London-listed firms dish out £12bn in dividends in three months

British savers and pensioners received a boost to their nest eggs after the value of dividends paid rose in the first three months of the year.

London-listed firms dished out £12billion to investors between January and March.

This was a rise of seven per cent on the first quarter of 2023 and was the highest amount since 2021.

At that time companies were racing to hand cash to shareholders after cutting dividends during the height of the pandemic.

The UK’s performance so far in 2024 has also far outstripped the rest of Europe – where dividends fell by a fifth to £39billion.

Even stripping out one-off payouts and seasonal factors, as fewer Continental firms arrange payouts early in the year, the UK still beat the rest of Europe.

The increase will be a boost to London’s reputation as it underlines that ordinary Britons can still make a regular income from the stock market.

The London Stock Exchange has been hit over the last couple of years by a lack of public listings as well as an exodus of some London-listed firms overseas.

The headline total in the UK was helped by one-off payments including a special dividend from Primark-owner Associated British Foods after strong trading.

The biggest increase came from catering business Compass as it continues to recover after the Covid pandemic.

The figures come at a time when Britain is bouncing back from recession, with the strongest GDP growth – jointly with Canada – across the G7 group of advanced economies in the first quarter.

Europe, meanwhile, has been struggling, held back by the woes of manufacturers in Germany, its biggest economy.

However, London pay-outs were still outpaced by Wall Street.

Dividends across the Pond climbed by 7.5 per cent compared to a year ago – a statistic that will do little to diminish the glittering allure of the New York market for investors.

Globally, it was a record quarter for first quarter dividends as they hit £267billion, the Janus Henderson analysis found. 

The asset manager’s study found that nearly half of that was represented by the US, where they totalled £129billion. 

This was helped by a first ever dividend from social media giant Meta, the company behind WhatsApp, Instagram and Facebook.

Jane Shoemake, client portfolio manager on Janus Henderson’s global equity income team, said: ‘Investors have enjoyed a strong start to 2024, with share process rising globally and dividend growth continuing to show the strong underlying momentum reached towards the end of 2023.’

Andrew Jones, a UK portfolio manager at Janus Henderson, said that despite outpacing Europe, UK dividend growth had been ‘relatively pedestrian’ in the first quarter.

But he added: ‘We do expect the situation to improve through the second half of the year as cost pressures ease, interest rates are cut, and the economy starts to recover, driven by real wage growth and a more buoyant consumer.’