26th Sep 2019 11:42
(Alliance News) - Dunedin Income Growth Investment Trust PLC on Thursday said it was able to outperform its benchmark in the first half, following a strong performance from its portfolio which has seen no "materially weak" performances.
On July 31, the trust's NAV per share stood at 306.53 pence compared to 270.90p at the end of January, a 13% rise.
Over the six-month period Dunedin Income Growth's total net assets also increased 13% over the first half, ending the period at GBP454.2 million compared to GBP401.7 million at January 31.
Dunedin Income Growth declared two interim dividends of 3.0p during the period, unchanged from the year before. The trust said it is its intention to continue a policy of growing total annual dividends in real terms over the medium term. In financial 2019, Dunedin Income Growth paid total dividends of 12.45p.
The trust's total return in the six month period was 15.8%, outperforming its benchmark - the FTSE All-Share Index - which gained 10.6%.
Chair David Barron said: "Although the FTSE All-Share moved steadily higher over the six months, economic and political conditions remained far from smooth. Government bond yields moved sharply lower reflecting a continuing weakening of global economic data, particularly in manufacturing, as the effects of the United States' trade policy unsettled business confidence. Sterling also weakened significantly against most major currencies, due to the political uncertainty in the UK."
The trust's investment managers, Ben Ritchie and Louise Kernohan from Aberdeen Asset Managers, added: "We are pleased to report another period of progress for the company. Since our appointment as lead managers over three years ago we have looked to increase exposure to holdings that can drive medium term capital and income growth, whilst moving away from companies with higher starting yields but lower growth prospects."
"Performance was sound for the first half of the financial year. This was driven by very strong returns from some of the holdings in the portfolio. For example, software company Aveva [Group PLC] saw its share price appreciate sharply as it continued to outperform market expectations following the merger with Schneider Software.
"Some of the European holdings had a notable positive influence, with French food voucher company Edenred, Italian hearing aid retailer Amplifon and Finnish elevator and escalator manufacturer Kone performing particularly well," the managers added.
The two managers noted no portfolio holding's performance was "materially weak" in the period.
Barron added: "Equity markets remain surprisingly buoyant given growing concerns over global growth and the continuing escalation of trade conflicts. In the UK, there remains a great deal of uncertainty regarding the outcome of Brexit negotiations with the EU, which combined with the likelihood of further domestic political turmoil and an economy that is increasingly showing the strains of three years of uncertainty, makes us additionally somewhat cautious."
Shares in Dunedin Income Growth were trading flat at 269.00p each.
By Paul McGowan; [email protected]
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