SAINTS sees earnings per share rise despite volatility

The performance of the Baillie Gifford-managed trust compared to a total return on the FTSE All World Index of 2.5 per cent with political and macro economic concerns hitting emerging market valuations.

Despite this volatility, earnings per share for the six months rose to 6.55p compared to 6.22p in the same period last year.

The key driver of growth was the equity portfolio, which delivered strong growth in dividends. The bond portfolio produced a smaller increase in income, while the property portfolio delivered another period of robust rental growth.

A first interim dividend of 2.825p was paid at the end of May and a second interim dividend of 2.85p is payable at the end of August. The total amount of these dividends, 5.675p, is 3.7 per cent higher than the amount paid for the corresponding period in 2017. Inflation, as measured by CPI, was 2.4 per cent over the year to end June 2018.

Over the six month period 2,420,000 shares (representing just over 1.8 per cent of issued share capital at 1 January 2018) were issued at a premium to net asset value, with SAINTS’ share price ending the period modestly above net asset value.

Operational updates from SAINTS’ equity holdings have been generally encouraging. Particularly strong share price performance was delivered by Cochlear, the Australian hearing implant manufacturer, Pearson, the education company, and Kering, the owner of Gucci and other luxury goods brands, all of which generated total returns of over 25 per cent during the six month period.

The Company remained fully invested over the period, during which modest net reductions were made to the property and fixed income portfolios and re-invested in equities. Annualised turnover during the period was around 14 per cent, implying an average holding period of approximately seven years. This is consistent with our long-term, low turnover, stock-driven approach.

The Company’s primary objective is to deliver real dividend growth over time, as it has done over the past. We remain confident of achieving this objective, given the solid growth prospects we see for the assets held across the portfolio.