By Ryan Weeks

Of Financial News

 

The value of dividend cancellations in 2020 has risen to 31.6 billion pounds ($39.62 billion), according to an analysis by Peel Hunt, the boutique investment bank.

Of that total, GBP26.5 billion comes from cancellations made by FTSE 100 firms, with a further GBP4.6 billion from FTSE 250 companies, Peel Hunt said in a research note Monday.

The cuts affect a wide variety of shareholders, from those invested in banks, such as Lloyds Banking Group PLC and HSBC Holdings PLC, to investors in telecommunications group BT Group PLC, fashion firm Next PLC and BAE Systems PLC, the defense company.

The firm also identified the FTSE 100 and FTSE 250 firms which it sees as likely to pay dividends in 2020 that are "similar to or higher than" last year's pay-outs.

This list included several financial services firms, including Hargreaves Lansdown PLC, London Stock Exchange Group PLC and Schroders PLC.

In all, some GBP29 billion in dividend payments are due to be made before the end of the year by 76 FTSE 100 and 109 FTSE 250 firms.

Peel Hunt's analysts said: "While the pace of change in the cancelled and cut dividends has slowed materially, this has more to do with the quieter reporting schedule."

"With GBP29 billion worth of dividends still to be decided on for CY20 payments, the market will focus back on the story with the late summer results season."

The value of committed dividend payments for 2020 comes to GBP11.4 billion, with another GBP4.7 billion due in June and July.

During the coronavirus pandemic and subsequent lockdown, many firms have been forced to cancel dividend payments to help see them through the crisis. By April, a quarter of U.K. companies had taken the step.

U.K. banks halted dividend payments in March after effectively being told to do so by the Bank of England.

 

Website: www.fnlondon.com

 

(END) Dow Jones Newswires

June 15, 2020 08:54 ET (12:54 GMT)

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