4th Mar 2015 10:40
LONDON (Alliance News) - Aberdeen Smaller Cos High Income Trust PLC Wednesday said it outperformed the benchmark index in 2014 but lamented a fall in net asset value on a total return basis, ahead of an upcoming vote on its continuation.
The investment trust said its net asset value fell by 2.1% on a total return basis in 2014, while the FTSE Small Cap (ex-IT) Index declined by 2.7%.
The trust increased its dividend to 6.45 pence per share from 6.25p.
Over the course of the year, the discount of the trust's share price to net asset value widened to 18.2% from 5.7%.
"The board believes that the company's investment proposition is attractive and we expect that as sentiment towards smaller companies improves, the discount will narrow," Carolan Dobson, chairman, said in a statement.
"The board and the manager believe there is potential for growth in capital and income in 2015, with the right risk controls in place. We believe in the importance of protecting the downside through more volatile periods through investing in quality companies with strong balance sheets and cash-flow," Dobson said.
Aberdeen Asset Management is the trust's fund manager.
With a vote on whether the trust should continue or be wound up looming at the trust's upcoming annual meeting of shareholders, Dobson said the board thinks the trust is still an attractive investment.
"The company has continued to deliver a yield higher than that generally available in the smaller company equity market and steady growth in the dividend, as well as capital growth through a portfolio of good quality companies run by strong management teams. The board and manager remain confident that the opportunities to invest in small cap companies with attractive growth prospects will continue and therefore considers that it is in the best interests of shareholders to vote in favour of continuation at this year's AGM," Dobson said.
The annual meeting is scheduled for April 23.
The trust's shares were flat at 201.50 pence on Wednesday.
By Samuel Agini; [email protected]; @samuelagini
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