Edison issues review on Lowland Investment Comp

RNS Number : 0302E

Lowland Investment Co PLC

03 May 2017

 

London, UK, 3 May 2017

Edison issues review on Lowland Investment Company (LWI)

Lowland Investment Company (LWI) is a UK equity income investment trust with a focus on growing capital and income. It has been managed since 1990 by James Henderson at Henderson Global Investors; during 2016 Laura Foll, who has assisted Henderson since 2013, was named joint manager. LWI invests in 100+ mainly UK companies across the market cap spectrum, generally with about one-third of its portfolio respectively in large, mid-cap and smaller stocks. It has recently increased its gearing with an issue of 30-year loan notes, locking in a long-term fixed borrowing cost of 3.15%. LWI's managers note that they are finding many attractive opportunities to buy undervalued stocks with good long-term growth potential, at dividend yields that comfortably exceed the cost of borrowing. The discount is currently wider than longer-term averages.

At 25 April, LWI's shares traded at a 5.5% discount to cum-income net asset value. While in line with the one-year average, this is wider than longer-term averages (3.1%, 2.0% and 3.7% respectively over three, five and 10 years). NAV total returns continued strongly into April, running ahead of share price performance, which led to a widening discount. At 3.1%, LWI's dividend yield is towards the lower end of its peer group, but dividend growth has compounded at 10% pa over the last five financial years, compared with 2.2% for retail price inflation.

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