(Alliance News) - Scottish American Investment Co PLC on Thursday said earnings decreased last year, but that it retains "great confidence" in its long-term strategy.
The Edinburgh-based trust, which targets dividend growth outperforming inflation and invests mainly in equity markets, said net asset value was 524.5 pence per share at December 31. This was up 9.5% from 479.0p at the end of 2022.
Shares in Scottish American were flat at 501.00 pence on Thursday morning in London.
The trust said its NAV total return for 2023 was positive 11.8%. This "did not keep up with global equities", however, with the FTSE All-World Index delivering a positive 15.7% return.
Regardless, Scottish American increased its full-year dividend by 2.0% to 14.10p per share from 13.82p, "extending the company's record of dividend increases to fifty consecutive years". This included a final payout of 3.80p per share, up 3.5% from 3.67p.
Earnings per share decreased to 13.48p from 13.82p. Moreover, Scottish American acknowledged that last year's dividend growth was "modest" compared with its 9.0% growth the prior year.
It also did not match the UK's 4.0% annual rate of consumer price inflation, as announced by the Office for National Statistics in January.
"One of the factors in the board's thinking, gaining comfort with paying a slightly uncovered dividend, was the outlook for 2024 and beyond," Scottish American explained.
The trust said it continues to believe that "a long-term approach based on investing globally for sustainable growth is the best route to achieving [our] aims". It added that "we are encouraged that the managers have continued to find new and attractive opportunities.
"We retain great confidence in the managers, and this confidence has been further strengthened by the operational performance of [our] holdings over the past year," Scottish American continued.
The company also said that although the global economy's "recent resilience" was "encouraging", the full impact of past interest rate hikes "has yet to work its way through the system. As it does, growth could become more challenging and corporate results may fall below expectations."
By Emma Curzon, Alliance News reporter
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