29th May 2014 10:41
LONDON (Alliance News) - Shires Income PLC Thursday said it had outperformed its benchmark over the course of its recently completed financial year, driven by its exposure to small companies and its overweight position in the aerospace and defence sector.
In a statement, Shires - which aims to provide shareholders with a high level of income, together with growth of both income and capital from a portfolio substantially invested in UK equities - reported an 11.5% increase in its net asset value per share in the year ended March 31, while the FTSE All-Share Index rose by 8.8%. The total return from the trust's share price was 14.0%.
Shires is managed by Aberdeen Asset Managers Ltd.
"The drivers of performance have been broadly spread throughout the portfolio. The holding in Aberdeen Smaller Companies High Income Trust PLC has again been beneficial as the share prices of smaller companies have risen more rapidly than those of larger companies. The portfolio is overweight the aerospace and defence sector and was rewarded with a pleasing gain from Cobham," Chairman Anthony Davidson said in a statement, referring to FTSE 250 technology firm Cobham PLC.
"Other positive areas included being underweight the mining sector and overweight life assurance, the latter allowed the portfolio to benefit from improving market conditions," Davidson said.
"There will always be companies that do less well in any portfolio. Last year the major supermarkets began to struggle in an increasingly competitive environment and the holding in [Wm Morrison Supermarkets PLC] in particular detracted from performance. The company has exposure to the utilities sector, regarding this area of the market as one where there are some attractive dividends," the chairman added.
However, Davidson said that dividend growth in the current year is expected to remain positive but to be below that of last year.
Nevertheless, Davidson said the trust remains "cautiously optimistic".
"As I have commented previously, the portfolio contains a broad spread of businesses with attractive medium and longer term prospects across many different industries. The investment strategy remains the same with a focus on ownership of businesses with sustainable competitive advantages and reliable management teams. These factors give us the confidence to be cautiously optimistic," the chairman said.
Financial Highlights
| 2014 | 2013 |
Net asset value total return | +11.5% | +29.1% |
Share price total return | +14.0% | +27.2% |
Benchmark total return | +8.8% | +16.8% |
Earnings per share (revenue) | 12.63p | 11.92p |
Dividend per share | 12.0p | 12.0p |
Dividend yield | 4.8% | 5.2% |
Total return assumes the re-investment of net dividends paid during the year. | ||
Shires Income shares were Thursday quoted at 255.32 pence, up 0.5%.
By Samuel Agini; [email protected]; @samuelagini
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Related Shares:
Shires Inc.CobhamMRW.LADN.L