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Market Tracker’s latest Trend Report, Dividends 2019, gives an update on market practice across the FTSE 350 regarding the payment of dividends. This report, which includes expert contributions and commentary from Martin Webster, Partner at Pinsent Masons LLP, Jonathan Beastall, Senior Adviser at Pinsent Masons LLP and The Investment Association, follows the Government’s to its consultation on Insolvency and Corporate Governance which highlighted its concerns about how some companies are going about paying dividends. In particular, the Government was concerned about how companies pay dividends even when in financial distress, and that some companies avoid an annual shareholder vote on dividends by only paying interim dividends.

The Government has asked the Investment Association to report on the prevalence of the certain dividend payment practices, including the practice of paying interim dividends only. The results of this report are yet to be announced, but this Market Tracker Trend Report includes an interview with the Investment Association in which it gave details about the lead-up to the research, the scope of the report, some of its research methods and an update on its forthcoming publication.

Due to the Government’s stated concerns and the Investment Association’s ongoing research into dividends, LexisPSL Corporate took a fresh look at the statistics on FTSE 350 dividend payment practices in this report. Key highlights from the report include:

• 78% of companies paid a final dividend, either on its own (8%) or in combination with interim or special dividends (70%)
• 83% of companies paid at least one interim dividend
• 9% of companies paid no dividends
• 8 FTSE 350 companies adopted the unusual practice of authorising their directors to pay final dividends without going to shareholders for approval
• 45 companies paid interim or special dividends only, but not all of them did not go to shareholders for approval; 13 of the 45 proposed resolutions at the AGM to approve the interim dividend or the company’s dividend policy.

Click here to download the report.