Finsbury Growth lags benchmark, adopts enhanced dividend policy

Thu, 28th May 2026 11:39

(Alliance News) - Finsbury Growth & Income Trust PLC on Thursday said its interim return underperformed its benchmark index, but expressed confidence that AI will serve as a value enhancer rather than a threat.

The Edinburgh-based investment firm, which mainly targeting UK companies, reported a net asset value per share total return of minus 14.4% for the six months ended March 31, while its benchmark, the FTSE All Share Index, rose by 8.9% over the same period.

The investment trust said the underperformance reflected "continued challenges" in part of the UK market most relevant to its investment style.

The biggest drag on performance during the interim period came from the fund's data, software and platform holdings, with Finsbury citing Experian PLC, London Stock Exchange Group PLC, Relx PLC, Rightmove PLC, Autotrader Group PLC and Sage Group PLC.

The investment trust tied sell-offs in these equities to investor concerns that AI will hamper the "currently highly successful businesses". However, Finsbury said its view is "diametrically opposed", with it anticipating these companies become beneficiaries of AI as opposed to victims.

NAV per share at March 31 was 780.3 pence, down 16% from 923.0p at September 30. Finsbury Growth said absolute returns were "disappointing", but noted that shareholders benefited from a "modest contraction" in the discount to NAV.

The company noted the discount narrowed to 6.4% at March 31 from 6.7% at the beginning of the financial year.

Shares in the investment trust were down 0.1% at 754.00 pence on Thursday morning in London.

Back in March, the company declared a first interim dividend of 8.8p per share, flat with the prior year, and anticipates declaring and paying a second interim dividend in the autumn.

The company on Thursday said it has adopted an enhanced dividend policy, following a review, effective from October 1 this year. Under this policy, the company said annual dividends will grow by at least - 50% from approximately 20 pence to 30 pence, lifting the current yield to 3.9% from around 2.6%.

"While recent performance has been disappointing, we are seeing early signs of stabilisation and remain firmly committed to the portfolio manager's disciplined, long-term approach focused on high quality businesses with resilient franchises and hard-to-replicate data assets, where we believe AI will prove an enhancer of value rather than a threat," said Chair Pars Purewal.

"Against a backdrop of compelling UK valuations, our confidence in the company's prospects is growing, and the Board remains committed to doing whatever it takes to improve shareholder outcomes through disciplined investing, active balance sheet management, an enhanced dividend policy and careful discount management."

By Christopher Ward, Alliance News reporter

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