LONDON (Alliance News) - TR European Growth Trust PLC on Thursday said it had lagged behind its benchmark in its most recent year due to a poor performance in its final quarter, but will increase its total dividend by 31% nonetheless.
In the financial year to June 30, the investment trust's net asset value total return was 0.6%, well behind the 6.9% return of its Euromoney Smaller European Companies Index benchmark, which excludes the UK.
Three key stocks weighed down the trust's performance: Italian clothing retailer OVS SpA, French flash sale site SRP Groupe SA, and Belgian medical equipment maker Ion Beam Appliances SA.
TR European has added to its Ion Beam exposure, maintained its holding in OVS, and disposed of its SRP interest.
Nonetheless, a final dividend of 14.00 pence is to be paid for its financial 2018 year, up 22% from an 11.50p dividend the year before. This will bring the trust's total annual dividend to 19.00p, 31% above its 14.5p total the prior year.
The company's net asset value per share as at June 30 was 1,146.70 pence, up just 0.1% from 1,145.48p the year before.
TR European's pretax profit was GBP11.0 million, substantially below its GBP200.4 million profit the year prior. This was because the trust swung to a GBP1.1 million loss on a capital return basis from a GBP191.0 million profit.
"It has been a more challenging year for the company compared to last year, with a dip in performance and the discount widening from 6.5% at the start of the year to 11.0% by June 30," said TR European Chairman Audley Twiston-Davies.
"However, the European smaller companies area of the stock market remains filled with opportunity despite a backdrop of noisy, high-conflict politics within Europe and beyond," Twiston-Davies added.
Shares in TR European were down 3.4% at 871.00p on Thursday.