Monday, 23 September 2013

Dunedin Income Trust - Interim Results

In March, I commented on DIG after the full year results were issued (here’s the link). At the time I was a little concerned regarding the dip in revenue reserves and also the meagre CAGR for dividend growth rates over recent years.

They have today issued interim results for the half year to 31st July (link via Investegate). Share price total return (incl. dividends) increased 13.7% compared to the benchmark FTSE All Share Index increase of 8.9%.

Income from dividends has increased by 10%, boosted by a one-off special from Sage. Nearly 25% of dividends were provided by overseas listed holdings. Revenue reserves have been boosted from £19.9m to £23.2m (+16.5%) which should help with future dividend growth.

The chairman‘s statement concluded “We are comfortable that our existing holdings, are in good shape operationally, possess sound balance sheets and strong management teams and are well placed to weather difficult conditions. Recent crises have certainly taught us that uncertainty is the friend of the long term investor and we will continue to look closely for any potential opportunities that may be thrown up by events. In the meantime your Company is well placed to continue to grow its distributions to shareholders.”

The trust has recently moved to quarterly payments and expects the full year payment to be 3% ahead of the previous year. I have 11.1p pencilled in for the full year which would provide a current yield of around 4.1%.

Top ten holdings are all from the FTSE 100

GlaxoSmithKline 5.2%
Vodafone Group 5.1
Centrica                      5.0
Royal Dutch Shell 4.8
HSBC Holdings 4.5
Br. American Tobacco 4.1
Prudential Corporation 3.5
Unilever                      3.4
Pearson                     3.3
Tesco 3.3

Total                     42.2%

More on this following full year results next March.


  1. We share the same goals and I've learnt so much from your approach and your plain English explanations. Thank you, John.

    (I stick to Oiecs and ITs and have dipped my toes into ETFs, but I'm not confident enough to handle other shares yet.) One thing that always bafffles me is how to recognise a sound long term investment when OEICs and ITs have more or less the same 'Top Ten Holdings': in more or less the same proportion. Do you find the Top Ten holdings a useful bit of information? I'm not sure that I do.

    Once again, thank you.

  2. Hello Crisp,

    Thanks for leaving a comment and good to hear you are benefiting from the blog.

    Its a good point you make about many funds and trusts having very similar holdings.

    I'm not sure why one will greatly outperform another but suspect its a lot to do with the overall mix (including the weighting of smaller constituents) combined with use of gearing, not overpaying and weight of sector holdings. Another factor will be minimising underperforming shares/ sectors etc.

    The ability to recognise a good long-term investment is tricky which is why I like to hold a diverse 'basket'.

    Good luck with your investing.

  3. Do you currently hold Dunedin (DIG) as part of your Investment Trust Portfolio, or is this
    update purely relating to a possible purchase.

    I only mention this as it does not appear in your Investment Trust Income Portfolio Update
    on 2nd August.



  4. Hi Matt,

    Well spotted!

    I do indeed hold DIG in both Sipp Drawdown portfolio and also my ISA. I see I included it in my article for RIT referred to in my inv. trust portfolio of March but it seems to have been replaced by Murray Income.

    I also hold Invesco Income (IVI) which was not included. These 3 along with City of London are all from the UK Growth & Income sector.