2nd Mar 2015 12:46
LONDON (Alliance News) - The Scottish American Investment Company PLC Monday said prospects for dividends remain encouraging, although it is cautious about challenges to the global economy and political uncertainty due to the upcoming General Election in the UK this May.
In a statement, Chairman Brian Ivory explained why he thinks the company remains well placed to meet its objective of delivering real dividend growth by increasing capital and growing income over time.
"The global economy faces many challenges, and markets are unlikely to rise smoothly from here. In addition, the General Election may mean that political uncertainties in the UK will remain in the short term. However, the prospects for dividends remain encouraging, bolstered by the nature of the managers' global approach and supported by the company's strong revenue and capital reserves," Ivory said.
The chairman's remarks came as the investment company reported a total return for 2014 of 2.9%, a performance that lagged the 11.3% total return of the FTSE All World comparative index. The net asset value per share fell modestly to 243.7 pence from 247.0p on a fair value measure.
"In addition to the adverse effect from the change in the current value of the debenture, equity performance was held back in relative terms by modest exposure (relative to index weightings) to the low yielding US market, and significant exposure to the UK: nevertheless, the return was positive. This positioning increases the level and dependability of the company's sterling income, but has been unhelpful in capital terms over the year," Ivory said.
The Scottish American Investment Company shares were up 1.0% at 243.00 pence on Monday afternoon.
By Samuel Agini; [email protected]; @samuelagini
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