The Witan Investment Trust has pointed out it can draw on £71m worth of reserves to continue its long track record of increasing dividends as the Covid-19 outbreak prompts countless corporates to clip their dividends.
In a regulatory filing published after the £1.5bn investment trust’s AGM on Wednesday, the board said the “unusually large” number of quoted companies that have suspended or cut their dividends in response to the coronavirus pandemic would “undoubtedly” have an impact on Witan’s portfolio dividend income.
But it said current reserves covered the annual dividend payment by more than 1.5 times. Revenue reserves were one of the benefits of an investment trust structure and Witan would pay shareholders three quarterly payments of 1.34p throughout 2020 with a final payment in March 2021 that will make up the balance of the full-year dividend once its value has been decided.
Next and Dixons Carphone have become the latest UK companies to slash their dividends in light of the Covid-19 outbreak meaning £23.5bn have been knocked of distributions since the pandemic took hold, according to AJ Bell data.
Witan’s reserves have been added to nine times over the last 10 years.
Shareholders voted overwhelmingly in favour of the dividend policy at the AGM with 99.6% supporting the resolution.
Rachel Beagles joins board as scion from the founding family steps back
Additionally, Association of Investment Companies chairwoman Rachel Beagles (pictured) has joined the board of Witan as part of a number of directorate changes announced after the AGM.
Before moving into non-executive roles, Beagles was a managing director and co-head of the pan-European banks equity research and sales team at Deutsche Bank’s corporate and investment banking division. She is currently a director of Gresham House as well as the Aberdeen New India Investment Trust.
Her position takes effect from 1 July 2020.
Previously, she has been chairwoman of Securities Trust of Scotland and a non-executive director of Blackrock Emerging Europe, Schroder UK Mid Cap and Crown Place VCT.
Witan chairman Harry Henderson, a descendent of the founding family behind the investment trust, has officially stood down in a move that was signalled two years ago. Henderson is replaced by Andrew Ross, who was appointed to the board in May 2019 with the intention he would become chairman.
Henderson has been given the honorary title of president, which is without responsibilities or pay. He became a director in 1988 and chairman in 2003.
Richard Oldfield has also retired with Paul Yates to take over his role as chairman of the remuneration and nominations committee. Ross, along with Suzy Neubert, also join the committee.