5th Mar 2014 12:22
LONDON (Alliance News) - Aberdeen Smaller Companies High Income Trust PLC Wednesday said it outperformed its benchmark over 2013, reporting a strong total return.
The trust's net asset value total return was 45.0%, while the share price total return was 47.2%, comparing favourably against the 43.9% total return of the FTSE Small Cap (excluding Investment Trust) index.
In a tough year for income investors, the trust reported 19% revenue growth.
"This may look at odds with the 19% growth in revenue that the trust delivered but the majority of this was derived from special dividends: Hiscox, Savills, Aveva, and Elementis," Carolan Dobson, chairman, said in a statement.
"It's worth saying that buying companies with strong balance sheets is part of the manager's process and special dividends are one option for such companies to return excess liquidity to shareholders. Whilst we therefore don't expect these to recur every year, it's not altogether surprising when this happens and this has allowed us to add to our already strong revenue reserves," Dobson added.
Dobson said the trust has in the past used revenue reserves to supplement income during tough periods and would be comfortable to do it again.
The trust increased its full-year dividend to 6.25 pence from 6.05 pence in 2012.
"The manager's expectations for earnings growth in 2014 for smaller companies are for mid-single digit earnings per share growth, though it is still too early in the year for company management to be giving guidance, but the manager believes this to be a solid base to work from. A sustained recovery in the economic backdrop could see these figures trend higher," Dobson said.
The trust's shares were Wednesday quoted at 225.74 pence, up 0.6%.
By Samuel Agini; [email protected]; @samuelagini
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