26th Nov 2015 11:32
LONDON (Alliance News) - Troy Income & Growth Trust PLC on Thursday took note that the yield on its shares of 3.4% was below the 3.7% of the FTSE All-Share Index, which it said was at odds with the intention of delivering a "yield premium".
Chairman David Warnock said the status of its yield was due to two factors.
"Firstly, the strong price performance of the company's shares (positive 8.0% capital return) when compared to the decline in the level of the FTSE All-Share Index (negative 5.6% capital return); and secondly a more modest growth of the company's dividend (positive 4.5%) in relation to the estimated growth of the market dividend (positive 8.5%)," Warnock said.
"The board believes that, in due course, the company's yield premium will be re-established as distributions from the wider market come under increasing pressure from a number of high profile dividend cuts. It is the board's intention, barring unforeseen circumstances, at least to maintain the quarterly dividend rate of 0.60p per share for the full year to September 30, 2016," Warnock said.
The trust's net asset value total return was positive 11.2% in the year ended September 30, while the share price total return was positive 11.7%. In that time the FTSE All-Share Index was down 2.3% on a total return basis.
"In the last year good progress has been made in enlarging the company's net assets, increasing the dividends paid to shareholders and maintaining a strong record of investment performance," Warnock said.
"The investment outlook remains uncertain and as the portfolio is predominantly made up of equities, shareholders should expect to experience some volatility in the event of equity market weakness. However, the defensive characteristics of many of the investments should enable the manager to take advantage of opportunities arising as a result," Warnock said.
Troy Asset Management manages the trust.
Shares in the trust were up 0.1% at 72.07 pence on Thursday.
By Samuel Agini; [email protected]; @samuelagini
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