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BAT reports NAV total return of -5.1 per cent

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British Assets Trust (BAT) has reported a net asset value total return of -5.1 per cent compared with a total return of -4.3 per cent from the benchmark index – a composite of 75% FTSE All-Share Index and 25% FTSE World (ex UK) Index, according to the firm’s annual results for the 12 months ended 30 September, 2011.

Since the year-end the benchmark index has been adjusted to 80% FTSE All-Share Index and 20% FTSE World (ex UK) Index.

BAT has maintained its dividend of 6.112p per share, producing a dividend yield of 5.4 per cent at the year end.

The funds overweight position in emerging markets detracted from performance for the year, as developing markets underperformed the developed world. However, since the emerging markets portfolio was created three years ago it has contributed positively to performance and BAT is confident that it will continue to do well over the longer term.

UK companies showed good dividend growth during the year, which benefited the Company’s equity portfolio. The Board of BAT intends to maintain the dividend for the year at the same level as in 2010.

With the change in benchmark since the end of the year, the portfolio has been realigned and the expectation is that this will be beneficial to the level of dividend cover, whilst maintaining a significant international equity exposure.

Since the Company’s overseas portfolios were restructured three years ago, with the aim of providing greater focus on the best individual investment opportunities overseas, the Company’s net asset value total return was 21.4%, ahead of a total return of 18.9% from the benchmark over the three years to 30 September 2011.

For the period covered by the results it was managed by Julie Dent at F&C Investments, who had been in charge since 2001. Julie retired at the year-end and BAT is now managed by Phil Doel.

BAT Chairman Lynn Ruddick believes the resolution or otherwise of the ongoing Eurozone crisis will heavily influence the near-term outlook for equity markets. However, she says: “Encouragingly, company balance sheets are generally in good shape, with low levels of debt, but earnings are likely to come under pressure if the economic position deteriorates further. The Managers’ expectation, however, is for continued growth in dividend payments by companies. This, combined with the changes made to the portfolio since the end of the year, should be of benefit to the Company.”
 

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