Dividend payments by London-listed companies will fall 6.5 percent this year, mainly because BP suspended payouts after the Gulf of Mexico oil spill, Capita Registrars Dividend Monitor said.
It followed a 13.4 percent drop in payouts last year in the wake of the credit crisis in 2007 and 2008, according to a report from Capita Registrars which provides share registration.
Capita Registrars, a unit of British services company Capita Group, estimated British companies would pay 54.7 billion pounds ($83.6 billion) to shareholders this year, down from 58.5 billion last year.
In the first half, London-listed companies paid 28.6 billion pounds in dividends, down 5.4 percent year-on-year.
Oil major BP, the top dividend payer in Britain in 2009, said last month it was cancelling the first-quarter dividend due for payment on June 21 and would not declare interim dividends for the second and third quarters.
The canceled amount was estimated to be more than 5.4 billion pounds, Capita Registrars said.
2010 is going to be another tough year for some income investors due to one company cancelling their dividend, said Paul Taylor, head of dividends at Capita Registrars.
However, companies in the mid-cap FTSE 250 index were expected to lift their payouts.
In the first half, dividends from mid-cap companies rose 24 percent to 2.4 billion pounds and were expected to reach 5.3 billion for the year, Capita Registrars said.
Last year, FTSE 250 companies slashed their payouts 44 percent, versus an 8 percent cut by FTSE 100 companies.
Now the economy is recovering, the fortunes of the more UK-based firms are rebounding, and they are more comfortable returning cash to shareholders, Taylor said.
The FTSE 250 is still paying a third less than in the first half of 2008, but is growing its dividends quickly. (But) the FTSE 250 contributes just one twelfth to the total dividend pot.
The Thomson Reuters I/B/E/S consensus is for FTSE 100 companies to post 51.96 percent earnings growth this year and 21.65 percent in 2011, according to Thomson Reuters DataStream. That compared with 13.42 percent growth for FTSE 250 companies this year and 19.73 percent for next year.
(Reporting by Dominic Lau; Editing by Dan Lalor)