FTSE 350 dividend cover falls to lowest level since 2009

Concern over prospects for FTSE 250 after referendum

Plummeting profits for the largest 350 UK companies in 2015 pushed down dividend cover levels to their lowest since the end of the last recession, with warnings of deterioration for FTSE 250 names following the Brexit vote.

The analysis, using data from The Share Centre's Profit Watch UK report and the Capita Asset Services UK Dividend Monitor, shows dividend cover has fallen by 38% in the past year for the FTSE 350, dropping to 0.98x from 1.63x. This is based on profits of £76.4bn reported by FTSE 350 companies in 2015, which is a fall of 54% from £166bn a year ago. However, dividend payments rose from £71.2bn to £78.4bn over the period; the first time since 2009 that dividends have exceeded net profits. Dividend cover, a ratio defined by profit after tax divided by dividends paid, has been falling for ...