Dividends distributed by UK companies dropped by 4.6% to £14.0 billion during the first quarter of 2025, according to Computershare’s latest Dividend Monitor.

The headline decrease primarily reflects the reduction of one-off special dividends, which accounted for 3.3 percentage points of the overall decline.

Regular dividends totalled £13.6 billion, representing a very marginal 0.2% year-on-year decrease when excluding special dividends and adjusting for currency fluctuations.

While there was an overall decline in UK company dividends, the reduction was concentrated among a small number of companies. Significant dividend cuts from three major companies – Vodafone, Burberry, and Bellway Homes – collectively reduced the total by five percentage points.

The pharmaceutical sector was the quarter’s strongest performer in terms of dividend growth, with companies like AstraZeneca and GSK making the strongest positive contributions.

“Although the headline dividend growth looks disappointing this was mainly due to lower one-off special dividends. These can be volatile and investors shouldn’t be too concerned given they are more discretionary than ordinary dividends,” said David Smith, Portfolio Manager at Henderson High Income Trust.

“Certainly given the uncertain economic outlook caused by President Trump’s trade policies we would expect companies to take a more conservative approach and pare back special dividends and share buybacks to preserve cash flows.

“However, it’s important to remember that UK companies are in a healthy position with strong balance sheets while ordinary dividends are well covered by profits, much more so than at the start of the Covid pandemic.

“Hence we believe ordinary dividends will be resilient going forward on an underlying basis and we are encouraged by the 3.3% dividend growth seen from the median company in the UK, which is more in line with our expectations on underlying dividend growth this year.”

Petro Matad shares rose on Monday after the Mongolia-focused energy company outlined production payment terms that will generate regular revenue from May.

Petro Matad has announced the signing of an Oil Sales Agreement with PetroChina Daqing Tamsag for Block XX crude oil production, which lays the foundations for steady cash flows that can help support additional exploration and optimisation of their Mongolian assets.

The agreement, signed today, covers the storage, processing, transport and export of crude oil from Block XX. PetroChina Daqing Tamsag operates the neighbouring Block XIX.

Petro Matad has submitted invoices for production from the Heron 1 well covering the period from October 24, 2024, to March 31, 2025. These invoices will be processed for payment during May 2025.

Going forward, Petro Matad will submit monthly invoices by the tenth day of the subsequent month. Payments will be made during the last week of each month, based on the average benchmarked price of Daqing crude oil for the production month.

Custody transfer of Block XX oil occurs at the Block XIX processing facilities. PetroChina will handle all processing, transport, and export of the crude oil to buyers in China.

“We are delighted to have signed the oil sales agreement for the commercialisation of Block XX production. This involved a number of firsts for Mongolia and whilst the process was slow, we are grateful to the Mongolian authorities and to PetroChina for their support,” said Mike Buck, CEO of Petro Matad.

“We look forward to establishing a cooperative routine in the sales process in the same way that the field crews in Blocks XIX and XX have done in the production operations over the last 6 months and to receiving payment for all the oil produced to date during the month of May.”

The FTSE 100 was steady again on Friday as the continued de-escalation of trade tensions supported US equities overnight and helped lift the mood in Europe on Friday.

London’s leading index was 0.1% higher at the time of writing and looked set for another weekly gain as the FTSE 100’s recovery from the Liberation Day selloff ground on.

“Another strong session on Wall Street yesterday lifted spirits at the end of the trading week, resulting in small but welcome gains across much of European equities markets on Friday,” says Russ Mould, investment director at AJ Bell.

“The past three weeks have been chaotic and investors have been subjected to a whirlwind of events. That chaos is now easing away and replaced by a tentative feeling of serenity. Donald Trump could easily turn markets back on their head with a single remark, but for now, we can embrace a moment of calm.

“First, we had indications that the Trump administration might soften its tone in the fight against China. Now we have reports that China might exempt certain US imports from tariffs. While tariffs are unlikely to go away completely, any easing of the trade war will be lapped up by financial markets.”

A softening in trade tensions was reflected in buying pressure for stocks that had been heavily impacted by Trump’s tariff announcement.

Melrose was the FTSE 100’s top gainer as bargain hunters continued to buy the engineering firm after being battered by tariff concerns.

Babcock and Rolls-Royce also gained, demonstrating a clear interest in the sector as concerns about the trade war subside.

There were also table gains for the US-tech focused Polar Capital Technology Trust after a strong session for the sector overnight. The trust’s top holdings include Nvidia, Apple and Alphabet.

The improvement in investor sentiment curtailed demand for gold, sending the price lower on Friday and taking Endeavour Mining to the bottom of the leaderboard with a 2% loss.