18th Jan 2017 17:13
LONDON (Alliance News) - Bankers Investment Trust PLC on Wednesday lifted its total dividend for the 50th consecutive year, after net asset value rose 20% over the twelve months ended October 31.
The trust reported a net asset value per share of 755.90 pence for the year, up from 630.20p the prior year, despite experiencing "a volatile year in financial markets".
Bankers said its portfolio performance has been "dominated by the collapse in sterling" since the UK voted to leave the European Union, and said it significantly reduced is exposure to UK domestically exposed stocks prior to the vote.
The trust said its performance in the Pacific, China, Emerging Markets and European sectors was generally positive, with only the US and UK regions missing their benchmarks.
Bankers Investment said its revenue earnings per share grew 1.8% over the year ended October 31 to 17.50 pence, in light of which it has recommended an increase in the final quarterly dividend to 4.60p per share. The trust said if this is approved, it will result in a total dividend of 17.00p per share, up 7.6% from the 15.80p per share offered the prior year.
Bankers Investment said the outlook for its year ahead was "positive" and, should the sterling exchange rate remain at around the current levels against the dollar, euro and yen, it expects to once again lift its dividend in its next financial year.
Bankers Investment forecast dividend growth of 6.0% for the next year, representing a minimum total dividend for the year of around 18.00p per share.
"Putting politics aside, the economic tailwind looks positive. [US] President Trump has inherited a strong economy where growth is accelerating. The strong US economy, despite the protectionist rhetoric, is good for the global economic outlook. In the UK we are bound to see a significant jump in inflation as a result of the weaker level of sterling," the trust said.
"If we see pressure mounting on wage inflation the Bank of England might move more quickly to raise interest rates. Depending upon the resilience of the UK economy in 2017 this could have a negative impact on a number of sectors although it could well be seen as a positive for the financial sector," Bankers Investment added.
Shares in Bankers Investment closed up 1.1% at 715.00p on Wednesday.
By Hannah Boland; [email protected]; @Hannaheboland
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