* Payouts on course for record real term total in 2012
* Firms baulk at capital projects, dealmaking
* Q3 results less distorted by special payments
By Alistair Smout
LONDON, Oct 22 UK firms handed out record
dividends in the last quarter and are on track for annual
all-time high payouts as they look to keep investors sweet in
the face of faltering earnings growth, Capita Registrars said.
The third-quarter payout of 23.3 billion pounds ($37.59
billion), up 10.2 percent year-on-year, was the largest ever in
nominal terms. In real terms, it was the highest since 2008.
"The volume of cash being distributed by UK companies is
unprecedented," said Charles Cryer, Chief Executive of Capita
"Given the lack of high yielding alternatives, investors can
be hugely relieved that equities are providing a decent income,"
he said, while acknowledging dividends could not continue to
grow rapidly against the slower global economic backdrop.
Dividends of 64.6 billion pounds so far this year also
represent a record and are already ahead of annual payouts in
2007, 2009 and 2010.
The estimated 78.6 billion pound payout for the whole of
2012 would be a record, even accounting for inflation.
The payouts come amid weak economic growth in developed
markets and slowing growth elsewhere and illustrate a reluctance
among firms to invest in big capital projects or acquisitions.
Those firms more exposed to the economic cycle, so-called
cyclicals, saw dividends grow three times as fast as more
defensive sectors, the report showed, led by basic industrials
with a 172-percent increase year-on-year.
Only the technology sector, down 15 percent, posted a fall.
The third-quarter growth rate was the slowest since BP
cancelled its payout in the last quarter of 2010 but was
the seventh consecutive quarter of payout rises.
Payouts in the third quarter were less distorted by special
dividends than earlier in the year, with one-offs accounting for
only 432 million pounds, the report said.
Special dividends have totalled 6.4 billion pounds for the
year so far, 800 million pounds more than the combined totals of
2008-2010 inclusive, and well over double the amount paid out in
the first three quarters of 2011, which was already a record.