Taylor pick Telefónica announces 2012 dividend cut

At a board meeting yesterday, the Spanish broadband and telecommunications provider voted to maintain the dividend for 2011 at €1.60 (£1.34) per share. As 77¢ was paid out to shareholders in November, the remaining 83¢ will be disbursed in May 2012.

However, the company also decided to pay a dividend of €1.50 per share in 2012 – going against its former policy of gradually increasing payments each year. The dividend for 2013 is expected to be frozen at €1.50.

The company explains that its former shareholder remuneration targets, where were created in October 2009, “were established considering an economic and operating environment and financial markets conditions that have changed materially since then”.

Telefónica accounts for 3.52% of Taylor’s £1.1 billion Invesco Perpetual European Equity fund. It can also be found in the portfolios of Nick Ford and Nick Millington’s £403.5m Scottish Widows European Growth fund and David Elms’ £358.4m Henderson European Equity Enhanced fund.

In November the company posted its first quarterly loss in nine years, blaming falling domestic sales.

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