Page 20 - DIY Investor Magazine - Issue 25

COVID 19 & DIVIDENDS
By Mark Riding
dividendmax
The impact of the pandemic on Dividends has been swift and dramatic. Firstly, it came at a very bad time in March / April which was just after the main ‘Finals’ reporting season.
In over nine years of running DividendMax, we believe we had only seen cancelled dividends maybe once or twice.
With the advent of lock down, a virtually unprecedented event – we saw previously declared dividends cancelled and havoc in the markets. Covid 19 statements were being made by hundreds of companies and many were cancelling dividends declared in the weeks before. It is fair to say that there were a lot of companies with strong balance sheets or lesser impacted businesses that chose to plough on with their dividend payments.
The overall picture in the UK was relatively black and white. They either cut the dividend completely or paid up, with a much lesser number choosing to defer the dividends or reduce them due to Covid. The exact numbers for the FTSE 100 are detailed below. As time passed we saw a good number of dividends being reinstated as companies realized that their businesses were not as badly affected as they first thought they would be.
CERTAIN SECTORS WERE VERY BADLY AFFECTED.
The banks were told not to pay dividends in calendar year 2020, the travel and leisure sectors were very quickly on their knees; Aerospace and Defence similarly so; pubs, bars and restaurants were closed. Retail was also savaged save for
the food retailers. The oil industry suffered from the double whammy of Covid and a price war between Russia and Saudi Arabia.
Six months on, the worst affected sectors have continued with their interim results to not pay dividends. See the table below for the full picture of what happened in the FTSE 100:
Company
Auto trader
BAE
BT
Cut
Yes
Cancelled previously declared
Increased
Decreased
Maintained
Resumed
Paid previously cancelled
3i Group
yes
Admiral
Yes
Anglo American
Yes
Antofagasta
Yes
Ashtead
Yes
Associated British food
Yes
Astra Zeneca
Yes
Avast
Yes
Aveva
Yes
Aviva
Yes
Yes
Yes
Yes Yes
Barclays
Yes
Barratt dev
Yes
Yes
Berkeley
Yes
BHP
Yes
BP
Yes
BATS
Yes
British Land
Yes
Yes
Bunzl
Yes
Yes
Yes
Burberry
Yes
Coca cola HBC
Yes
Compass
Yes
CRH
Yes
Croda
Yes
DCC
Yes
DIY Investor Magazine | Sept 2020 20