Nick Train and Michael Lindsell have split a generous payout of £34.8m for 2021, despite their investment business suffering one of its slowest years of growth amid the impact of the coronavirus pandemic.
Lindsell Train Limited (LTL) shareholders enjoyed a record £48.4m dividend payout for the year ended 31 January 2021 as the funds boutique raked in higher pre-tax profits and fee revenue, according to filings from Companies House.
Train (pictured) and Lindsell paid themselves dividends of £17.4m each, an 11% increase from last year when they scooped up £15.6m and 62% higher than their individual payouts of £10.7m in 2019.
Together with their spouses, the pair collectively own 19,300 shares, a little less than three quarters of the total shares in the boutique.
Weaker FUM growth weighs on profits and turnover
The generous payday for the LTL founders comes despite the boutique seeing its most sluggish growth in years.
Funds under management climbed to £22.8bn during the year, only 6.3% higher than 2020’s total of £21.5bn. Growth in FUM was significantly weaker than 2020 when assets shot up by 31.9%, as well as 2019 (24%) and 2018 (44%).
Turnover and pre-tax profits, while higher than the year before, were hampered by the weaker FUM. Fee revenue rose 3.7% to £115.9m, while operating profit before interest income and tax was up 4.8% at £76.8m. In 2020 both grew at around 32%.
The board said the coronavirus pandemic remains a going concern for the company’s future FUM and profits. But after reviewing its cash position and cash flow forecasts, they “remain confident” it will be able to meet its obligations over the next 12 months.
LTIT consumer favourites hit by rising commodities and logistics costs
The Lindsell Train Investment Trust (LTIT) also benefited from its meaty stake in the fund boutique.
The £326m trust, which is jointly managed by Train and Lindsell, owns nearly a quarter of LTL’s shares, meaning its share of the recent dividends was £11.6m. Its payout was around 12% higher than in 2020 when it received £10.4m.
In August the trust returned -0.4% on a net asset value (NAV) basis as a spike in commodities and logistics costs hit some of its biggest consumer names. Heineken lost 4.7% off its share price in the month, while Unilever lost 1.7% and Diageo and Mondelez each lost 1%.
Year-to-date NAV is up 7.2% and its share price has risen 12.4% compared to the MSCI World Index’s gains of 17.1% in sterling.
Despite this, its shares continue to trade at a 24% premium to NAV, according to data from the Association of Investment Companies.
See also: Michael Lindsell warns investors over LTIT’s burgeoning premium
