Investors hit by £30bn in dividend cuts as companies fight to survive (2024)

Investors are facing a £30billion dividend black hole as companies scramble to cut costs to survive the coronavirus crisis.

Imperial Brands and Antofa*gasta have become the latest big-name firms to slash their shareholder payouts.

Almost half of the FTSE 100 has taken the axe to dividend payments – either by cutting them, cancelling them entirely or deferring decisions on payouts until a later date.

And more than 330 companies listed in London in total have rowed back on dividend commitments worth £30.4billion since the start of this year, according to investment platform AJ Bell.

The cuts will hit millions of Britons, including savers who rely on the payouts as a source of passive income and pensioners who use them to top up their pots.

But the dividend drought is set to get even worse after the Treasury unveiled rules that will ban large companies using the Government’s Covid-19 support packages from handing payouts to shareholders or cash bonuses to bosses.

Cutting dividends has been one of the first moves deployed by companies looking to shore up their balance sheets and stem their outgoings.

Usually reliable high-dividend payers including Shell, BT and British Gas owner Centrica have shocked the market by introducing unprecedented changes to their policies.

Yesterday Imperial Brands slashed its dividend for the first time since 1996 to tackle its £13.5billion debt and prepare for a bigger hit from the virus in the second half of its financial year.

The cigarette maker will cut its half-year payment by a third to 41.7p – a drop of £652million when applied to the full-year.

And copper miner Antofa*gasta will hand out 70 per cent less to shareholders in its final dividend following a coronavirus outbreak in Chile, in a move that will cost investors £132million.

Laura Suter, personal finance analyst at AJ Bell, said savers could commit more cash to the 140 companies that have pledged to pay investors £12.3billion, including the likes of BP, Sage, Vodafone, Glaxosmithkline and Diageo.

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