UK plc’s profits hit post-crisis low

The companies in the FTSE 350 – comprising Britain’s blue-chips and mid-caps – notched up pre-tax profits of £84bn in 2015, down 38% on the previous year.

Last year was a torrid one for UK plc, says City AM's Jake Cordell. The companies in the FTSE 350 comprising Britain's blue-chips and mid-caps notched up pre-tax profits of £84bn in 2015, down 38% on the previous year and the worst annual tally since 2008. Back then, the 350 earned £99bn. Sales declined for the third year in a row in 2015, falling by 10.5% to £1.64trn.

The fall was largely due to the oil, mining and financial sectors, which have been hit by the commodities slump and volatile markets. They comprise 40% of the FTSE 350's sales. The bounce in raw-materials prices may bode well for this year, but with miners and oil firms crucial to income investors, it comes too late to prevent forecasts of a decline in UK dividends in 2016.

Global dividends on the rise

According to HendersonGlobal Investors, whichhas been monitoring 1,200firms worldwide since2009, global dividendsedged up by 2.2% year-on-yearto $218bn. For 2016 asa whole, it expects globaldividends of $1.18trn,an increase of 3.3%. Itsindex tracking worldwidedividends since 2009 isclose to its 2014 peak.

Japan, Europe and NorthAmerica led the advance in the first quarter; the latteraccounts for 60% of globalincome from shares. Inthe UK, however, payoutsdeclined by 5% year-on-yearin dollar terms, dueto the pound's weaknessagainst the greenback. Onan underlying basis theyclimbed by 0.7%.

This year, too, will be astruggle for dividend seekersin the UK, thanksto the heavy weightingof the ailing commodityand banking sectors.Cuts announced by theseindustries "will bite deeperlater in the year", BenLofthouse of Hendersontold the Financial Times.

Recommended

What to buy as the tech-stock bull market crashes
Tech stocks

What to buy as the tech-stock bull market crashes

The decade-long bull market in tech stocks has come to a rapid halt. Investors need to distinguish solid stocks from speculative ones rather than just…
27 May 2022
What sardines can teach investors about today's markets
Investment strategy

What sardines can teach investors about today's markets

A California tale of “eating sardines” and “trading sardines” can help us divide investments into speculative and real, says Merryn Somerset Webb. Som…
26 May 2022
Here’s how the government plans to cut consumers’ energy bills
Personal finance

Here’s how the government plans to cut consumers’ energy bills

Rishi Sunak has outlined a £15bn package to help consumers cut the cost of soaring energy bills. Saloni Sardana looks at what he’s proposing and what …
26 May 2022
Is it time to pick up growth stock bargains yet?
Investment strategy

Is it time to pick up growth stock bargains yet?

If you’re thinking of picking up some bargains from the tech stock crash, beware – there are still plenty of “growth traps” out there. John Stepek exp…
26 May 2022

Most Popular

The world’s hottest housing markets are faltering – is the UK next?
House prices

The world’s hottest housing markets are faltering – is the UK next?

As interest rates rise, house prices in the world’s most overpriced markets are starting to fall. The UK’s turn will come, says John Stepek. But will …
23 May 2022
The Federal Reserve wants markets to fall – here’s what that means for investors
Stockmarkets

The Federal Reserve wants markets to fall – here’s what that means for investors

The Federal Reserve’s primary mandate is to keep inflation down, and lower asset prices help with that. So, asks Dominic Frisby – just how low will st…
25 May 2022
Should you be worried about energy windfall tax proposals?
Energy

Should you be worried about energy windfall tax proposals?

Calls have been growing for a windfall tax on UK oil and gas producers. It's a popular idea, but is it a good one? And what does it mean for investors…
24 May 2022