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(Alliance News) - Scottish Investment Trust PLC on Monday increased its second quarterly dividend after a good first-half performance as it continues to execute its investment strategy focused on depressed valuations.
The Edinburgh-based investment trust reported positive results for the first half of its financial year, ended April 30. Net asset value total return for the first half of the financial year was 851.6 pence, up 14% from 755.5p on October 31, 2020.
Share price total return jumped 16% as its share price increased to 780.0p at April 30, from 681.0p a year prior. Scottish Investment Trust shares were trading up 1.4% at 810.27 pence each in London on Monday morning.
The FTSE 250-listed company noted that its MSCI All Country World Index performance rose by 19% in its first half.
The trust declared a second quarterly dividend of 5.8p per share, bringing the total payout for the year so far to 11.60p, up from 11.40p a year ago.
The company capitalised on depressed valuations to low value buy stocks in line with its investment approach. The trust added several hospitality and retail companies to its portfolio including: GBP4.5 million invested in US restaurant group Cheesecake Factory; GBP3.0 million in theme park operator Six Flags Inc; and GBP4.0 million in fashion retailer Capri Holdings Ltd, which owns Michael Kors, Versace and Jimmy Choo.
The trust's largest gain came from shares in BT Group PLC, where its holding value increased by GBP9.3 million, as transparency on fibre regulation and the improved economic outlook supported a rebound for the British telecom company. Meanwhile, the investor was disappointed by the poor performance of gold miners, which remain a portfolio staple.
Scottish Investment Trust Chair James Will said its portfolio was well positioned for the coming years where it foresaw a "new economic regime" of increased government intervention and strong central bank support that could boost incomes and potentially spur inflation.
"This could create an environment more favourable to the areas of the market that have been unloved in recent years. Despite the recent narrowing of the dispersion of valuations within the market, the gap between the most and least expensive stocks remains high," Will added.
By Scarlett Butler; scarlettbutler@alliancenews.com
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