The Establishment Investment Trust has published results for the year ended 31 March 2016. Measured by total return, the Net Asset Value (NAV) fell by 4.5% while the share price declined by 10.9% for the financial year to 31st March 2016. For comparative purposes, the FTSE WMA Stock Market Balanced Index declined 0.5%, the FTSE100 fell 5.3%, the MSCI AC World Index slipped 1.4%, the MSCI Japan Index lost 4.2% and the MSCI AC Asia ex Japan Index declined 9.1%. The discount stood at 28.0% at year end.
The Board is concerned by the persistent wide discount and lack of liquidity in the Company’s shares. This may reflect negative investor sentiment toward Asia and emerging markets as well as recent indifferent returns. The Board has no powers to buy back stock nor is a tender offer viable. Consequently, the Board proposes a final dividend of 3.2p lifting the total dividend to 5.1p for the financial year, a 4.1% increase over the previous year and consistent with the company’s progressive dividend policy. In addition, the Board proposes a special dividend of 3.9p, which will be paid from capital reserves. This will lift the total cash distribution to shareholders to 9.0p for the financial year, – a yield of 5.8% on the share price at year end. While no specific commitment can be made to repeat such special distributions, shareholders should note that the special dividend has been set at a level that the Board believes could be repeated while still allowing the Company to grow over time.
There is no information on which stocks contributed or detracted from returns in the report.
ET. : Establishment hikes dividend as alternative to buybacks