UK Dividend Monitor Q1 2018

March 2018 / Link Group

UK dividends inch ahead in Q1 as stronger sterling masks growth

Our latest UK Dividend Monitor reveals that:

  • Q1 marks a seasonal low for dividends, but sets the tone for a year of more moderate growth
  • Payouts rose sharply, up 7.6% to a headline £16.7bn. This figure was flattered by British American Tobacco (BAT), which switched to quarterly payouts as part of its absorption of US tobacco firm Reynolds
  • First quarter dividends rose just 1.2% once one-offs were taken into account
  • The stronger pound pushed down the sterling value of US dollar payouts, in which more than two-fifths of Q1 dividends were paid. But on a constant-currency basis, growth in UK dividends was much more encouraging.
  • The Link Asset Services UK Dividend Monitor is a quarterly publication providing comprehensive data, trends and analysis on dividends paid out on the ordinary shares of companies listed on the UK Main Market.


  • Almost a quarter of the Q1 total was paid by the oil majors, Shell and BP. Higher oil prices have not yet led to higher payouts from these companies, who had maintained their dividends through the oil slump.
  • One sixth of Q1 dividends were distributed by the health care sector, dominated by AstraZeneca and GlaxoSmithKline.
  • Consumer goods and housebuilder group's dividends more than doubled year-on-year, with most of its constituents raising their dividends.

FTSE 100 v FTSE 250

Top 100 payouts jumped 9.2% year-on-year to £15.0bn, pushed higher in particular by the British American Tobacco (BAT) timing change, the Sky special and the Evraz and Persimmon payouts.

By contrast, mid-cap dividends fell 10.8%, mainly owing to some sizeable takeovers which led to delayed dividend payouts.


  • Newly enlarged BAT, following its US acquisition is paying larger dividends, and the mining recovery continues more strongly
  • But the larger fx penalty of the stronger pound against the dollar will offset this increase in sterling terms
  • Our underlying growth forecast in sterling (which excludes special dividends), is therefore unchanged at £90.4bn, an increase of 2.9% compared to 2017.
  • We forecast total UK dividends to reach £96.3bn, an increase of 1.8%, a record high despite steadier annual growth.

With grateful thanks to Exchange Data International for providing the raw data

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