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Beat the dividend crisis

With more than £2.9bn-worth of dividend cuts made so far, Alex Newman hunts for income survivors
Beat the dividend crisis

Plummeting share prices cause pain to portfolios. But for investors with long-term horizons, reinvesting the regular income provided by company dividends usually serves as protection against short-term storms while a stock’s value recovers. And even if shareholder returns are cut or rebased, a balanced share portfolio (or dividend-focused investment trusts or tracker funds) should still provide some yield, especially for those in retirement and reliant on dividend income. With yield comes that most precious commodity in today’s financial markets: cash.

That’s the theory, at least. But amid the growing corporate crisis, the ordinary income safety net is already starting to fray. Facing unprecedented threats to cash flow and demand, companies are cancelling or suspending their dividends en masse. In recent weeks, more than 30 UK-listed companies with annual dividends of at least £10m have cut, suspended or decided to review their distributions to shareholders. By our calculations, this already amounts to more than £2.9bn of dividend cuts from the FTSE 350 alone.

CompanyDateTypeSaving
Aggreko23/03/2020Final cut (retroactive)£47m
Bellway25/03/2020Interim suspendedc.£62m
Britvic23/03/2020Interim under review-
Crest Nicholson19/03/2020Final cut (retroactive)£56m
Elementis19/03/2020Final cut (retroactive)$33m
Go-Ahead Group23/03/2020Interim cut (retroactive)£13m
Grafton24/03/2020Interim cut (retroactive)£30m
Intercontintal Hotels Group20/03/2020Final cut (retroactive)$150m
ITV23/03/2020Final cut (retroactive)£216m
IWG23/03/2020Final cut (retroactive), buyback suspended£42.4m
John Menzies10/03/2020Cut£12.2m
Kingfisher23/03/2020Final cut£158m
M&S20/03/2020Final cut£190m
Marston's18/03/2020Interim likely suspended£20m
McCarthy & Stone18/03/2020Final cut (retroactive)£18.8m
MicroFocus18/03/2020Final cut (retroactive)£165.1m
Morgan Sindall25/03/2020Final cut (retroactive)£17m
National Express19/03/2020Final under review£57.1m
NewRiver Reit19/03/2020Cut£16.5m
Next19/03/2020Under review£76.4m
Persimmon25/03/2020Interim cancelled, final postponed£748m
Playtech19/03/2020Final cut (retroactive), buyback suspended€65m
Redrow24/03/2020Interim cut (retroactive)£37m
Rentokil25/03/2020Final cut (retroactive)£67.3m
Shaftesbury24/03/2020Interim suspended-
Stagecoach23/03/2020Suspended until further notice-
Taylor Wimpey24/03/2020Final and special cut (retroactive)£485m
Travis Perkins20/03/2020Final cut (retroactive)£83.2m
Whitbread24/03/2020Final suspended-
William Hill16/03/2020Suspended until further notice£46.7m
Source: Investegate, company announcements
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