31st Mar 2016 15:39
LONDON (Alliance News) - Dunedin Income Growth Investment Trust PLC, which aims to generate income and capital growth by investing in companies listed in the UK, on Thursday said it achieved two of three main priorities in the year ended January 31, underperforming its lower benchmark index.
Managed by Aberdeen Asset Management, the trust's priorities are dividend growth, performing better than the FTSE All-Share Index, and maintaining an attractive yield.
"Whilst we have met two of these three objectives we underperformed against our benchmark during the past year," Chairman Rory Macnamara said in a statement.
The chairman said the trust recorded its first year of negative absolute returns since the banking crisis of 2008-09 and, with a net asset value total return of negative 11.5%, underperforming the FTSE All-Share Index's 4.6% fall.
"A number of factors combined to provide a particularly challenging environment; these included our significant weighting in large capitalisation stocks, our overseas exposure (including foreign exchange translation) and some stock specific difficulties - particularly in companies exposed to the sharp fall in commodity prices. However, the board continues to believe that a single year's results must be evaluated in the context of a longer term view and over the last five years, DIGIT's performance has been sound," Macnamara said.
Earnings per share reached a record level of 12.1p, the chairman said, as the trust benefited from a refund of overseas withholding tax worth around 0.5p per share. Excluding that refund, along with one-off items from the previous year, the trust's income per share was broadly unchanged. The trust increased its dividend for the year by 1.3% to 11.4p per share, in line with Retail Price Index inflation.
"This continues the company's solid long term record, with dividends having been increased in 32 of the past 36 years and maintained in the remaining four. Your shares currently offer a dividend yield of over 5%, a premium of more than 20% to the yield on the FTSE All-Share Index and more than three times the yield available on 10 year Gilts. Dividend sustainability is bolstered by revenue reserves which now stand above the level at which they stood prior to the crisis of 2008/09," Macnamara said.
Shares in Dunedin Income Growth Investment Trust closed down 0.9% at 214.0p on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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Dunedin Inc.