Over the six months to the end of March 2016, Lowland’s total return and that of its benchmark, the FTSE All Share Index, were both virtually unchanged with Lowland up 3.8% and the Index up 3.5%. The Company paid a first interim dividend of 11.0p at the end of April, and now declares a second interim of the same amount, payable at the end of July. Interim dividends in respect of the first half therefore amount to 22.0p, an increase of 10% over the corresponding period last year. Barring unforeseen circumstances, the Board’s intention is to pay a total dividend for this year of 45.0p up from 41.0p last year, an increase of 9.8%. The dividend has more than doubled over the last ten years.
The Company has agreed a change to the terms of the Investment Management Agreement with Henderson Investment Funds Limited, in terms of which no performance fee will be paid if there has been a decline in the Company’s net asset value over the three year period over which performance is measured. Previously performance fees would have been paid if the Company outperformed its benchmark, even if the net asset value declined in absolute terms. The change reflects investors’ concerns at performance fees being paid in periods of absolute decline in net asset value.
The largest positive contributions to performance came from Glencore, Irish Continental, Anglo American, RPC and Hill & Smith. These five stocks added 2.7% to the NAV. By contrast, holdings in Renold, Velocys, St Modwen, standard Chartered and Interserve took 2.4% off the NAV between them.
LWI : Lowland tweaks performance fee