Baker Steel Company Research (BSRT)

The board of Baker Steel Resources Trust (BSRT) has announced a new capital allocation policy targeting a 5% return of capital per year. This is intended to be delivered through an annual dividend equal to 3% of NAV (paid semi-annually out of capital and/or from net income after operating expenses), with the balance allocated to buybacks or further dividends. BSRT intends to declare an interim dividend commencing in September 2026 and then in April 2027 from FY26 audited results. The board expects the dividend to become progressive once royalty income streams from its portfolio commence. Furthermore, BSRT committed to allocate at least 50% of profits from significant asset realisations to return of capital, either through a tender offer (if BSRT’s discount to NAV exceeds 25%, and subject to a sufficient cash level) or through enhanced share buybacks or dividends. The revised capital allocation policy is subject to the board’s full discretion considering factors such as BSRT’s discount to NAV (currently at 22%), the overall liquidity of BSRT’s portfolio, as well as follow-on funding requirements of its portfolio companies.