Nick Train’s Finsbury Growth & Income trust will not be raising its interim dividend in a departure for the trust’s history of increasing payments.
An RNS announcement confirmed the trust’s first interim dividend would remain unchanged at 8p per share following the hit to global markets from the coronavirus.
“In light of the current global uncertainty the board of the company has declared an unchanged first interim dividend of 8p per share in respect of the year ending 30 September 2020 (2019: 8p per share),” the update read.
“Such dividend will be paid on Friday, 15 May 2020 to shareholders on the register on Friday, 3 April 2020. The associated ex-dividend date is Thursday, 2 April 2020. The dividend is to be paid from the company’s revenue account.”
Nick Train’s history of increasing dividends
Chelsea Financial Services managing director Darius McDermott notes the decision is a departure for Train’s £1.5bn trust, which has had a broadly progressive dividend policy for nearly all its payments.
Finsbury Growth & Income last’s interim payment was 8p a share for 2019, which was up from 7.2p the previous year.
AJ Bell head of active portfolios Ryan Hughes said the unchanged dividend “will be new for many investors” who are used to the trust’s history of increasing dividends. But he added keeping the interim dividend where it is “leaves them some room for the next payment should there be greater clarity on the global economy”.
Tilney managing director Jason Hollands hailed the board’s decision as prudent given the current uncertainties around the earnings outlook for most companies in the current environment.
“It would seem odd issuing any announcement and not acknowledging we are in the midst of the extreme conditions due to the coronavirus pandemic,” said Hollands.
Hughes also agreed the move was sensible in the short-term.
“The freezing of the dividend feels like the prudent approach amid the uncertainty, particularly with the expectation of dividend cuts from companies later in the year with the global economy shutting down,” Hughes said.
