Dividend Declaration

RNS Number : 8880O

Investors Capital Trust PLC

06 July 2010

 



TO:                  RNS

FROM:            Investors Capital Trust plc

DATE:             6 July 2010

DIVIDEND

As noted in the Chairman's Statement contained in the 31 March 2010 annual financial statements, the Board of Investors Capital Trust has been keeping under close review the current level of the Company's dividend in view of what has been a challenging backdrop for income investors. The Company was launched relatively recently (2007) and consequently has a limited revenue reserve available, approximately one-third of which was used in the year to 31 March 2010. As a result of the cumulative impact of dividend cuts during the economic downturn, most notably from the banking sector, together with the recent dividend suspension by BP and also falling corporate bond yields, the Board has determined that it is prudent to revise with immediate effect the Company's dividend level.

The dividend for the year ending 31 March 2011 is estimated, barring unforeseen circumstances, to be 4.28p per share (2010 - 5.35p). The first three quarterly dividends will be paid in equal instalments of 1.06p per share and a fourth quarterly dividend of 1.1p will be paid to A shareholders. B Shareholders will receive capital distributions of the same amount per share at the same time as A shareholders.

Accordingly, the Board is today announcing a first quarterly dividend of 1.06p per share on the A shares of the Company.  This dividend will be paid on 6 August 2010 to A shareholders on the register on 16 July 2010.  A first quarterly capital distribution of 1.06p per share will be paid on the B shares of the Company on 6 August 2010 to B shareholders on the register on 16 July 2010.

The Board recognises the importance of distributions for shareholders but needs to balance the income capable of being earned from portfolio holdings with maintaining the Company's existing investment approach and other objective of providing prospects for capital growth. The Directors continue to believe that the yield on the Company's shares, relative to that available from the stockmarket as a whole, will remain attractive for investors.

The revised annual distribution level represents a yield for A shareholders of 5.4% and for B shareholders of 5.4% based on the A share price of 78.75p per share and B share price of 79.5p as at 5 July 2010. For those shareholders that hold units (each comprising 3 A shares and one B share) the distribution yield on this unit holding was 5.3% based on a unit price of 320.5p as at 5 July 2010. These yields compare favourably with the yield on the FTSE All-Share Index of 3.4% at that date. 

The investment policy and approach adopted for the Company has resulted in outperformance, in total return terms, compared to the benchmark index. Since the Company's launch in February 2007 to 30 June 2010, the net asset value per share/unit has declined by 6.4% and this compares with the 8.3% decline in the FTSE All-Share Capped 5% Index.

For further information contact:

Martin Haldane, Chairman   0131 718 1000

Rodger McNair, Fund Manager  07736 101 809

 

END

 

 

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