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Aberforth Geared Income thinking about its future

Aberforth Geared Income has announced results for the year ended 30 June 2015. The return on the portfolio for the period was 15.4% which compares well to a 2.6% return on the FTSE All-Share Index and 10.4% on the Numis Smaller Companies Index (excluding investment companies). The return due to the zeros was 6.75% so the net asset value return on the ordinary shares was 19.6%. Discount widening meant the share price return was 15.8%.

Investment income over the period totalled £13.3m, which was 18% higher than the previous year. Special dividends treated as revenue made a significant contribution of £2.0m. Revenue
earnings per share were 11.05p, which represented growth of 19% from the previous year’s 9.28p. The Board has declared a second interim dividend of 5.50p per Ordinary Share for the year ended 30 June 2015. Together with the first interim dividend of 2.50p, the total underlying dividend with respect to the year is therefore 8.00p, which represents a 12% increase on the underlying dividend of 7.17p for the previous year. In addition, the Board has declared a special dividend of 1.80p per Ordinary Share, which reflects the contribution to AGIT’s income from the special dividends received in the year from portfolio companies.

On the future of the trust the Chairman had this to say – “With the penultimate year of AGIT’s planned life to 30 June 2017 now underway, the Board is mindful of its commitment to examine means by which Ordinary Shareholders may have the option to continue their investment while allowing ZDP Shareholders to realise their investment. The Board continues to review future options with input from the Managers.

The Managers’ report makes no mention of any individual holdings and contains no performance attribution information beyond saying that the portfolio is light both oil & gas which has done badly and healthcare which has done well. in both cases the underweight is a consequence of the lack of yield available in those sectors.

AGIT : Aberforth Geared Income thinking about its future

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