Templeton Emerging Markets Investment Trust PLC on Tuesday announces a number of initiatives to heighten demand for shares in the company.
The Edinburgh-based emerging markets investor revealed plans for a share buyback programme worth £200 million over the next 12 to 24 months, representing more than 10% of the company’s current net assets.
Over the last five years, Templeton Emerging Markets already repurchased 142.3 million shares for £218.2 million in an attempt to bolster net asset value per share for investors.
Chair Angus Macpherson commented: ‘The board does not believe that the discount at which the company’s shares trade relative to their underlying net asset value adequately reflects the company’s strong investment performance. In a determined effort to improve the rating of our shares we are today announcing measures which can significantly increase the scale of future distributions to shareholders.’
Templeton Emerging Markets today said it would maintain a 3.00 pence per share final dividend for the year ended March 31, bringing the full year dividend to 5.00p, unchanged from the previous year.
The board has committed to maintaining a minimum dividend of 5.00p over the next five years and confirmed it will use its substantial reserves to do so if required.
At September 30, the trust held £130.7 million in cash and cash equivalents.
In a further attempt to improve value for shareholder, the company will reduced management fees from 0.875% to 0.75% by mid 2026, while also proposing a performance-related conditional tender.
‘if, over the five-year period to March 31 2029, the company’s NAV total return fails to exceed the benchmark total return then the board will put forward proposals to shareholders to undertake a tender offer for up to 25 per cent. of issued share capital at a price equal to the then prevailing net asset value less two per cent,’ Templeton Emerging Markets said.
The trust returned 23% in the last five years ended March 31, outperforming its benchmark index by 8.3 points.
The company intends to announce its annual results for the year to March 31 on Friday.
Templeton Emerging Markets shares were down 0.8% to 154.76 pence each in London on Tuesday afternoon.
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