Oil and mining engineer Weir Group led a pack of more than a dozen UK companies suspending dividends on Thursday due to the impact of Covid-19.
A total of 14 companies announced a payout suspension, including FTSE 250-listed Senior and SIG, taking total cuts since the start of the year to nearly £4 billion, AJ Bell statistics show.
Weir said it was prudent to slash the £79 million payout to ensure “maximum flexibility” in the months ahead.
The firm is beset both by the economic hit of coronavirus and also the slump in the oil price, which could make many projects unprofitable.
Doorstep lender Non-Standard Finance, which has scrapped its traditional door-to-door collection of loan repayments, also cut.
The 14 dividend suspensions on Thursday amounted to £230 million.
The £4 billion of payouts were set to flood into the coffers of pension fund managers portfolios.
Some fund managers support the cuts.
Legal & General Investment Management and Fidelity International are urging companies to slash dividends amid the downturn.
Sanlam Wealth UK chief investment officer Phil Smeaton said he also supported dividend cuts in the current climate and was hesitant about corporate strategies which invest solely to pay a dividend.
“The dividend is meant to be a measure of earnings power.
"In a time like this, you should ask what is the sensible thing to do.
"Rather than paying a dividend due to a dogmatic approach the sensible thing to do is say we might need that cash in the short term and maybe distribute it later.”
