(Alliance News) - TR European Growth Trust PLC on Tuesday increased its dividend as it outperformed its benchmark for the first half of its financial year.
For the six months to the end of December, the investment trust recorded a net asset value total return of 5.9% compared to a return of 4.0% from the Euromoney Smaller European Cos Index (excluding UK) in sterling terms over the same period.
Net asset value per share as at December 31 was 1,085.80 pence, an increase from 1,039.79p as at June 30. TR European's share price at the end of the period was 970.50p, reflecting a discount to net asset value of 11%.
Shares in the Europe-focused investment company were down 0.3% at 897.34p each on Tuesday afternoon in London.
TR European declared an interim dividend of 7.80p per share, up from 7.50p declared the year prior.
The company said it made a good start to its current financial year ending June despite challenges such as slowing global growth, the Sino-American trade war, and Brexit. It said performance was driven by a combination of some of its undervalued stocks rerating as well as growth in other holdings.
Looking ahead, Chair Christopher Casey said: "The economic backdrop remains sluggish and uncertain, albeit there are indications that things might improve. The Sino-American trade war seems to be less antagonistic which should offer relief to Europe where the economy is driven by global economic growth. Brexit stagnation appears to be lifting which should offer a further boost."
"In this context it is pleasing to see the upturn in performance in recent months and we remain optimistic that our managers can continue to find undervalued companies in which to invest the company's capital," he added.
However, the trust added: "The coronavirus has created huge uncertainty for the global economy. We are unsure how long the impact will last. It seems reasonably certain that the first half of the calendar year will be weak; understandably leading to ever lower bond yields and a flight to safety. If the health scare can be contained in the coming weeks, we might see a v-shaped recovery and a rapid reversal in market leadership".
By Ife Taiwo; ifetaiwo@alliancenews.com
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