British corporate dividends hit a record total in the second quarter of 2013, although underlying growth is slowing compared to previous predictions, a study has shown.
Second quarter payouts by UK firms hit £25.3 billion, the largest ever quarterly total, with media, financial services and food producers all exhibiting double-digit growth, research by Capita Registrars showed.
Although underlying dividend growth accelerated by 9.5%, its fastest in a year, it was not enough for Capita to maintain its full year target, reducing it to 7.7% growth from 8.6%, a £500 million reduction.
"A record quarter is well worth cheering, and Q2's 25bn total is a staggering amount. It is however part of a wider picture that is seeing the pace of dividend growth slow down as we warned earlier this year, following a profit squeeze on UK firms," Justin Cooper, chief executive of Capita Registrars said.
"Dividends are not falling, they are merely growing more slowly, but slow enough for us to further trim our underlying forecast for the year."
Special dividends came in stronger than Capita expected, at £1.2 billion in the second quarter due to Antofagasta , Standard Life and cash rich ITV, although still down on last year's quarterly figure of £1.5 billion.
Capita forecasts a total dividend payout of £81.4 billion for 2013, with the changes to underlying and special dividends taken into account.
This is a 1.1% year-on-year rise compared to 2012, the slowest headline and underlying growth rate in three years. But at the end of the first quarter Capita had said that year-on-year growth would be flat.
