Thomas Moore

The NAV return outpaces the 18.5% increase in the benchmark of the FTSE All-Share Index total return.

The company has confirmed that in absolute returns, this has been one of the most successful periods for the portfolio for over 10 years.
During the six months to the end of March 2021, the share price total return was 34.8%.

The company’s discount at the end of the period was 8.8%, having reduced over the six-month time period from 12.5% (30/9/2020).

The board declared a second interim dividend of 5.2p which will be paid on 25 June 2021 to shareholders on the Register on 4 June 2021, with an associated ex-dividend date of 3 June 2021. The Board paid a first interim dividend of 5.2p in March, bringing total dividends for the 6 months to 31 March 2021 to 10.4p per share, in line with the payments in 2020.

It is the intention of the board that the third interim dividend, which will be paid in September, will also be 5.2p per share and that the fourth interim dividend will be at least 5.1p, making a total dividend for the year of 20.7p, an increase of 0.1p on the dividend paid in 2020.

Thomas Moore, portfolio manager, Aberdeen Standard Equity Income Trust, said: “The portfolio outperformed significantly in the six month period, staging a very sharp recovery. The Company also achieved outperformance against the FTSE All-Share Index in every calendar month of the period, highlighting how consistently our holdings are performing, admittedly from what were deeply over-sold levels in many cases.

“This is extremely gratifying, underlining the potential of our Focus on Change investment process to deliver for shareholders in more normal market conditions, following the intensity of the market reaction to Covid-19.”

Mark White, chairman, Aberdeen Standard Equity Income Trust, added: “It is clear that the long-term effect of events in 2020 is that dividends from a number of investee companies are now at lower levels. Therefore, while the Board is targeting a return to covered earnings, it fully recognises that one of the defining features of the investment trust structure is the ability to build up revenue reserves in good years to enhance distributions to shareholders in more challenging times.

“While we have seen a gradual improvement in dividend income received, the Board does not expect that earnings will cover the projected dividend for the financial year and expects to use reserves to support the dividend in the short term. While we remain convinced that it is entirely appropriate to draw on revenue reserves in current circumstances, we recognise that this cannot continue indefinitely.

“As conditions improve we wish to return to larger increases in dividend payments as we have done in the past. This may be of increasing importance to our shareholders in the event that we experience significantly higher rates of inflation than in prior years. This seems to be entirely possible given the unprecedented scale of both monetary and fiscal stimuli adopted by the Government and the Bank of England to support the post-Covid recovery.”