Shortly after the UK’s first national lockdown began, an initial trickle of dividend reductions quickly became an unprecedented flood of cuts and cancellations. The final tally shows that dividends fell 41.6% on an underlying basis in the 12 months to the end of March 2021.
The biggest impact was felt immediately in Q2 2020, as companies scrambled to preserve cash to see them through the economic stoppages sweeping the world. In each successive quarter, however, the reductions became smaller as companies reassessed the situation and those least affected began to restore suspended payouts. Over the whole 12 months, two-thirds of companies reduced or pulled their dividends, and every sector saw firms cut. But the impact was extraordinarily varied. For example, all the banks and nine-tenths of companies in sectors dependent on discretionary consumer spending (...
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