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Capital Gearing Trust PLC on Thursday lifted its annual payout by more than 30%, thanks to the distribution of interest income, as its total return beat UK inflation. Capital Gearing Trust aims to preserve and grow wealth by investing in a broad portfolio of assets. The FTSE 250 index constituent has been listed since 1973 and managed by Peter Spiller since 1982. The trust said its net asset value total return was 4.1% in the financial year that ended March 31 and its share price total return was 3.6%. This outpaced UK consumer price index inflation of 2.6%. NAV per share was 4,924.8 pence on March 31, up 2.4% from 4,810.5p a year before. The remainder of the total return comes from the dividend. Total shareholders funds were £885.0 million on March 31, down from £1.06 billion a year before, as Capital Gearing Trust completed £194.5 million in share buybacks in the recent year. All parts of the portfolio made a positive contribution during the year, which the exception of infrastructure investments, which lost 0.1%. Cash & T-bills and credit, Capital Gearing Trust’s so-called ‘dry powder’, returned 0.9%, while index-linked bonds contributed 1.0%. Risk assets, which include infrastructure, added 2.4%, including 1.1% from equities, 0.4% from gold and 0.5% each from alternative investments and property. Capital Gearing Trust declared a 102 pence final dividend, up 31% from 78p the year before. The trust pays no interim dividend. Of the total payout, 66p was declared as an interest distribution to save tax, while 36p was declared as a dividend distribution. The company said two-thirds of the annual increase was due to the interest distribution, which reduces its corporation tax liability, and it warned ‘this year’s elevated distribution should not be viewed as a precedent for future payments’. The interest distribution depends on the net revenue received by the company each year, though this has been increasing due to changes in its portfolio. Chair Jean Matterson will leave the board at the company’s annual general meeting on July 3. Karl Sternberg will replace her as chair, having joined the board back in September. Sternberg is chair of Monks Investment Trust PLC but will step down at its AGM in September. Looking ahead, investment managers Spiller, Alastair Laing and Chris Clothier said Capital Gearing Trust will act cautiously as the US presidency of Donald Trump has created unprecedented market risk. ‘The company remains defensively positioned, with material allocations to dry powder and index-linked bonds, while maintaining a cautious stance towards risk assets,’ they said. ‘It is true that markets will always face a degree of uncertainty. However, the present level of uncertainty faced by the global economy in the face of constant change to trade policy makes the possible outcomes for corporate profits, inflation, interest rates and global growth staggeringly wide.’ Capital Gearing Trust shares were up 0.2% to 4,816.27 pence early Thursday in London. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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