Research conducted by financial information service provider Markit, suggests that dividends will slow in 2016 (Investment Advice, Clifton, Bristol).The amount paid by the top 350 listed companies in the UK is likely to reduce to approximately £75bn. This equates to a fall of 1%. Embattled Rolls Royce, who has announced a slew of profit warnings over recent years is likely to slash its dividend by 50%. The new CEO, Warren East who came from ARM Holdings, is looking to reduce the management team in an effort to reduce spending. Commodity companies have also had reason to be concerned about their cash flow statements and balance sheets, as demand for their products has caused huge drops in the underlying commodities.
BHP Billiton will cut its dividend in half this year, following on from Anglo American who stopped paying a dividend last year entirely. Oil companies such as Shell and BP have suggested they would try to protect their dividends. However, in the light of drastic falls in the price of crude, they will probably be forced to finance these payments by borrowing.
This is likely to be offset in part, as Markit suggest that the banking sector will increase payments as HSBC and Lloyds look to increase their dividend payments and the travel and leisure sector may continue to grow its payments to shareholders.
Investment Advice, Clifton, Bristol
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Churchill Wealth Management Limited is located at 13 Alma Vale Rd, Bristol BS8 2HL, United Kingdom.
About Us: Churchill Wealth Management is a team of independent financial advisors/financial advisers (IFAs) based in Clifton, Bristol. We provide independent financial advice, including pension advice, investment advice, inheritance tax planning and protection/insurance advice.