29th Jan 2015 10:56
LONDON (Alliance News) - The Diverse Income Trust PLC Thursday said its net asset value fell by 3.2% in the first half of its financial year, reporting that markets have been "more unsettled".
The investment trust, which does not track any benchmark index, said its NAV per share was 79.54 pence at the end of November last year.
"World growth slowed in the period and therefore most businesses are now finding it distinctly harder to sustain decent growth in their revenues and dividends," Michael Wrobel, Chairman, said in a statement.
Nevertheless, Wrobel said that smaller stocks have "greater potential to buck the wider trend".
"In addition," he said, "many of the companies in the portfolio have unusually strong balance sheets, so they are better positioned to sustain dividends, even during tough times. Finally, many of the smaller quoted companies have better dividend cover than some larger companies, offering greater opportunity for them to increase dividends."
"The board is confident that the company remains well-placed to continue to deliver premium returns in the future.
The chairman said the FTSE All-Share Index's 1.7% fall in the six-month period was "modest" and "somewhat understates the wider adverse trend" in market indices. He said that trend was more evident in the FTSE SmallCap (excluding Investment Trusts) Index, which fell 6.6% over the six months, whilst the AIM All-Share Index was down 11.0% in the same period.
Having raised GBP50 million of C share equity capital last June in a move to take "specific advantage of the unsettled markets in
smaller company stocks over the summer", the trust "is unlikely to carry out any further C share issues", the Wrobel said.
"However, should there be some further attractive investment opportunities, the company has the scope to issue small parcels of stock via tap issues, if appropriate," the chairman said.
Diverse Income Trust shares were up 0.3% at 80.75 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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