Friday, 10 October 2014

New City High Yield Results

NCYF has been a part of my SIPP portfolio for a number of years. It invests in high-yield fixed-interest securities and has produced positive NAV total returns and increased dividends in each of the past five years. The trust has a widely diversified portfolio, including some high-yielding convertibles and equities, with useful exposure to floating-rate notes to guard against inflation.

They have today issued full year results to 30th June 2014(link via Investegate)

Building on the previous years 7.4% uplift, the Company's net asset value has again seen an increase of 3.1% to 62.4p; when this capital measure is adjusted for the payment of dividends of 4.21p (4.1 p - 2013), the NAV total return was 10.3% ( 2013 - 14.9%). The share price total return was 13.7%.

Dividends have been increased by 2.6% to 4.21p giving a yield of  around 6.4% based on the current share price of 65.5p. The dividend is more than covered by earnings of 4.76p per share and revenue reserves are 136% - the equivalent of 16 months current dividends.

As in previous years, the trust continues to trade at a premium to net assets and the management have placed new shares earlier in the year raising £30m.  This has helped to increase the trusts market cap. to around £190m and also reduce the percentage of ongoing charges for the year from 1.18% to 1.12%. This reduction is, of course, as a percentage of net assets and in real terms, total expenses increased from £1.74m to £2.04m.

With a great deal of turbulence hitting the equity markets in recent weeks, it's reassuring to have the steadying effect of the fixed interest constituents in my portfolio.

As ever, slow and steady steps…

7 comments:

  1. Hi there - that is a good return and there might be some decent opportunities to reinvest that juicy dividend in the coming month or two? It looks as if October is limbering up to do its thing...

    I have got close to buying some New City several times in the past - I should have!

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    1. Hi FI,

      Thanks for dropping by - will not be reinvesting dividends as I need the income to pay the bills and buy food. Equities have seen a sharp pull-back in recent weeks and, as you say, some interesting opportunities being offered. Currently waiting to see if any better offers come along later in October - an alert on N.Brown below 300p was triggered last week??

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  2. Hi Keith,

    Very pleased with your new high. I will keep a eyes on it perhaps I can have a position in the future.

    Cheers & Good Luck

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    1. Thanks for leaving a comment and for the good wishes (btw its John not Keith!)

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    2. I'm Keith! Thanks for sharing your analysis of NCYF

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    3. Hello Keith,

      Thanks for dropping in to clarify that one!!

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  3. I suppose they're based in Jersey so that their bond income can be passed on tax efficiently to SIPPs and ISAs. Are you happy with the regulation in Jersey? (And, indeed, in Guernsey and the Isle of Man?)

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