Witan hopeful that earnings will cover divi

16th Aug 2011 07:11

Witan Investment Trust, which hit a 52-week low earlier this month, said its performance outstripped its benchmark in the first half of 2011.The company's net asset value (NAV) total return was +3.6%, a relative outperformance of 0.6% over the FTSE All-Share index. The investment trust said that eight of the 12 external fund managers in place at the end of 2010 beat their respective benchmarks during the period. Those which underperformed for the half year saw improved performance in the second quarter.NAV per share, with debt valued at par value, stood at 598.9p at the end of June, up 2.5% from the end-2010 figure. With debt rated at fair value, NAV per share stood at 592.5p, which was also up 2.6% on the end-2010 figure.Gearing art the end of June stood at 9.3%, up from 5.4% at the end of 2010, as the company took advantage of what it saw as good investment opportunities.The interim dividend has been raised to 5.45p from 4.4p, in accordance with the board's decision to rebalance the dividends so that the interim pay-out is half of the previous year's full-year pay out."There has been a significant further recovery in global dividend payouts this year, together with a return of BP to the dividend list," the company said. "Our portfolio enjoyed good earnings progression, with revenue earnings per share rising 22% compared with the first half of 2010, to 7.68p. If this rate of increase is maintained for the full year, last year's gap between earnings and dividends paid out (which was funded by drawing from revenue reserves) would be closed," it added.As for the current situation in the markets, company chairman Harry Henderson attacked "inept European and US handling of their debt problems" but said if the problems can be contained before they have a serious impact on the wider economy then "global equity markets appear increasingly attractive, in absolute valuation terms and relative to the low returns available on cash or government bonds, investments traditionally (though not entirely correctly) regarded as low risk." --jh