Aberforth Geared Income : AGIT – annual results

Aberforth Geared Income has published its results covering the year to the end of June 2014. Over the year the total return on the company was 29.2% (well ahead of the return on the Numis Smaller Companies Index ex Investment Companies +20.3% and the FTSE All-Share Index +13.1%), the gearing effect of the company’s zero dividend preference shares pushed the return on the ordinary share net asset value to 41.9%. the discount closed a little and so the return to ordinary shareholders was 44.1%. The second interim dividend was increased by 7.85% plus a 1.2p special dividend. The cover on the ZDPs increased to 2.5x.

The manager’s report says that smaller small companies outperformed larger ones and value stocks outperformed growth stocks during the period – both these factors favoured Aberforth Geared Income’s portfolio. They note that both the M&A market and the IPO market have picked up over the past year – two companies in the portfolio were bid for and Aberforth Geared Income bought one IPO at launch and one that fell sharply after launch.

 

James Carthew
Written By James Carthew

Head of Investment Company Research

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