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(Alliance News) -Â Utilico Emerging Markets Trust PLC on Monday aimed to "reassure" shareholders over its dividend amid recent declines in equity markets.
The firm noted recent stock market volatility and said that, in common with other emerging market funds, its portfolio has been impacted.
"The board would like to re-emphasise that UEM's portfolio is predominantly invested in relatively liquid, cash-generative companies with long-duration assets that the company's investment managers believe are structurally undervalued and offer excellent total returns," said Utilico.
In light of current uncertainty, the firm said it is unclear to what extent the earnings and dividends of its portfolio companies will be affected.
Utilico said it "appreciates the importance investors place on dividend certainty" and as an investment trust, it will distribute at least 85% of its distributable income earned, each financial year, by way of dividends. The company has the flexibility to pay dividends from capital reserves, it added.
"The board would therefore like to reassure shareholders that, in the event of any short term weakness in portfolio income, the board intends to maintain its quarterly dividend at the rate of 1.925p per share for the fourth quarter of the current financial year and for the remainder of the 2020 calendar year, utilising its revenue reserves and, if necessary, its capital reserves," it said.
Four quarterly dividends amount to 7.70 pence per share a year, equivalent to a yield of 4.8% based on a share price of 160.00p, the firm highlighted.
Shares closed down 2.4% at 165.50p in London on Monday.
By Lucy Heming;Â lucyheming@alliancenews.com
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