|
STS Global Income & Growth Trust PLC on Tuesday posted ‘disappointing’ performance in financial 2026, but raised dividends and reaffirmed its overall strategy. The Edinburgh-based investor in global equities reported a net asset value of 223.18 pence per share at March 31, down 8.2% from 243.10p a year earlier. NAV total return was negative 4.6% for the year ended in March, and the share price total return was negative 2.5%. This compares to a positive return of 13.5% for the company’s benchmark, the Lipper Global - Equity Global Income Index. ‘This represents a material shortfall and is disappointing,’ STS acknowledged. ‘It is, however, important to distinguish between share price performance and the underlying business performance of the companies in our portfolio. They have continued to demonstrate strong fundamentals but have been out of favour in a market environment that has rewarded very different characteristics,’ the investor said. Despite the NAV decline, STS has declared a fourth interim dividend of 2.152 pence per share, lifting the total dividend for financial 2026 to 8.452p, up 1.0% from 8.368p the previous year, and reflecting a dividend yield of 3.8% based on the closing share price at March 31. STS shares rose 0.4% to 230.00 pence on Tuesday around noon in London, having slipped 5.7% in the last 12 months. ‘The past year has been characterised by market disruption - from the announcement of the tariff programme in the US to the Iran conflict. Global equity markets have produced strong returns, but these have been concentrated in a relatively narrow group of sectors. Gains were focused in energy, utilities, as well as businesses benefiting directly from the capital expenditure boom in AI which are sectors that, for reasons of cyclicality, capital intensity or unproven end-market economics, [STS] does not own,’ the company said. ‘By contrast, many of the high-quality, cash-generative businesses that the company favours were marked down on fears relating to disruption from AI and pressure on consumers. We believe this divergence reflects a combination of short-term macroeconomic factors and evolving market narratives, rather than a fundamental deterioration in the quality of the businesses we own.’ STS noted that it has reduced its ongoing charges ratio to 0.66% from 0.80% of net assets per year, thanks in part to lower fees agreed with Troy Asset Management. Discount management has remained in focus, STS said, with the company repurchasing 7.8 million shares at a total cost of £18.7 million in financial 2026, and issuing 600,000 shares for net proceeds of £1.5 million. STS intends to renew its three-year multi-currency revolving credit facility of £20 million, which expires in September. ‘This has been a difficult year in terms of performance, and we do not take that lightly. The board, however, remains confident in the company’s strategy. Additionally, we have taken clear steps to improve cost efficiency and continue to focus on delivering long-term value for shareholders,’ STS added. Copyright 2026 Alliance News Ltd. All Rights Reserved.
|
