Witan Pacific Investment Trust plc announces full year results to 31st January 2020

The Board of Witan Pacific Investment Trust plc has today announced audited full year results for the period ended 31 January 2020. A summary of the results:

  • Net Asset Value (NAV) total return of +5.2% for the year, compared with the benchmark +8.7%
  • Share price total return of +12.3%
  • A final dividend of 4.6 pence per share making the full-year dividend 7.15 pence per share (2018: 7.0 pence), an increase of 2.1% on 2019 and the 15th year of consecutive dividend increases

Witan Pacific is the only UK investment trust with a strategic focus across the entire Asia Pacific region, including Japan, Australia and India, investing in companies operating within this increasingly interdependent region. Since 2005 the Company has operated a multi-manager strategy to give access to a variety of investment styles and skills, and a broader investment opportunity.

Witan Pacific’s Chair, Susan Platts-Martin says:

“In the year to 31 January 2020, Asia Pacific equities underperformed most major regions as a series of local and global factors conspired to limit the upside of the region’s markets. The primary concerns surrounded US/China trade negotiations, US Federal reserve policy, pro-democracy demonstrations in Hong Kong and the lack of global economic growth. Despite these headwinds, equity markets ended the year higher with our benchmark, the MSCI AC Asia Pacific Free index up 8.7% in sterling terms.

The Company’s net asset total return was 5.2% and the share price total return was 12.3%. The NAV and share price hit an all-time high in January but fell back due to the emergence of Covid-19 in China.

The Board aims to increase the ordinary dividend in real terms over the long term. It has done so for the last 15 years. The Board is proposing a final dividend of 4.6p per share. This will make a total dividend of 7.15p per share for the year, a rise of 2.1% on last year.

The Board believes that the payment of the 7.15p for the full year, which is equal to, but not more than, the year’s revenue earnings per share, is a prudent stance as there is significant uncertainty surrounding earnings for the year ahead as companies deal with the threats posed by Covid-19. There are likely to be significant dividend cuts, which will impact on our earnings. We are, however, fortunate to enter this period of uncertainty with a sizable revenue reserve. It is likely that the Company will use some of these reserves to help supplement the Company’s income in the current financial year.

Since the year end markets have fallen sharply ending the bull market run as the Covid-19 virus has spread across the globe. Measures taken to contain its spread have impacted economic growth and will undoubtedly result in a global recession, although its longevity and long-term impact are, as yet, unknown. Since our year-end, Sterling has fallen versus most Asian currencies which has to some extent cushioned the fall in the NAV. Notwithstanding this, the NAV has fallen by 6.6% since year-end (as at 1st May 2020).

It is difficult to predict how long it will take for businesses to return to their normal modus operandi. Long-term growth forecasts for mainland China remain strong. Some sectors such as travel, will be more hurt than others, and some companies will be casualties of the imposed tough operating conditions. From an investment perspective, an active approach to selecting stocks rather than tracking indices should prove particularly valuable in this investment climate, although it may take time for these investment decisions to bear fruit.

The Company made a corporate announcement in February 2019 which stated that if the Company does not deliver NAV total return outperformance of its benchmark over the period from 31 January 2019 to 31 January 2021, the Board will put forward proposals which would include a full cash exit at close to NAV for all shareholders. I am disappointed to report that the Company had not delivered NAV total return outperformance over the measurement period at the year-end. The Board continues to monitor performance closely and is considering the available options in the best interests of shareholders and the Company, should the performance target not be met. In that event, any proposal that the Board might put to shareholders would include the opportunity to realise cash should shareholders so wish. The Board will update shareholders at the appropriate time, expected to be no later than the end of the first week of February 2021.”

 

– ENDS –

 

 

Notes

Witan Pacific - Discrete Investment Performance

 

Discrete performance (%)
 

Q1 2015
Q1 2016

Q1 2016
Q1 2017

Q1 2017
Q1 2018

Q1 2018
Q1 2019

Q1 2019
Q1 2020

Share Price (Total Return)

-10.1

33.2

6.6

4.1

-3.2

Net Asset Value (Total Return)

-5.0

31.2

5.5

-0.1

-10.5

Benchmark (Total Return)

-6.4

34.6

7.5

2.4

-7.3

Relative NAV Performance

1.4

-3.3

-2.1

-2.5

-3.2

Source: Morningstar, total return includes the notional reinvestment of dividends. Annualised figures updated each calendar quarter. The benchmark for the Witan Pacific Investment Trust plc is the MSCI AC Asia Pacific Free Index (£). Source: MSCI, for more information please go to www.witanpacific.com/legal-information

Please remember past performance is not a guide to future performance. The value of an investment and the income from it can fall as well as rise as a result of currency or market fluctuations and you may not get back the amount originally invested.

 

Witan Pacific Investment Trust plc 

Witan Pacific Investment Trust is a multi-manager, Asia-Pacific including Japan trust with assets of £196m (Source: Witan Pacific Factsheet 31.03.2020). The Company moved to a multi-manager structure on 27 May 2005 with Witan Investment Services as Executive Manager. The Trust’s benchmark is the MSCI AC Asia Pacific Free Index (£) with gross dividends reinvested.

Witan Investment Services Limited is a wholly-owned subsidiary of Witan Investment Trust plc. Witan Pacific Investment Trust plc is registered as an Investment Company in England No 91798. 

 

For further information please contact: 

 

James Hart, Investment Director

Witan Investment Services Limited 

Tel: 020 7227 9770 

[email protected]

 

Alexis Barling, Director of Marketing 

Witan Investment Services Limited 

Tel: 020 7227 9770 

[email protected]