(Alliance News) - Aberdeen Standard Equity Income Trust PLC said it lagged significantly behind its benchmark in its most recent financial year, with "several serious disasters" in terms of stock selection.
For its financial year ended September 30, the equity investor's net asset value total return was negative 10.8% while its benchmark, the FTSE All-Share Index, posted a positive 2.7% total return.
"This is a very poor result and there is no point in pretending otherwise," said Chair Richard Burns.
Burns explained that the firm's portfolio is domestically-oriented and overweight in mid and small cap stocks, which hurt its performance compared to an index driven by large capitalisation stocks.
Moreover, he said the firm had suffered "a significant negative contribution from stock selection, largely the result of several serious disasters" including its investment in Kier Group PLC and Staffline Group PLC which were not offset by any major successes.
Kier and Staffline both announced rights issues in the period, Staffline's following a profit warning.
"These results mean that our long-term performance numbers, which have for several years been running ahead of our benchmark, are now lagging significantly," said Burns.
NAV per share fell 15% to 411.83p on September 30 from 485.02p the year before.
The company raised its total dividend per share for its year by 6.8% to to 20.5p from 19.2p. This is the nineteenth year in a row that Aberdeen Standard Equity has raised its annual dividend, and it aims to increase the dividend for the twentieth time in its next financial year.
Looking ahead, the firm hops to put the "severe disappointment" of 2019 behind it and is hoping for a more rewarding financial 2020.
Shares in Aberdeen Standard Equity were up 3.4% at 401.00p in London on Wednesday.
By Anna Farley; annafarley@alliancenews.com
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Staffline (STAF)
Kier (KIE)