Dividends

BT Globe and butterfly 

Dividends are a part of a company's profit, passed to its shareholders. The amount may vary over time, as it depends on the company's overall profitability and plans for future investment. Our dividends are normally paid twice a year, with final dividends paid in September, and interim dividends in February. Payments for 2011/12, 2012/13 and 2013/14 are:

Dividend dates 

 

Financial year

Dividends

Amount
(pence)

Ex-dividend dates

Record date

Payment date

2013/14

Final

7.5

13 August 2014

15 August 2014

8 September 2014

2013/14

Interim

3.4

23 December 2013

27 December  2013

3 February 2014

2012/13

Final

6.5

7 August 2013

9 August 2013

2 September 2013

2012/13

Interim

3.0

24 December 2012

28 December 2012

4 February 2013

2011/12

Final   

5.7

8 August 2012

10 August 2012

3 September 2012

2011/12

Interim

2.6

28 December 2011

30 December 2011

6 February 2012


More dates and payments

Dividend policy 

At our 2013/14 full year results on 8 May 2014, we announced that we have extended our dividend policy by one year and now expect to grow our dividend by 10% - 15% in both 2014/15 and 2015/16.  

Futher information on dividends

Dividends are the share of a company’s profits that it decides to pay to its shareholders. They are an important part of the return from investing in shares, in addition to any increase in the share price. Companies are under no obligation to pay dividends, but they usually choose to do so because dividends provide an incentive to invest in their shares.

Companies typically keep part of their profits back to expand the business and/or increase their reserves, and will then pay out the rest as a dividend. If companies have good investment opportunities, they will tend to keep more of their profits back for this purpose, reducing the amount available for dividends. So the amount of profit companies make and the alternative uses of its profits will help to determine the dividend.

The level of dividend also depends on the company’s dividend policy. Many large companies - including BT Group - have a ‘progressive’ dividend policy, whereby dividends gradually increase as a percentage of profit, because this is what big institutional investors prefer.

Dividends are usually paid after the half-year and full-year financial results, although some companies pay quarterly. At this time, a company’s board of directors will decide how much to pay per share. At the same time, the ex-dividend date, the record date and the payment date will be announced. The shares entitle the holder to receive a dividend up to the ex-dividend date. (The share price will fall by the amount of the dividend after this date: the shares ‘go ex-dividend’.) The record date is when the company registrar determines who is entitled to receive the dividend: the ‘beneficial owner’. The payment date is the date on which payment of the dividend is made to the beneficial owner.

Companies pay shareholders dividends out of profits on which they have already paid - or are due to pay - tax. The dividend paid represents 90% of the shareholder’s 'dividend income'. The remaining 10% of the dividend income is made up of the tax credit. When shareholders receive their dividend, they get a voucher that shows the dividend paid and the 10% ‘tax credit’ which they can offset against any UK income tax due on dividend income. You can find more information about understanding the UK dividend tax credit and paying UK tax on dividend income on HM Revenue & Customs website.