Premier Energy & Water’s results for the six months t the end of June 2016 show that its portfolio recorded a total return including income received of 10.1%. This was below the FTSE All-World Utilities Index which delivered a total return in sterling of 27.1%. Unlike the fund, the global utilities index has a high weighting (54% at June 2016) to US utilities, which performed spectacularly in the half, delivering a total return in sterling of 37.1%, benefiting from the “lower for longer” expectation of the future path for US interest rates. The NAV of the ordinary shares gained 11.4%. Including dividends the net asset value total return to an ordinary shareholder was 16.3%.
On 28 April 2016 the Company announced the first quarterly dividend of 1.90p per ordinary share in respect of 2016, unchanged on the base dividend paid on the equivalent period in 2015, which was paid on 30 June 2016.
On 28 July 2016 the Company declared a second interim dividend for the 2016 financial year of 1.90p again unchanged on the base dividend paid for equivalent period of 2015.
The policy of paying additional dividends of 0.75p per quarter, in order to run down the Company’s historic revenue reserves, ended on 31 December 2015 with a final additional dividend of 0.75p declared on 2 February 2016 and paid at the end of March 2016 alongside the 4.00p 4th interim dividend paid in respect of 2015. In total, additional dividends of 8.25p per Ordinary share have been paid to shareholders since the policy was implemented in the second half of 2013.
In February, in light of the refinancing of the Company’s ZDP shares at the end of 2015, and consequent reduction in gearing, the Board took the opportunity to update the market on its expectation for dividends in 2016. Following a review of both PEWT’s portfolio and also capital structure, it was announced that a dividend of at least 8.00p per Ordinary share was expected to be paid in respect of the 2016 financial year. At the interim stage earnings per share were running ahead of our projections made at the start of the year so they believe that the Company is well placed to meet or exceed the 8.00p per Ordinary share dividend target.
In recent years, PEWT’s revenue earnings have been weighted approximately 65% to 70% to the first half of the year. The post Brexit fall in sterling will have a beneficial effect on the sterling value of foreign currency income received in the second half, but, assuming exchange rates remain at current levels, will have a more significant impact in 2017.
PEW : Premier Energy & Water on track to exceed dividend forecast