LICs and LITs: Strong earnings see dividends roll in

Claire Aitchison

Independent Investment Research

In the August edition of the IIR LMI Monthly, we review some of the key news events and shine a spotlight on Antipodes Global Investment Company Limited (ASX: APL), which has entered into a Scheme of Arrangement with Antipodes Global Shares (Quoted Managed Fund) (ASX: AGX1) for the exchange pf APL shares for units in AGX1 and wind up of APL.

Some of the key news items during the month include:

  • On 12 August 2021, PM Capital Global Opportunities Fund (ASX: PGF) announced a final dividend for FY21 of 5 cents a share, fully franked, a 100% increase on the FY20 final dividend. The Company also announced that due to its strong profits reserve position, it intends to maintain a minimum dividend of 5 cents for both the interim and final dividend for FY22, representing a full year FY22 dividend of at least 10 cents. As of 30 June 2021, the Company has five years' dividend coverage at 10 cents a share.
  • Unitholders of Magellan High Conviction Trust (ASX: MHH) have voted in favour of the transition from a Listed Investment Trust (LIT) to an Exchange Traded Managed Fund (ETMF). MHH was removed from the ASX on 30 August 2021 and the ETMF commenced trading under the ticker MHHT on 31 August 2021.
  • Sandon Capital Investments Limited (ASX: SNC) has declared a fully franked special dividend of 1 cent a share, in addition to the full franked FY21 final dividend of 2.75 cents. The Board anticipates paying an interim FY22 dividend of 2.75 cents, fully franked, subject to the Company having sufficient profit reserves, franking credits and it is within prudent business practices. This would represent a 10% increase on the FY21 interim dividend. SNC currently has 32.1 cents a share in profits reserves and more than 9 cents a share in franking credits. In addition to this, the Manager (Sandon Capital Pty Ltd) announced that from FY22 onwards, the Manager intends to invest at least 50% of the after-tax proceeds of performance fees earned from SNC in SNC shares. Shares will be purchased on-market and will be acquired after the payment of the relevant performance fee where SNC’s share price is trading at a discount to its after-tax NTA. 
  • During the month, Gryphon Capital Income Trust (ASX: GCI) raised $62.1 million through the placement of 30.92 million new units to wholesale and sophisticated investors at a price of $2.01 per unit. The placement was done using the Trust’s available placement capacity under the ASX listing rules with the placement representing no more than 15% of the Trust’s issued capital and therefore unitholder approval was not required. Capital raised will be used to invest in line with the Trust’s investment strategy. 
  • SEC declared a final dividend of 5 cents a share, fully franked, for FY21, taking the full-year dividend to 8.5 cents a share, fully franked - a 54.5% increase on the FY20 full-year dividend. The dividend uplift was a result of the strong performance in FY21. The Board has set a target dividend yield of 4% of NTA p.a for FY22. The Board has also announced an increase in the frequency of dividend payments from semi-annual to quarterly with dividends of 1% of NTA per quarter.

See all the details in the attached report. 

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The views here are not recommendations and should not be considered as investment advice.

Claire Aitchison
Head of Equities & Funds Research
Independent Investment Research
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