The SME Loan Fund has produced its first set of results, covering the period from launch until 30 June 2016. The Group’s NAV at 30 June 2016 was GBP53.4 million (101.31p per Ordinary Share) compared to GBP51.7 million (98.15p per Ordinary Share) at launch. The total return for the Group for the period was 7.1% on the opening NAV. Total earnings per Ordinary Share from listing to 30 June 2016 were 6.94p. The Company elected to designate all of the dividends for the period ended 30 June 2016 as interest distributions to its Shareholders. In doing so, the Company took advantage of UK tax treatment by “streaming” income from interest-bearing investments into dividends that will be taxed in the hands of Shareholders as interest income. The Company announced dividends of 4.95p per Ordinary Share for the period ended 30 June 2016.
They say that income production within the company has been in line with expectations In the Prospectus they advised that they were targeting a net dividend yield of 8% per annum. Although it is still early in the fund’s life, if they were to continue to pay dividends of 0.6p per month, on the issue price of 100.00p the yield would be 7.2%.
The fund remains unleveraged and this stance is likely to continue for the foreseeable future. Throughout the period the Company has pursued a policy of hedging all non-sterling exposure back into sterling.
They say their impairment rate is one of the lowest within the asset class.
SMEF : SME Loan Fund running at 7.2% yield on issue price