the fastest increase in two years.

Growth was particularly strong in the mining sector, where every company raised payouts, though Glencore and Rio Tinto made an especially large contribution to growth. In the consumer goods and housebuilder grouping, again every company increased its payout.

Financials grew its dividends, but more slowly than the average, in spite of a major pay out by Lloyds Bank. However, there was a year-on-year decline in insurance company dividends.

The underlying figure for Q2, which excludes special dividends, was up 12.6 per cent, boosted by the weakness in sterling, which accounted for £1.2bn of the total.

But the elimination of exchange-rate effects would likely lead to a quieter second half.

Justin Cooper, chief executive of Shareholder Solutions, part of Capita Asset Services, said: “As we move towards 2018, the extent to which the weakening UK economy continues to diverge from improving trends elsewhere in the world will determine which companies are still able to deliver strong dividend growth.”