Interim Management Statement

RNS Number : 2814P

Securities Trust of Scotland PLC

15 August 2014

 



SECURITIES TRUST OF SCOTLAND PLC

INTERIM MANAGEMENT STATEMENT

COVERING THE PERIOD FROM 1 APRIL 2014 TO 30 JUNE 2014

Manager's commentary

Global equity markets rose in aggregate over the quarter. The MSCI World High Dividend Yield index gained 3.0% in sterling terms. Japan was the strongest region, and Pacific ex Japan the weakest. Energy was the best-performing sector, while industrials fared the worst.

The Company's NAV rose by 1.6% during the period, lagging its benchmark. The biggest detractor from performance was Pfizer. The US pharmaceutical giant publically declared an interest in AstraZeneca but the bid was rejected. Not owning the US quoted semiconductor chipmaker Intel was a notable negative during the period as it had higher than expected PC unit demand. Shares in the US household-goods firm Procter & Gamble fell after data emerged showing weakness in certain home and personal care categories where P&G is involved. Swiss healthcare name Roche was another notable detractor during the period.

On the other side, not owning US telecoms firm AT&T during part of the period had a positive effect on relative returns as the firm reduced its earnings per share guidance. Luxury fashion brand Hugo Boss also did well. French oil multinational Total was a strong performer on the back of recent expenditure and high-margin barrels coming on stream. Direct Line Insurance Group was another notable positive during the period.

In terms of portfolio activity, we switched out of one US telecoms giant (AT&T) into another (Verizon) during the period, attracted by the relative valuation and growth prospects of the latter. We also exited positions in French bank BNP Paribas and Spanish telecommunications firm Telefónica. We bought German quoted media conglomerate Prosiebensat.1.

Alan Porter

PROFILE

Objective            To achieve rising income and long-term capital growth by investment in global equities

Benchmark         MSCI World High Dividend Yield index

Sector                   Global equity income

Launch                  28 June 2005

PORTFOLIO

Sector allocation

                                                           31 Mar                       30 June

Healthcare                                        20.9%                      20.3%

Consumer staples                          15.3%                      16.8%

Energy                                                14.4%                      15.9%

Financials                                          14.3%                      14.1%

Consumer discretionary             11.8%                      14.0%

Telecommunications                   10.9%                      7.1%

Materials                                              5.3%                      5.9%

Industrials                                           4.5%                      4.6%

Utilities                                                 3.9%                      4.2%

Information technology                1.8%                      1.8%

Cash                                                       2.7%                      1.0%

Gearing                                             (5.8%)                      (5.7%)

Regional allocation

                                                           31 Mar                       30 June

Europe                                              53.8%                       55.5%

North America                               39.0%                       39.0%

Asia Pacific ex Japan                      6.2%                       6.1%

Japan                                                    2.6%                       2.7%

Emerging markets                           1.5%                       1.4%

Cash                                                      2.7%                       1.0%

Gearing                                            (5.8%)                       (5.7%)

Top 10 holdings (42.8% of total portfolio)

Roche	6.3%
Chevron	5.1%
Total	4.9%
Pfizer	4.3%
Sanofi	4.2%
Royal Dutch Shell	3.8%
Philip Morris International	3.8%
Abbvie	3.7%
British American Tobacco	3.6%
McDonald's	3.1%
Number of holdings	43
Number of countries	12

Key facts

Total net assets                                            £175.2m

Share price (p)                                             141.0

Net asset value per share (p)                143.3

Discount (premium)                                  1.6%

Historic net yield                                        3.4%

Source for historic yield: State Street as at 30 June 2014. 

The historic yield reflects dividends declared over the past 12 months as a percentage of the mid-market share price, as at the date shown.  Investors may be subject to tax on their dividends.

PERFORMANCE

Discrete performance over 12 months to 30 June

                            2014       2013       2012       2011       2010      

Share price       (1.6%)   26.1%    9.7%      37.5%    16.9%     

NAV                     5.4%      22.3%    2.1%     32.2%    25.8%     

Benchmark       9.9%      21.3%     3.6%     25.6%    21.1%   

Cumulative performance over periods to 30 June 2014

One month

Three months

Six months

One year

Three years

Five years

Share Price             (3.8%)         (1.7%)       (1.2%)       (1.6%)       36.2%       118.8%

NAV                          (0.4%)         1.6%          1.7%          5.4%          31.7%       119.0%

Benchmark             (0.6%)         3.0%          5.1%          9.9%          38.1%       110.2%

Source: Martin Currie and Morningstar. Bid to bid basis with net income reinvested over the periods shown in sterling terms. These figures donot include the costs of buying and selling shares in an investment trust. If these were included, performance figures would be reduced.

Prior to 1 August 2011, the Trust's benchmark was the FTSE All-Share index and the MSCI World High DividendYield index thereafter.

Past performance is not a guide to future returns.

Capital structure

Ordinary shares 122,299,148

Board of Directors

Neil Donaldson (chairman)                               

Andrew Irvine

Edward Murray                                                       

Rachel Beagles

Angus Gordon Lennox

Material events

The results for the year ended 31 March 2014 were announced on 6 June 2014.

The fourth interim dividend for the year to 31 March 2014 of 1.35p per share was paid on 4 July 2014 to shareholders on the register on 20 June 2014 making a total for the year of 4.8p.

Website

The trust has its own website at www.securitiestrust.com. There you will find further details about the trust, information on Martin Currie, daily share prices (and associated risks), and you can access regular videos by the manager.

Key information

Year end                                                                                              31 March

Annual general meeting                                                                              July

Interim dividends paid                                                                 March, July, September, December

Investment management fee as at 31 March 2014†          0.6%

Ongoing charges ratio 31 March 2014*                                   1.0%

TIDM code                                                                                          STS

Reuters code                                                                                     STS.L

†Martin Currie is paid an investment management fee of 0.6% of NAV of the company per annum, payable quarterly.

*Percentage of shareholders' funds. Includes annual management fee.

Net asset value and dividend history

As at	Share	NAV	Discount/	Dividend
31 March	price	per share	(premium)	per share

2006                   125.5p         135.6p            7.4%                   2.85p

2007                   141.3p         148.4p            4.8%                   5.05p

2008                   116.0p         121.5p            3.8%                   5.45p

2009                   66.3p           75.4p              12.2%                5.45p

2010                   99.0p           109.4p            9.5%                   4.65p

2011                   108.0p         117.4p            8.0%                   4.65p

2012                   122.0p         119.8p            (1.9%)               4.70p

2013                   146.3p         141.8p            (3.2%)               4.75p

2014                   144.8p         141.6p            (2.9%)               4.80p          

Past performance is not a guide to future returns.

 

END

 

 

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