Published 8 May, the report showed the trust’s NAV per ordinary share after deducted borrowings increased 26.2% in the past 12 months to 31 March, rising from 208p to 262.4p. This translated to a NAV total return of 27.7% and share price total return of 29.6%.
On the contrary, earnings per share fell from 2.43p to 2.24p in the period, a 7.8% year-on-year decrease which the trust attributed to its holdings reinvesting their earnings.
In order to address this decline and pay an increased dividend for the year, amounting to a proposed final dividend of 1.55p and 2.93p for the year, the company will use 0.7p per share from its revenue reserves.
While the trust said that the decision will leave around 4p per share available for future distributions, it warned that depleting revenues could lead to dividends being constrained by prevailing earnings.
John Scott, chairman of the trust, said: “The companies in which Scottish Mortgage invests tend to retain their earnings and invest them for the future growth of their own businesses rather than paying them out as dividends.
“Whilst this is entirely consistent with the approach that the managers seek in their investments and ought to be positive for the long term capital return prospects of these companies, and therefore of our own, the corollary is that we expect Scottish Mortgage’s earnings to continue to fall in the foreseeable future.”
Total net returns hit £722.1m for 2014/15, up 53.4% on the £470.7m recorded in the year prior, boosted by total assets less current liabilities jumping 35.4% from £2.74bn to £3.71bn.
The trust also bought back 6.6m shares followed by the issuance of 25.6m shares, resulting in net proceeds of £49m, and taking the number of ordinary shares on issue to 1,245,674.
Scottish Mortgage Investment Trust has registered total NAV returns of 105% and 280.6% in the past five and ten years, respectively.
