In its preliminary results for the year to 31 December 2017, the £486.5m Baillie Gifford-managed trust announced a full-year dividend of 11.1p, up from 10.825p in 2016.
Saints’ objective is to grow the dividend at a faster rate than inflation by increasing capital and growing income, but at 2.5% the dividend was slightly below the annual rate of 3%, as measured by CPI.
Chairman Peter Moon conceded in a statement that the dividend increase was below inflation, but said extending the increasing dividend run to 38 consecutive years was pleasing.
The trust’s net asset value (NAV) total return for the year was 18.8% compared with the benchmark FTSE All World’s return of 13.8%. The share price total return was 17.2%.
Moon said: “Whilst it is encouraging that returns have exceeded the very strong returns of equities generally over the year, both the managers and your board have a long-term perspective and so we do not believe that it is generally helpful to dwell on the comparison of performance against any equity index over short periods.”
The update also revealed investment income of £20.5m for the year, up from £18.6m in 2016, and that earnings per share for 2017 were 11.33p, up from 10.46p in 2016.
Saints said income had been assisted by “strong operational performance of many of the companies in which Saints invests” and because of the performance of the company’s property and bond investments.
According to FE data, Saints holds 14.6% in property and 5.7% in global fixed interest. The rest of the portfolio comprises European equities (35.10%), North American equities (23.30%), Asia Pacific equities (15.6%), American emerging equities (2.9%), Middle East and African equities (2.5%), international equities (0.2%) and money market (0.1%).
James Dow and Toby Ross took over as managers of the company in August when it was announced Dominic Neary was leaving.
Looking ahead, Moon said: “As a board, we remain of the view that an approach anchored in fundamental analysis of growth and dependability of income is a firm foundation for the future.
“Your board is fully supportive of and confident in the managers’ approach, and this confidence has been strengthened by another year of encouraging operational performance. We continue to believe that that the portfolio as a whole is well placed to support the growth of the Company’s dividend over time.”
