The Investment Company’s annual report for the year ended 30 June says the NAV of the Company fell slightly from 394.41p to 389.34p, a reduction of 1.3%. The return to shareholders, including the dividends paid during the year, totalled 16.9p. The FTSE All-Share Index generated a total return of 2.6% over the twelve months to June 2015. Returns in smaller quoted indices were mixed with 8.4% achieved on the FTSE SmallCap (excluding Investment Companies) including dividend income whilst the total return on the AIM All-Share Index was down 2.5%. The total return on the FTSE Actuaries Government Securities UK Gilts All Stocks Index was 5.3% over the same period.
The Board is adjusting the dividend policy of the Company to make it more sustainable. Rather than have dividend payments that fluctuate up and down every year in line with the changes in the NAV at the end of June, the new policy will take the dividend in the first year after reorganisation, which amounted to 20.7p, and seek gradually to grow it going forward. It is anticipated that the first interim dividend in the new financial year will be 5.0p (5.5p last year). Any growth in the dividend beyond 20.7p will be reflected in the quantum of the fourth interim dividend.
The greatest contributors to the positive returns in the year were Friends Life and BRIT on their agreed takeover offers. Conversely, the stocks where the share prices fell back were dominated by Gable Group, where this growing business needed to increase reserves after a large fire claim from a customer in France. The share price in DX Group and Juridica also fell back, but to a lesser degree.
INV : The Investment Company hit by holding in Gable Group