Britain faces a repeat of the Carillion collapse because big companies have cannibalised their balance sheets to boost dividends to shareholders, a report has warned.
Firms have increasingly focused on artificially driving up share prices using debt and takeovers, says think-tank Productivity Insights Network.
Concern: Firms have increasingly focused on artificially driving up share prices using debt and takeovers
It said the rate of increase in dividends and share buybacks over the past decade, which have totalled £1trillion in that time, had far exceeded the rate of profit growth.
Professor Richard Murphy, one of the authors of the report, said: Businesses that pay out more than they earn cannot survive in the long term.
In the media
Australia makes top 10 for real estate investment
Australia just became one of the top ten countries to buy real estate with inbound investments to increase sharply in 2021 (04 November 2020). More.
Office outlook optimistic for 2021
There is likely to be “no major demise” to the global office sector, despite remote working arrangements, with higher rental incentives expected in CBD offices, according to a global survey by Savills Investment Management (04 December 2020). More.
Australian commercial property firms see environmental management as increasingly important to their business
Many companies that work in commercial real estate are lagging behind other industries in terms of good environmental management, but there is an increasing number that are catching up fast, a new international report has found (03 December 2020). More.