Scottish Investment Trust Dividend "Step Change" Amid Portfolio Growth

LONDON (Alliance News) - The Scottish Investment Trust PLC on Monday hiked its full-year ...

Alliance News 11 December, 2017 | 8:48AM
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LONDON (Alliance News) - The Scottish Investment Trust PLC on Monday hiked its full-year dividend distributions and switched to quarterly payments Monday amid double-digit net asset value growth.

For the year ended October 31, net asset value per share with borrowings at market value grew 8.1% to 924.4 pence from 854.9 pence the year prior.

Total share price return for the year was 12.8%, helped by the reduction in the NAV discount to 8.8% from 10.0% the year before. Although Scottish does not have a formal benchmark, the investment trust highlighted that the MSCI All Country World Index returned 13.3% and the MSCI UK All Cap Index returned 13.5% over the same period.

The trust argued, however, that its "contrarian" approach meant it expected to generate more of its returns in "particular market conditions".

"Our style is distinct and we would expect other investors to ebb and flow in their support for the types of stocks we favour", Scottish Investment Manager Alasdair McKinnon said. "We aim to achieve above-average long-term performance, although we do not expect this to be achieved in a linear manner. We are less likely to participate in the exhilarating latter stages of a bull market because we think it is vitally important to survive the down leg of an investment cycle."

The company said it will make a "step change" in its dividend distribution. The final dividend was declared at 14.5 pence per share, up 76% from the 8.25 pence the year prior. For the full year, the regular dividend grew 48% to 20.0 pence from 13.5 pence the year before.

Scottish also declared a 5.0 pence special dividend. This compares to the 9.0 pence special dividend per share distributed the year prior. The full payout for the year as a result is up 11% to 25.0p from 22.5p.

In the new financial year ending October 31, Scottish said it will pay dividends quarterly as opposed to the current semi-annual distribution.

"The board is pleased with the progress made to transform the investment approach, to increase the regular dividend, to reduce the cost base and to improve the profile of the company", Scottish Chairman James Will said. "It now believes that the company is differentiated, competitive in costs and an attractive investment vehicle focused on delivering above-average returns and dividend growth over the longer term."

Shares in Scottish were 0.5% higher at 854.00 pence on Monday.

By Ahren Lester; ahrenlester@alliancenews.com.

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar
Rating
Scottish Investment Trust Ord 783.00 GBX -1.01
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