Standard Life Equity Income Trust has increased its final dividend by three per cent to 8.65p per share, bringing total dividend to 11.80p per share for the year ended 30 September.
The company’s share price total return increased by 18.1 per cent over the reporting period and the discount reduced to 4.3 per cent.
The company ranks fifth out of 21 peers in the UK growth and income sector based on net asset value total return over the three years ended 30 September 2010, according to JP Morgan Cazenove.
Karen Robertson, fund manager, Standard Life Equity Income Trust, Standard Life Investments, says: “Towards the end of the period, UK equities recovered as a measure of risk appetite returned to the market. The latest corporate earnings season got underway in July, with companies generally beating expectations on both earning and sales. In addition, guidance from management is broadly positive, particularly among the more cyclically exposed businesses.
“The company’s holdings in industrial stocks geared towards economic recovery were positive for performance during the period. For example, Melrose was the biggest contributor, as the engineering business announced interim results well ahead of expectations and raised its dividend. During the period, we increased our investment in the utilities sector with the purchase of Severn Trent and United Utilities. Elsewhere, we continued to invest in companies that we expect to benefit from an improving economic outlook. For example, we bought publisher United Business Media, which offered an above-average dividend yield and given signs of improvement in the advertising market. Sales during the period included taking profits in companies following a period of strong performance, such as paper producer Mondi and tour operator Thomas Cook.
“We remain confident in the outlook for the UK equity market given strong corporate earning momentum and generally strong balance sheets. We believe that our bottom-up Focus on Change approach leaves us well positioned to take advantage of investment opportunities as they arise.”
