Interim Results – Six Months to 30 April 2018
The Scottish Investment Trust (The Scottish) announces today its results for the six months to 30 April 2018. The share price total return was +1.7% and the net asset value (NAV) total return (with borrowings at market value) was +1.8%. The Scottish does not have a formal benchmark but, by way of comparison, the sterling total return of the international MSCI All Country Index (ACWI) was -0.1% while the UK based MSCI UK All Cap Index total return was +2.2%. The first quarterly dividend for this fiscal year of 5.0p per share was paid in May and the Company has announced today 5.0p for the second quarter, payable in August.
For full interim results detail, Chairman’s Statement and Manager’s Outlook, read the results announcement.
Last year, there was a step change increase in the total regular dividend to 20.0p per share (a 48% increase from the 13.5p paid in the previous financial year) as well as the announcement of a shift to quarterly dividend payments. Following this step change increase, the Company has one of the highest stated dividend yields among its global investment trust peer group. The Scottish has increased its regular dividend for the last 34 years and has either grown or maintained that dividend since at least the Second World War. A key objective remains to achieve dividend growth ahead of UK inflation.
The Scottish has seen a number of changes in recent years, the goal of which is to continue to provide an attractive, low cost investment vehicle for shareholders, who are mainly, and increasingly, individuals. Among the key changes have been the introduction of a high conviction, global contrarian investment approach and the restructuring of operations to deliver a more efficient and cost-effective structure.
Manager, Alasdair McKinnon commenting further said:
“As contrarian investors, we do not attempt to follow investment fashions and instead seek investments where we can see long term upside. We look for unpopular areas because this is where the balance between risk and reward can be most favourable. Chasing momentum works, until it doesn’t. Investors are currently exhibiting remarkably low levels of scepticism about ‘hot’ investment themes, particularly in the technology area, which reminds us of the bubble era of the late 1990’s.”
The approach to investor communications has also continued to be reinvigorated with the objective of engaging investors with The Scottish’s distinctive investment style whilst stimulating additional demand for the Company’s shares to help manage the discount to NAV. Work in this area was recently recognised by The Association of Investment Companies (AIC), with The Scottish announced as winner of the AIC Shareholder Communications Award for Best PR Campaign in May 2018.
The Company’s discount policy aims, in normal market conditions, to maintain the discount to NAV (with borrowings at market value) at or below 9%. The average share price discount to NAV over the six-month period was 8.3%.
Commenting on the results, James Will, Chairman of The Scottish said:
“I am pleased to report another period of positive total returns over the six months to 30 April 2018. The Board is also pleased with the progress made to transform the investment approach, to increase the regular dividend and to improve the profile of the Company. It believes that The Scottish is differentiated, cost competitive and an attractive investment vehicle focused on delivering above-average returns and dividend growth over the longer term.”
Please remember that past performance may not be repeated and is not a guide for future performance. The value of shares and the income from them can go down as well as up as a result of market and currency fluctuations. You may not get back the amount you invest.