Register Log-in Investor Type

News

Aberdeen Standard Equity Income Trust just missed the benchmark for the year

Aberdeen Standard Equity Income Trust just missed the benchmark for the year

Aberdeen Standard Equity Income Trust just missed the benchmark for the year- Aberdeen Standard Equity Income Trust (ASEI)  says its net asset value return was 5.5% which just missed the benchmark which was 5.9%. Earnings per share were 22.06p which is up 14.7% compared to last year’s figure of 19.23p. Dividends for the first three quarters were 13.7p per share which is an increase of 18.1% for the same period in 2017. The board is recommending a dividend for the fourth quarter of 5.5p which will bring dividends for the year to 19.2p which an increase of 12.3% for the year. The board expects the dividend for 2019 to be at a minimum of 20.2p which is an increase of 5.2% compared to this year.

Aberdeen Standard will repay there funding of £30m from Scotiabank ltd on 17 December 2018. The board has decided that they should refinance the funding with a £40m facility from Banco Santander at rate of !% over LIBOR. The facility is for 5 years with a possible addition of £20m should the board think that is needed.

Aberdeen Standard has also announced a change in the name from “Standard Life Equity Income Trust plc” to Aberdeen Standard Equity Income Trust” which also changes the ticker from SLET to ASEI.

Despite the uncertainty in the markets Aberdeen Standard still believes that they can produce long term returns and sustainable dividend growth in the future as long as they keep carefully and skilfully pick stocks.

Extract from Thomas Moore’s manager’s statement

At the sector level, Financial Services was the biggest single contributor to performance during the period. The portfolio’s holdings in small cap asset management companies Premier Asset Management and AFH Financial Group were among the biggest stock contributors as the market responded to evidence of sustained growth in assets under management. Both stocks highlight the potential of our index-agnostic approach to broaden the investment universe and in so doing identify attractively valued, high growth smaller companies. Also within this sector, performance benefited from our holding in infrastructure business John Laing Group whose NAV growth surpassed expectations.

The portfolio benefited from its holding in cinema operator Cineworld whose shares soared on encouraging results that appeared to vindicate the recent acquisition of Regal Entertainment. The US business grew revenues and earnings at a double-digit pace, resulting in substantial upgrades to analyst forecasts.

The holding in small cap natural gas producer Diversified Gas & Oil contributed to performance as the share price responded positively to results highlighting stronger than expected production and cash generation. Management’s focus is on acquiring and managing producing assets, rather than exploring and drilling. This provides far greater visibility on dividend-paying ability than other listed oil and gas companies.

The largest detractor to performance during the period was inter-dealer broker TP ICAP whose share price was hit by a downgrade in guidance on cost synergies from the recent merger between Tullett Prebon and ICAP’s voice broking business. This does not change the logic of the merger which makes TP ICAP the market leader with very strong cash generation potential. We therefore added to our holding.

Performance was also hit by the holding in software business Micro Focus whose shares slid after a profit warning attributed to operational issues relating to its acquisition of HPE Software. We retained the position as we saw this as a short-term hiccup and continued to believe that Micro Focus has the ability to identify attractively valued legacy software businesses, stabilise profitability and return cash to shareholders.

The holding in Saga dragged on performance after it issued a disappointing trading update in which management pointed to lower customer retention because of more competitive insurance markets. We added to our holding as we believe that Saga’s gradual diversification of revenues away from insurance and towards travel will harness its strong brand by cross-selling products to existing customers.

Performance was also hit by the holding in annuities business Just Group whose shares fell on fears of higher capital requirements following the publication of a Prudential Regulation Authority (PRA) consultation paper aimed at developing the regulatory approach to the equity release mortgage sector.”

ASEI- Aberdeen Standard Equity Income Trust just missed the benchmark for the year

Leave a Reply

Your email address will not be published. Required fields are marked *

Please review our cookie, privacy & data protection and terms and conditions policies and, if you accept, please select your place of residence and whether you are a private or professional investor.

You live in…

You are a…