LONDON (Alliance News) - Scottish Investment Trust PLC on Monday reported a drop in net assets for the financial year ended October 31 as the trust underperformed a comparative benchmark but increased its payout.
At October 31, the FTSE 250-listed trust's net asset value per share with borrowings at amortised cost stood at 926.8 pence compared to 956.8p the year before, a 3.1% decrease over the year.
Scottish Investment Trust's NAV per share,with borrowing at market value decreased 2.6% to 900.1p at the end of the financial year, compared to 924.4p at the beginning of the period.
The NAV total return with borrowings at amortised cost was 0.4%. With borrowings at market value, total return was 1.1%.
The trust noted it does not have a formal benchmark but offered the international MSCI All Country World Index by way of comparator, which had a total return of 3.4% in the period. The UK-based MSCI UK All Cap Index total return was negative 1.3%.
Scottish Investment Trust's net assets decreased 5.9% in the period to GBP715.3 million from GBP760.4 million.
The trust's biggest positive contributor was US department store Macy's Inc, which added GBP12.1 million to the portfolio, after better-than-expected results. US pharmaceutical giant Pfizer Inc added GBP6.5 million in the period, after the firm was revalued by investors due to its "promising pipeline".
US retailer Target Corp added GBP4.9 million to the trust's portfolio. Scottish Investment Trust said it believes the "pessimism surrounding long-established retailers had reached a crescendo, creating 'ugly duckling' opportunities".
European banks weighed most heavily on the Scottish Investment Trust portfolio. ING Groep NV lost Scottish Investment Trust GBP8.7 million in the year with Standard Chartered PLC losing GBP7.0 million and BNP Paribas SA losing GBP4.9 million.
Scottish Investment Trust said "uncertain European politics and concerns regarding emerging markets" weighed in the banks.
The trust increased its total dividend for the year by 6.0% to 21.2p from 20.0p paid out the year before. The trust also paid out a special dividend of 4.0p, down 20% from last year's special dividend of 5.0p.
Scottish Investment said it is targeting three quarterly interim dividends of 5.3p in the next financial year, plus a final dividend of at least 5.3p.
Chairman James Will said: "The larger-than-usual number of risks, combined with the strong performance of equities in recent years, mean that the company currently has a cautious view about the short-term outlook for markets."
Shares in Scottish Investment Trust were down 0.1% on Monday morning at 791.00p each.
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