City Of London Investment Trust PLC on Wednesday said its net asset value and total return grew in financial 2024, and proclaimed confidence in its core portfolio holdings.
The FTSE 250-listed investment firm, which targets long-term growth through equities listed on the London Stock Exchange, said its NAV per share was 424.3 pence at June 30, up 10% from 385.2p one year prior.
The stock traded 0.6% lower at 439.00p per share on Wednesday morning in London.
City of London also delivered a positive 15.6% NAV total return for the year ended June 30, against the 4.5% reported for financial 2023.
The total return for its benchmark, the FTSE All-Share index, improved to 13.0% from 7.9%.
City of London said its total dividend for the year meanwhile increased 2.5% to 20.6p per share from 20.1p for the previous year, ‘slightly ahead of UK CPI inflation’.
This was ‘fully covered’ by earnings per share, which rose 3.6% to 20.9p from 20.1p. The ‘most important positive contributor’ was increased dividends from City of London’s holdings in bank shares.
Regarding global markets, Chair Laurie Magnus noted: ‘Inflation fell in the main developed economies, but hopes that interest rates would be cut in the US and UK, in the first half of 2024, were disappointed.
‘Central banks remained cautious given labour market strength and upward pressure on wages.’
Looking ahead, Magnus noted ‘recent signs of weakness’ in the US economy, although ‘UK economic growth has picked up during the second half of 2024’.
He continued: ‘Although there has been some improvement in the performance of UK equities relative to their overseas equivalents, they continue to trade at a valuation discount...The dividend yield from UK equities remains attractive relative to the main alternative investment options, particularly with UK bank deposit savings rates starting to decline.’
Magnus further added that ‘City of London’s portfolio is well diversified, with 64% of investee companies’ revenues earned from overseas.
‘The portfolio’s core holdings include good quality and cash generative companies which can be expected to deliver reliable and competitive returns.’
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