Bloomberg News

U.K. Dividends Increase to Record in 2011 as BP Resumes Payments

January 31, 2012

Jan. 23 (Bloomberg) -- Dividends in the U.K. increased to a record 67.8 billion pounds ($105.6 billion) in 2011, surpassing their previous high in 2008, as BP Plc resumed payments and mining companies boosted theirs.

Payouts by British companies to shareholders climbed for the first full year since 2008 as dividends advanced in all four quarters, increasing 19 percent from 2010 to set a nominal payout record, Capita Registrars said in an e-mailed statement today, citing data from Exchange Data International.

BP Plc paid 3.6 billion pounds in 2011 as Europe’s second- biggest oil producer resumed its dividends. The international oil company paid out 1.8 billion pounds more last year than it did in 2010, accounting for one-sixth of the total increase in dividend payments by U.K. companies, Capita said. BP canceled its payouts in 2010 after the blowout of its Macondo well in the Gulf of Mexico led to the world’s largest accidental oil spill.

“Record dividends are providing a real bright spot for investors against a very gloomy backdrop of crisis in the euro zone and a stalling economic recovery in the U.K.,” Charles Cryer, chief executive officer of Capita Registrars, said in a statement. “Expanding dividends mean the yield on equities looks remarkably attractive at present, although there are clearly risks to capital in holding shares.”

Shell, Vodafone

Royal Dutch Shell Plc retained its position as the largest payer of dividends, distributing 6.7 billion pounds in 2011, one-tenth of all payments. Capita predicted that mobile-phone operator Vodafone Group Plc will overtake Shell in 2012, paying out 7 billion pounds including a 2 billion-pound special dividend next month.

Mining companies boosted their payouts by 88 percent to 4.8 billion pounds last year as Antofagasta Plc, the copper producer controlled by Chile’s Luksic family, and Fresnillo Plc made special dividends. Anglo American Plc, which runs six projects in Chile, made a full year of dividend payments in 2011, compared with one payout in 2010.

Gas, water and utility companies increased their payments by 97 percent to 4.4 billion pounds as International Power Plc made an extraordinary payment of 1.6 billion pounds.

Capita forecast that U.K. dividends will climb to 75 billion pounds in 2012, giving the benchmark FTSE 100 Index a dividend yield of 4.5 percent.

Novartis AG, SAP AG and Ericsson AB are among 13 companies in the Stoxx Europe 600 Index that may increase their dividends this week, while Nokia Oyj and Banco de Sabadell SA may decrease their payouts, according to data compiled by Bloomberg.

--Editor: Will Hadfield

To contact the reporter on this story: Peter Levring in Copenhagen at plevring1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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