20 November 2020
I am pleased to report both a very strong absolute return and a significant relative outperformance against the Benchmark in the first six months of the Company’s financial year. The Company’s net asset value total return was +23.1% and the share price total return was +22.1% over the period. This compares to a total return of +15.3% from the Company’s Benchmark, the MSCI World Healthcare Index, measured on a net total return, sterling adjusted basis.
This strong absolute performance was achieved despite sterling appreciating by 4.1% against the U.S. dollar over the period; the U.S. dollar being the currency in which the majority of the Company’s investments are denominated.
Revenue and Dividends
The revenue return for the period was £5.6 million, compared to £6.5 million in the same period last year. The reduction in this figure is due primarily to a fall in the yield on the portfolio. The Board has declared an unchanged interim dividend of 6.5p per share, for the year to 31 March 2021, which will be payable on 11 January 2021 to shareholders on the register of members on 20 November 2020. The associated ex-dividend date is 19 November 2020.
Shareholders will be aware that the Board had intended last year to recommend a second dividend payment for the year as a final dividend to shareholders. However, in light of the ongoing response to the coronavirus pandemic, and in line with many other companies, the decision was taken to declare a second interim dividend, which enabled the dividend to be paid without the prior approval of shareholders at the Annual General Meeting. It is the Board’s current intention that a final dividend for the year to 31 March 2021 will be proposed to shareholders at the Company’s Annual General Meeting to be held in July 2021.
I remind shareholders that it remains the Company’s policy to pay out dividends at least to the extent required to maintain investment trust status. These dividend payments are paid out of the Company’s net revenue for the year and, in accordance with investment trust rules, only a maximum of 15% of income can be retained by the Company in any financial year.
It is the Board’s continuing belief that the Company’s capital should be deployed rather than paid out as dividends to achieve a particular target yield.
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