Interim Management Statement

RNS Number : 2301W

Securities Trust of Scotland PLC

26 January 2012

 



SECURITIES TRUST OF SCOTLAND PLC

INTERIM MANAGEMENT STATEMENT

COVERING THE PERIOD FROM 1 OCTOBER TO 31 DECEMBER 2011

Manager's commentary

Global economic news flow was mixed, dominated yet again by events in the eurozone, although there was encouraging economic data from the US. Regionally, North America outperformed, while Japan and emerging markets underperformed. By sector, energy and industrials were strongest, and utilities and telecoms weakest.  The benchmark High Yield index rose 8.4% over the review period.

The fund outperformed, with its NAV rising 10%. Top contributors included Pfizer, from the robust healthcare sector. The stock was helped by positive newsflow on its pipeline of drugs in development. Royal Dutch Shell also did well, boosted by resilient oil prices.

Our outlook remains unchanged; despite the macroeconomic drama, there has been little change in fundamentals. Concerns clearly remain regarding companies' potential for future growth, but most of them have strong balance sheets and cashflows. In terms of portfolio positioning, we are still underweight in cyclical stocks and overweight in medium-growth stocks. Our focus remains on quality - strong businesses with strong balance sheets.

Alan Porter

Profile

Objective - To achieve rising income and long-term capital growth by investment in global equities.

Benchmark - MSCI World High Dividend Yield index

Sector - Global Growth & Income

Launch - 28 June 2005

Portfolio

Asset class            30 Sep    31 Dec

Equities                    104.3%   106.6%

Fixed interest               1.1%       0.3%

Cash                            4.6%       2.3%

Borrowings              (10.0%)     (9.3%)

Equity allocation 30 Sep    31 Dec    % change

Healthcare               19.6%      19.1%    (0.5%)

Consumer goods     10.8%      17.6%      6.8%

Telecommunications12.8%       14.3%      1.5%

Financials                15.7%      15.1%    (0.6%)

Oil & gas                    6.8%        9.4%      2.6%

Utilities                        8.8%        6.2%    (2.6%)

Consumer services  15.0%        6.4%    (8.6%)

Industrials                   6.8%        6.6%    (0.2%)

Technology               1.7%        3.4%      1.7%

Basic materials           2.0%        2.1%      0.1%

Region allocation                 30 Sep    31 Dec

Europe                                    49.1%     45.7%

North America                          38.0%     43.6%

Asia Pacific ex Japan               5.8%       5.6%

Japan                                      3.6%       3.4%

Emerging markets                    1.7%       1.8%

Other                                       1.8%       -

Top 10 equity holdings (36.2% of total portfolio)

Royal Dutch Shell 4.6%

Pfizer 4.2%

AT&T 4.0%

Vodafone 3.6%

Chevron 3.6%

Philip Morris International 3.4%

GlaxoSmithKline 3.3%

Novartis 3.3%

Abbott Laboratories 3.1%

McDonalds 3.1%

Number of holdings 47

Number of countries 12

Key facts

Net assets £118.6m

Share price (p) 113.8

Net asset value per share (p)* 118.3

Discount (premium) 3.8%

Net yield 4.1%

*The NAV stated in our reporting is inclusive of current year revenue.

Performance

Discrete performance over 12 months to 31 December

	2011	2010	2009	2008	2007
Share Price	10.4%	21.3%	19.6%	(31.1%)	(6.1%)
NAV	5.0%	18.4%	29.9%	(37.7%)	(0.4%)
Benchmark	3.6%	14.5%	30.1%	(29.9%)	5.3%

Cumulative performance over periods to 31 December 2011

	One month	Three months	Six months	One year	Three years	Five years
Share Price	2.6%	10.5%	0.6%	10.4%	60.1%	3.5%
NAV	4.2%	10.0%	(0.9%)	5.0%	61.5%	0.1%
Benchmark	3.1%	8.4%	0.6%	3.6%	54.3%	13.9%

Source: Martin Currie and Morningstar. Bid to bid basis with net income reinvested over the periods shown in sterling terms. These figures do not include the costs of buying and selling shares in an investment trust. If these were included, performance figures would be reduced. Prior to 1 August 2011, the Trust's benchmark was the FTSE All-Share index and the MSCI World High Dividend Yield index thereafter.  Past performance is not a guide to future returns.

Capital structure

Ordinary shares 100,259,771*

*Source: Martin Currie as at 31 December 2011.

Board of directors

Neil Donaldson (chairman)

Andrew Irvine

Charles Berry

Edward Murray

Rachel Beagles

Material events and transactions

Gearing at the end of the period was 9.3% (10.0% as at 30 September 2011).

The second interim dividend for the year to 31 March 2012 of 1.15p per share was paid on 15 December 2011 to shareholders on the register on 25 November 2011.

Website

The trust has its own website at www.securitiestrust.com. There you will find further details about the trust, information on Martin Currie, daily share prices (and associated risks), and you can access regular webcasts by the manager.

Key information

Year end 31 March

Annual general meeting July

Interim dividends paid March, June, September, December

Annual management fee as at 31 March 2011† 0.3%

Total expense ratio 31 March 2011* 0.7%

Epic code STS

Reuters code STS.L

†Percentage of net assets.

*Percentage of shareholders' funds. Includes annual management fee.

Net asset value and dividend history

As at 31 March	Share price	NAV per share	Discount/ (premium)	Dividend per share
2006	125.5p	135.6p	7.4%	2.85p
2007	141.3p	148.4p	4.8%	5.05p
2008	116.0p	121.5p	3.8%	5.45p
2009	66.3p	75.4p	12.2%	5.45p
2010	99.0p	109.4p	9.5%	4.65p
2011	108.0p	117.4p	8.0%	4.65p

 

END

 

 

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