Unlike 2011, there were almost no special dividends from stocks outside the FTSE 100 during 2012, just £47m, compared with £382m in the previous year. One or two companies have become such habitual special dividend payers that it is hard to consider them truly exceptional payments. Antofagasta and Hargreaves Lansdown stand out.
The perennial payers most likely wish to show consistent progress in their regular dividends, returning extra profits with a ‘special’ label attached.
In most cases, the names do not recur every year, but, there will always be a certain level of special payments, as companies return capital that might be considered exceptional; disposals or restructuring are the most common sources of such payments. ‘True’ dividends might be better thought of as resulting from the regular operations of a company.
The ex-special growth in UK dividends in 2012 was 10.6 per cent – a total of £73.6bn this year compared with £66.5bn in 2011. The second half growth rate was weaker than the first half, at 9.1 per cent compared with 12.2 per cent. The fourth-quarter growth rate was 8.9 per cent.
However, if we adjust both for special dividends and for the early payment of the HSBC distribution, growth for the full year 2012 was 8.9 per cent, 5.7 per cent for the second half, but for the fourth quarter the total payout was actually down 0.2 per cent, worse than expected.
Justin Cooper is chief executive of Capita Registrars
