Payouts from AIM companies on track for record year

Companies on London’s junior market are set to pay out record amounts to investors this year, even as the smaller stocks decline in value due to Brexit uncertainty.

Firms on the Alternative Investment Market (AIM) awarded dividends of £633 million in the first six months of 2019, up 23.9% on last year according to data from Link Group.

It is forecast that the total for the year will reach more than £1.3 billion as companies increase their payouts by 16.8%.

It will be the second year in a row in which AIM investors have shared a total dividend pile of more than £1 billion.

Last year payouts surpassed the benchmark for the first time ever.

Michael Kempe, chief operating officer at Link Market Services, said: “Fewer AIM companies pay dividends than their main-market counterparts, simply because so many are still in their early capital-hungry phase.

“But not only has the proportion of AIM companies paying dividends risen, but those coming to market are doing so earlier, and those paying them are growing their dividends rapidly.”

Despite dividend growth, the value of companies on AIM has declined over the past year as investors shy away from riskier assets in the face of potential Brexit chaos and a gloomier global outlook.

Some of the most notable dividend payers include Quartix Plc, which has paid a special dividend alongside its regular one for three straight years.

Bowleven, an oil and gas company which came under pressure from an activist investor last year, paid out £50 million in the first half, accounting for much of the £66.7 million total.

Top-paying sectors were healthcare, financials and industrial goods. But retail and building stocks paid less than last year.

AIM dividends have tripled since 2012, compared to a 45% increase in main-market payments.

But the market still accounts for a tiny portion of the dividends paid by listed companies, with the total paid by all AIM companies over the last 12 months only slightly above that of FTSE 100 consumer giant Reckitt Benckiser.