Dunedin Income Growth Trust - Final Results

I hold this trust in both my ISA and income drawdown portfolios

They have just issued final results for the past year to 31st January 2014( link via Investegate).

The headline is that NAV per share on a total return basis has increased 8.7% - compared to its benchmark the FTSE all-share index which increased by 10.1%. Although the trust has underperformed the benchmark index, it has improved on the income front with revenues rising 10%. Underlying income per share also rose 7.6% to 11.59p.

The Board is recommending a final dividend of 3.375p, which will make for a total of 11.10p for the full year (2013 - 10.75p) - an increase of 3.25%. At the current price of 269p the trust yields a handy 4.1%.

Following last years results, I was a little concerned to see a dip in the revenue reserves of    -7.8% to £19.9m, however, this year I am pleased to see reserves have increased to £21.4m and now represents 130% of dividends paid out over the past 12 months.

Jeremy Whitley

The manager seems happy that the portfolio is in good shape though a little frustrated that he has not been able to make more progress on the capital appreciation front but says he is not prepared to compromise on quality in the search for value. In his report the lead manager Jeremy Whitley said “With a focus on good quality businesses that can preserve capital value in tough times and participate in, though probably not exceed, the bounties that are available in strong markets, which over the cycle leads to good levels of capital outperformance married with delivering real growth in dividend distributions“.

Portfolio turnover is again minimal - £30m less than the previous year and is only 0.04% of NAV (these costs for the average fund are over 1%).

I said in my post last year "I am content to continue holding for the time being but will be looking for some progress on income growth above inflation combined with a boost to reserves at this point next year" - seems both boxes are ticked so happy to continue holding for the time being.

As ever, please DYOR.