Government borrowing up again

wotsthat

Thrugelmir wrote: »

A number of companies have been paying special dividends. As was the case when Vodafone distributed the Verizon proceeds. Split these out and the picture looks different.

I found the dividend report below (not come across it before). I looked it up because I class special dividends as a return of capital so I don't delude myself about my personal rate of dividend growth. My own figures are somewhat rosier than you imply I should be seeing. I think most investors are capable of differentiating between dividends and special dividends (the clue in the name helps).

Looks like, despite the recent gloom, underlying dividends will still grow by more than inflation in 2014 and Capita, for what it's worth, are forecasting underlying dividend growth up by 5.5% in 2015.

http://www.capitaassetservices.com/assets/media/SS14248_Dividend_Monitor_Q4_2014-FINAL_PP.pdf

CLAPTON

Thrugelmir wrote: »

Exports will likewise be uncompetitive. To pay a dividend companies have to be profitable.

if the pound 'suffers' then it will fall against other currencies

this will make our exports cheaper abroad

and make the value of foreign dividends received here higher

N1AK

Graham_Devon wrote: »

This, it's said, calls into question the varacity of measuring economic success on employment figures when so much of the employment relys on low paid, minimum wage type jobs.

Employment alone doesn't give a full picture, but then nothing does. To be fair, even if employment increased while raising no more income tax due to the low wages it would still mean decreased welfare spending.

We need to move away from the idea that we can have a sizeable proportion of the workforce doing unskilled work and all live first world lifestyles. The issue is that most people don't think that way. They complain that we're sending too many people to university when there aren't enough jobs that need a degree; rather than that we aren't doing enough to create jobs at a high enough level to use that education.

wymondham

If Government borrowing is up then that surely means no tax bribes at the election as that would be irresponsible management?

Thrugelmir

CLAPTON wrote: »

if the pound 'suffers' then it will fall against other currencies

this will make our exports cheaper abroad

and make the value of foreign dividends received here higher

That's a one sided view. The UK also imports. Increasing the cost of exports. Balance of trade figures are another concern.

N1AK

wymondham wrote: »

If Government borrowing is up then that surely means no tax bribes at the election as that would be irresponsible management?

You must be new to politics they're already promising tax cuts for 30 million people after the election. I can only assume the reason why it's for after the election is so that they don't have to explain exactly what it is or how it will be funded.

Thrugelmir

N1AK wrote: »

You must be new to politics they're already promising tax cuts for 30 million people after the election. I can only assume the reason why it's for after the election is so that they don't have to explain exactly what it is or how it will be funded.

The rapid increase in personal allowance is now appearing an expensive mistake. In terms of lost income tax revenue. Difficult to balance popularity with austerity.

Generali

wotsthat wrote: »

What's the difference between a dividend and an underlying dividend?

I only get the former.

As Thrugelmir says, 'underlying dividends' in this context ignores special dividends.

However, there may be rather more to this than the report suggests in the Executive Summary (journalists rarely seem to read past the Executive Summary):

2014 has seen an unusually large number of special dividends.....With corporate cash piles riding high this may signal a need for firms to dispose of some cash without signalling a change in dividend policy.

I'd read that as mixed news. Companies are earning well so want to give cash back to shareholders. However, that they want to give cash to shareholders implies that there are few good investment opportunities.

The report goes on to talk about how consumer companies are leading the recovery. My thought is that in the past, as growth picked up store chains would open more shops. Now that 'everyone' buys off the interwebs all they need to do is bung another server in the rack, buy another van and hire a bunch of drivers. Very little CAPEX there.

Thrugelmir

Generali wrote: »

I'd read that as mixed news. Companies are earning well so want to give cash back to shareholders. However, that they want to give cash to shareholders implies that there are few good investment opportunities.

Was reading the other day that Glaxo have paid out over £16 billion in dividends in the past decade. Yet their net borrowing has increased by £12 billion. Smoke and mirrors springs to mind. As with Tesco's how many large corporations now resort to financial engineering.

Graham_Devon

Being talked about on the radio at the moment.

Apparently the majority of the money saved in the public sector has been eaten up by increased welfare through tax credits for the low paid and housing benefits.

The amount of people claiming IN WORK benefits has gone up 1100% since the coalition took power. This is due to a combination of stagnant wages (therefore, people finding themselves now able to claim tax credits), people taking on low / minimum wage jobs and part time jobs.

Interesting though, there has apparently been an increase of private companies taking over public sector jobs. So basically, the public sector offering contracts to private companies. So this reduces the public sector head count, increases jobs in the private sector, but decreases the security for the employee, also increasing tax credits. Many of these ex public sector jobs are now, (again, apparently) carried out by self employed people / those on zero hour contracts working for the private sector.