Gresham House Strategic retains commitment to raising dividend
Gresham House Strategic will raise its dividend as its board and manager insist the firm is “well-positioned” during the coronavirus crisis.
In a statement, Gresham House Strategic’s board and manager say they “retain confidence” in the strategy and will retain their commitment to raising the dividend 15 per cent.
The investment company said it had been able to “maintain business as usual” during the unfolding coronavirus crisis. The portfolio entered the recent market drawdown with 16 per cent of assets in cash, which now represents 19per cent.
Gresham House Strategic is a separately listed division under Gresham House that specialises in strategic equity.
Whilst many open-ended small company funds will have to anticipate and manage fund cashflows, Gresham House Strategic said its cash is “protected and awaiting deployment, either to build existing holdings or take advantage of new investment opportunities that emerge, of which there will be many. “.
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In the year ended 31 March 2020, £1.6m of cash was returned to shareholders via a buyback of 74,446 shares and dividends of £751,900 during the year. It was funded by net profitable realisations of £2.3m and dividend income in the year of £717,000.
The specialist asset manager said it had a total shareholder return of -5.19 per cent in the year to 31 March, which compares to the average IMA open-ended fund universe of -17.95 per cent.
Despite a commitment to the strategy, the firm said its portfolio companies will be impacted to varying degrees during the economic shutdown. Despite central bank and government support, the firm said economic activity will be significantly curtailed.
“We seek to support our portfolio companies more than ever through this difficult period, potentially financially, if prudent to do so, and we will also exploit share prices which are at an even greater discount to intrinsic value.”
Shares in Gresham House are down more than two per cent.