The trust is managed by Iain Pyle, investment director, UK equities at Standard Life Investments.

The results also reveal that over five years, the Shires Income has seen a Share Price Total Return of +41.0% and Net Asset Value Total Return of +40.5% versus FTSE All-Share Total Return +38.9%.

A first interim dividend of 3.0p per share in respect of the year ending 31 March 2020 was paid on 25 October 2019. The Board declares a second interim dividend of 3.0p per share, payable on 24 January 2020 to shareholders on the register at close of business on 3 January 2020.

Subject to unforeseen circumstances, it is proposed to pay a further interim dividend of 3.0p per share prior to the Board deciding on the rate of final dividend at the time of reviewing the full-year results.

The results also reveal that the current annual rate of dividend is 13.2p per share, representing a dividend yield of 5.0% based on the share price of 263.0p as at 30 September 2019.

The board considers that one of the key attractions of the company is its high level of income and recognises that, in the current economic environment, there is likely to be a continuing demand for an attractive and reliable level of income.

Whilst the company aims to cover its annual dividend cost with net income, the board is conscious of the significant revenue reserves, which amounted to 1.2 times the annual dividend cost as at 30 September 2019, hence providing added security on the sustainability of the dividend.

Robert Talbut, chairman of Shires Income PLC, said: “The market outlook is balanced. While there are legitimate concerns around the strength of growth we also expect to see stimulus in China and EU and the persistence of very low-interest rates in the US and around the world. These should be supportive of equity valuations in the UK which are currently far from high by historic standards. Investor positioning has been clearly defensive, with cash positions at the highest level since 2008, but the Investment Manager believes there is scope for the UK stock market to move higher from here.

“From the perspective of the UK Equity Income sector, this is the case even more so. Dividend yields are high and the gap between equity yields and bond yields remains at very high levels. The Company’s portfolio provides a premium yield compared to the market, while being appropriately diversified to weather more turbulent times.

“In the short term we continue to see UK economic data remaining uninspiring and, as long as this continues, a rise in bond yields and a full shift in market positioning looks unlikely. The underperformance of value/yield has thrown up many attractive yield opportunities in companies that should prove resilient in a downturn, while the company’s preference shareholdings should maintain their capital position and deliver a high level of income.

“Overall, the UK equity market remains very out of favour with many investors which we feel provides the potential for outperformance were this to change.”

“For the company, the board believes that our combination of a high dividend from well-diversified sources and the ability to participate in equity market upside remains an attractive one for shareholders.”