9th Sep 2025 12:16
(Alliance News) - Dunedin Income Growth Investment Trust PLC on Tuesday said it will use capital and income returns to "significantly increase" payouts.
The UK-focused investment trust said it will raise dividends to at least 6.0% of net asset value, based on a NAV of 324.4 pence per share at July 31.
This would lift the total dividend for the year ending January 31, 2026 to at least 19.1p per share, around 35% higher than 14.20p per share the previous year.
Dunedin Income Growth plans to fund the increase through revenue and capital generation, noting: "The company has substantial revenue and capital reserves totalling GBP298 million as at July 2025, equivalent to approximately 12 years of the new dividend distribution, underpinning the policy for the future."
The new policy is not expected to alter the investment process, but is expected to improve flexibility, the company said.
Its second interim dividend of 4.25p per share is payable as usual in November, following a first interim dividend payout of 3.2p in August. A further 4.25p dividend is due in February, and a final dividend of at least 7.4p. Looking ahead, the company is planning three equal interim payouts per year, followed by a balancing final dividend.
Dunedin Income Growth said the change was partly due to shifting distribution policies among its investees, with companies favouring buybacks over dividends.
"Alongside this, the board notes the substantial increase in interest rates since late 2021 which has made holding cash a more attractive proposition than was the case for the period following the global financial crisis," the firm added.
Dunedin Income Growth shares were up 0.3% at 294.00p around midday on Tuesday in London.
By Holly Munks, Alliance News reporter
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